- Thomas Thurston
The Low-Down on Down Under: Australia
Why Australia? I’ve had this question a lot since my decision to relocate to Brisbane. Apart from sunshine, koalas and barbecue, what’s the draw?
I’d be lying if I said sunshine, koalas and barbecue didn’t influence the decision, but in my first visit to Oz last Fall I found myself surprised by what could be described as an unexpected boom in the Australian innovation zeitgeist. Something’s definitely happening… it’s big… it’s new… it’s in the air… and until stumbling into it I had no idea it existed.
Australia is one of those places with a relatively big economy that’s enjoyed by a relatively small number of people. It’s the 12th largest economy in the world by nominal GDP, but only has around 23 million people (fewer people than Texas, Nepal, Venezuela, Peru or North Korea). As a result, Oz enjoys a GDP per capita of around $59K whereas the US sits at $54K. People there, on average, have a bit more money than Americans and their healthcare system is 5 spots ahead of the US in the WHO Healthcare Rankings. Not too shabby.
However a huge part of Australia’s GDP has historically come from mining, agriculture and the service sector (services alone are 68% of GDP, consisting of things like energy, construction and finance). That probably isn’t a surprise, but these services, mining and agriculture sectors aren’t what they used to be. Growth has been harder to come by. This poses a challenge for the country as it struggles to stay ahead in an increasingly competitive world.
Innovation-wise, Australia has been one-upped by neighbors Korea, Hong Kong and Singapore. Its venture capital market has been tiny. It could be an easier place to start a business (bureaucracy-wise) and its big companies have been seen as a little too domestic and sleepy. It was even beaten in the Global Innovation Index by New Zealand. That’s right, they got smashed by the Kiwis! Ouch! Australia needs new engines of economic growth.
Then, last year, things changed in a big way when Australia elected Prime Minister Malcolm Turnbull; a former investment banker and startup investor who got rich betting on an internet company in the 1990s. Whether or not you like his politics, he’s definitely thrown his sword in the sand when it comes to innovation. Under his leadership Australia has announced more than $1.1 billion to promote innovation, including a $200 million innovation fund that will co-invest in startups and businesses to help Australia’s research organizations and universities to commercialize innovations.
Australia is now investing boat-loads to train software coders through its schools. It’s created new tax incentives for venture capitalists and angel investors. There are lots of other perks such as a fat R&D tax credit for in-country innovation and a special visa just to attract “innovation” talent.
And… things are changing at a furious pace. A couple of years ago there was only a thimble-full group of startup incubators/accelerators in Australia. Now there are dozens. Almost every level of government (from federal to local) has innovation initiatives. Many incubators/accelerators have been funded by large Australian banks, leading to hundreds of FinTech startups seemingly overnight. Australia Post (like America’s UPS) is launching an incubator/accelerator program and one can’t help but notice the uptake in delivery and transportation startups. Everywhere you look there’s another startup popping up. I’ve had Uber drivers pitch me their startups en-route, which used to only happen in the Bay. New investors and funds are percolating everywhere. Again… something electric is in the air and it’s impossible not to notice.
I wasn’t part of Silicon Valley’s 80’s and 90’s when it became the innovation capital of the world. It must have been surreal, scary and exhilarating all at once. I’m not saying Australia will become the next Silicon Valley, but it’s amazing to witness Oz’s 200 kilometer-per-hour pivot (yes, I just used the metric system) from old-school suit and tie, to new-school hoodie, beard and man-bun (not really a fan of the man-bun though). It’s the chance of a lifetime to be “there” as Australia paddles into a new, historic wave of innovation.
…now back to the sunshine and barbecue…