One of the main arguments for developing a healthy startup sector in Australia is that without one, the country will lose talented developers, designers, entrepreneurs, jobs and tax receipts to other nations.
It’s not just a theoretical problem. It involves real movements of companies, people, their ideas and their money.
The UK has already lured Australia’s mega-successful startup, with Atlassian moving its headquarters there last year ahead of a potential IPO in which could provide more favourable administration and tax arrangements for the company. Even though the Australian operations remain here, Australia’s star startup moving its HQ overseas was seen by many as a blow for the local digital sector and the ASX which was hoping to position itself as a regional tech hub.
The Sirius Programme of the UK department of Trade and Investment (UKTI) offers budding startup entrepreneurs a UK visa and $20,000 in funding as well as a place in one of the country’s top startup accelerators. They are actively seeking to market the programme in Australia.
In the 2013 round, 40 teams relocated to the UK including two Australians, Jonathon Spanos of innovative woollen sports shoe company ToBe and James Tilbury, co-founder of Carbon Analytics a company which makes measuring and reducing the carbon footprint in business.
“The Sirius Programme made it possible for three cash-strapped graduates to set up a business rather than re-enter the corporate world,” Tilbury said.
“Without the UKTI-endorsed entrepreneur visas it would have been nearly impossible to base the whole team in one city.”
Australian startup sector leaders and entrepreneurs, including Freelancer.com founder Matt Barrie have argued for entrepreneurial visas be introduced here to address skills shortages and strengthen the startup sector. There’s more on that here.
After relocating to London in late 2013, the Carbon Analytics founders completed a 13 week placement with Oxygen Accelerator, before launching a Beta version of the platform and are currently trialling the software, working towards an official launch in 2015.
“The ideal path for us is to finish market testing and raise a round of funding through Angel Investors within the next six months,” Tilbury said.
Early stage startup incubator BlueChilli growth hacker Alan Jones told Business Insider that Britain had various ways of supporting startups, including tax breaks for both investors and startup founders, and protective policies suited to young companies which are developing ideas.
“You’re close to the European market. It makes it a good place to set up without being hassled by US businesses,” he said.
“The biggest thing we fail to understand in Australia is early stage tech startups can contribute to GDP.
“Each of these next Atlassians is a highly portable business. They can relocate overnight.”
He said startups will naturally go wherever conditions are the most welcoming.
“We really have to pull our fingers out if we’re going to become a smarter economy,” Jones said, adding programs like this one and startup support policies from around the world, not just in the UK but in places like Portugal and the US will make it even more difficult to build strong tech startups in Australia.
“It certainly means a worsening shortage for software and hardware engineers in Australia,” he said. “Right now the choice is to take a salary and work for someone else or become an entrepreneur.”
There’s increasing competition to pick up talented entrepreneurs and engineers and put them to work in Australia before they head off overseas, Jones said.
Applications close June 30. There’s more here.