The Queensland Government sees the state’s startup sector as vital to productivity and competition, and has expressed a desire to be more collaborative with industry leaders.
Leeanne Enoch, Minister for Science and Innovation (pictured), was part of Startups in Parliament 2015, a gathering of startup and government leaders at Queensland’s Parliamentary Annexe last Wednesday.
She told the group the state’s productivity and competitiveness were “under immense pressure as our traditional industries contract,” and startups were part of the solution.
“We need to make sure that our young people – the knowledge workers of the future – aspire to be at the forefront of the transformative changes being led by our startup entrepreneurs.”
The state government’s involvement with the sector is currently expected to increase following their announcement of the $40 million Business Development Fund, a separate initiative to DSITI’s current $300,000 Startup Queensland fund.
“Through this co-investment fund, the Queensland Government is taking a leading role investing in our homegrown innovators and startups,” Enoch said. “It will provide critical capital funding to Queensland-based, early-stage ventures in emerging innovation, including niche manufacturing.
Both the event and development fund are especially significant considering that, according to StartupAUS’s recent report Crossroads 2015, “it is widely accepted that the [federal] government has decreased its overall level of support for startups in recent years”.
The report refers to the wider Australian ecosystem and argues that while the government has made progress on several fronts, particularly with changes to Employee Share Schemes, initiatives such as the Industry Innovation and Competitiveness Agenda are instead designed for small businesses and companies in the “priority industry sectors”.
Along with the impact of startups on environmental issues, regional growth and social inequality, representatives spoke on the state of entrepreneurial education in Queensland, and touched on initiatives like Toowoomba’s Startup Weekend Education and Cairns’ new Emerging Entrepreneurs Program.
The general consensus was that we need to introduce startup concepts to students earlier in their education instead of relying on university initiatives, such as IDEA Network. As Toowoomba Startup Group’s Leanne Griffin said, the culture around startup education must change and can “blow down as much as it can blow up”.
Other presenters included DSITI Director-General Sue Rickerby, who spoke on the importance of failure as a part of startup culture; MC and CEO of Creative Enterprise Australia Anna Rooke; members of local startups Tanda, Obzervr and Liquid State; and representatives from Toowoomba, Townsville and Cairns groups.
Shadow Minister John McVeigh was also in attendance, and Enoch applauded a bipartisan approach towards moving away from the “same old, same old” attitude of previous governments.
Case in point, Enoch had met with a group of startup representatives a week earlier, including Rooke, River City Labs’ Steve Baxter and Spike Innovation’s Colin Kinner, concerning an investment action plan the group had spent 18-month developing.
Much like Crossroads, the group’s action plan provided a number of recommendations in regards to investment, education, our visiting entrepreneur program and connectivity between incubators, and Rooke believed it was received well in light of the government’s current job policy Advance Queensland.
“[Enoch] was very open, very willing to listen and very collaborative in terms of taking onboard feedback,” Rooke said. “I mean obviously we understand that government only has a finite set of resources to invest in this area, but she was happy to look at what we worked on in the last 18 months, compare that to the ‘Advance Queensland’ priorities, and then see where there could be some areas of feedback.”
Crossroads also refers to the common concern that government sees startups as indistinguishable from small businesses; the report mentions that dialogue with department representatives has demonstrated a general misunderstanding of the definition of tech startups, what their specific requirements are, and their potential economic impact.
Rooke, who is currently taking applications for Creative3 Pitch, saw the night as an opportunity to “put what a startup really is in the minds of representatives of QLD,” describing scalability, niche vertical, and the ability to grow globally as defining traits.
“Small business can generally take their own time, their own direction, and grow to meet their customer needs,” Rooke said. “A startup has a particular technological opportunity or a particular pathway to market, they have to bring on board investors, that’s not always the case with an SME.”
“And you really kind of need to make sure you maximise that first-mover advantage,” she said. “And SME can be a service based industry; a startup needs to have a really great team, a really great technology, then the ability to demonstrate how you can reach a much larger market than perhaps an SME can service.”
And by all accounts, the government representatives at Startup in Parliament understood the difference. Colin Kinner, a mainstay of the Queensland scene and author of Crossroads 2015, said the distinction was “the number one thing for me with anything to do with the government, and that was talked about enough that I don’t think that message could be lost.”
Likewise, Kinner approved of the Business Development Fund’s focus on startups, and said that while plans for the fund had primarily included pictures of “guys in hi-vis vests and hard hats, I’ll give them benefit of doubt”.
However he also said the night lacked discussion on relative scale and compared Brisbane to peer city Auckland, where the local government recently demonstrated an appreciation for the long-term importance of startups with innovation precinct GridAKL.
The Aukland precinct opened in May, three months after Boundlss’ reported that “Australia needs $13 billion to fight off foreign tech vikings” over the next ten years lest we miss out on the future opportunities of digital disruption.
Kinner also argued that Queensland needs to reduce the fragmentation of its initiatives, and said that “useful things in the ecosystem, like River City Labs, Creative Entreprise Australia, and ilab [are] all sub-scale, they’re all geographically dispersed and they don’t have enough ways in which they can work together.”
Here, he extrapolated to what he believes is an underlying problem within Queensland; a system of “scarcity behaviours”.
“In places like Silicon Valley, where there’s an abundance of talent, capital, really good ideas and mentors, people share willingly,” Kinner said. “The startup culture of paying it forward happens because people know that even when they pay it forward and they don’t get immediately compensated, good things will happen down the track – there’s enough to go around.”
“In Queensland’s startup scene, we still have the condition of scarcity of good ideas, good founders, good technical skills, [and] capital,” he said. “So people engage in what I call scarcity behaviours, they hoard ideas, they hoard opportunities – not all the time, I’m not suggesting that everyone fails to collaborate all the time.
“But there’s a lot more of that sort of behaviour than we would have if we were a bit more mature as an ecosystem.”