Government goes for startup lever to boost economic ‘dynamism’
The federal government has announced it will be offering loans to tertiary students via the HECS help system, as part of a “new chapter” to give the startup community more confidence to stimulate the national economy
University students who have a startup idea that they want to incubate or commercialise may be eligible for one of 2,000 interest-free loans worth approximately $11,000, as part of a proposed Startup Year initiative.
Under the scheme, budding entrepreneurs can choose to continue at a participating tertiary institution for another 12 months beyond their degree, to work with accelerators and incubators and finesse their startup.
“We want to send a signal that entrepreneurship for the country is really important,” Ed Husic told an audience in Sydney to launch a consultation paper for the proposed program.
“We’ve had Treasury at a federal level already say that the amount of business dynamism that exists in the economy is not strong enough — we need to do more to rev that up. And this is part of what we’re trying to do,” he said.
The industry and science minister made his remarks at an address at the University of Technology (UTS) last week. The government hopes the loan scheme will help more entrepreneurs commercialise their ideas and is being delivered as an election commitment.
The university alone hosts about 500 active student startups, with 60% of all students reporting they want to engage in entrepreneurship and startups.
“I think there have been close to 450 paid jobs created [at UTS] through the last year, which is huge. And this is part of the reason why we’re reinvigorating the focus on this initiative or this space,” Husic said.
“Universities Australia says there are about a hundred of these types of initiatives across the country. How do we work with them, encourage university students to stay on one extra year, get [sic] these startup firms that sustainable advice so that they can get a longer pathway to success or basically that they’ll be on a longer pathway to success? And what can we do to play a part to encourage people to get involved in that?,” he said.
The minister used the example of one of Australia’s few unicorn companies, Canva — which now caters to about 75 million people in over 190 countries — to illustrate the untapped potential of startup ventures. Other companies such as Seer Data and the augmented reality firm Indigital were extra case studies for lifting job opportunities in the tech-related sector. This had flow-on benefits for the wider industry, he added.
“We want ideas that could be local that uplift local communities but also have global reach as well,” Husic said.
“There’s an opportunity for us, and we’ve committed as a new government, to seeing 1.2 million tech-related jobs in this country by 2030. We want to send a signal that is an important target to reach for.”
Quantum technology and robotics will be two industries the government is focusing on to build a homegrown tech workforce, with hopes this will deliver the capability needed to drive initiatives supported by the National Reconstruction Fund.
Husic said the suite of policy and government investment measures would stop Australia’s brain drain and prevent lost opportunities when local innovations were incentivised to go abroad to be nurtured.
“The National Reconstruction Fund [invests] $15 billion targeting six key areas that will deliver future economic growth, and within that a $1 billion critical technologies fund that will look to see the development and emergence of new technologies in Australia and also create new opportunities for the country,” Husic said.
“We want to send the signal that what [startups] do is really important to our longer-term success.”
The minister also acknowledged the work of UTS director of entrepreneurship Murray Hurps at the event as a “pillar for Australia’s startup community”.
“We need people like yourself and the others that are in the community to maintain the focus on the vital reason why we need to do this,” he said.
“Not just from an economic perspective but also from the point of view about what it does for national wellbeing as well.”
The Department of Education’s public consultation on the Startup Year program will close on 15 November.
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