This week, the StartupAUS Crossroads report underlined the pressing need to fix our start-up eco-system, or risk losing out on the huge opportunity presented by high growth technology companies such as Atlassian, Freelancer and 99designs.
We know Australia’s economy is far too reliant on our all-too-finite resources and tourism industries. These are plagued by fluctuating commodity prices and currencies, and weather -- factors that we have little positive control over. High-growth tech start-ups could account for $US109 billion and 540,000 new jobs by 2033. To say it is a huge opportunity is an understatement.
So what’s holding Australia back?
While the Crossroads report outlines a whole heap of areas, there is one area which for me is vital. And it’s all too simple: We just don’t have enough young people willing to dream big, give it a go and start up their own venture.
In Australia, a large share of our first-time entrepreneurs (in the high-tech global growth potential area otherwise known as 'tech start-ups') are in their 30s and 40s. In fact, far too few young Australian’s start their own venture. In the US and Israel -- two leading countries when it comes to high-growth tech firms -- a large proportion of entrepreneurs launch their business directly following their undergraduate degree. At Caltech, Stanford and Berkeley, it is estimated that 20 per cent of all graduates form a start-up before they even graduate.
Yet here in Australia (see table below) our leading universities are spawning just a handful of start-up founders compared to other nations.
A main part of the problem is that the Australian education system is geared towards preparing students for the workforce, not towards equipping them with the skills, knowledge and encouragement to start their own business. We need to imbue them with wanderlust for a life of beating their own path and leading the world from our great nation.
The first step to reverse this actually starts younger than you might think. It is essential that we encourage kids, parents and teachers to view business creation as a valid career path rather than the current expectation that kids will get a good education in order to get a good job.
Australia is held back by the limited exposure the general public has to entrepreneurship, combined with a culture that does not celebrate or promote an entrepreneurial mindset.
Entrepreneurship is seen as an unusual career path, and even when children are exposed to the notion of starting their own company they are generally guided toward small business creation, and not towards the idea of creating the next Google, Facebook or Apple.
Currently there are no widely implemented entrepreneurship programs in Australian high schools -- this needs to change. The creation of an entrepreneurship elective in high schools would put Australia on par with the education systems in much of Europe, the US and Singapore where entrepreneurship is increasingly seen as an essential component of the secondary curriculum. In the US it has been found that up to 20 per cent of students who participate in an entrepreneurship training program in secondary school will later start their own company -- a rate about five times that of the general population.
In addition to opening the minds of our younger generations, and opening up our wallets to support them, we also need to focus on providing students with the core technical skills they need to build technology. Australia is currently facing a significant skills shortage in the ICT sector, with demand for ICT workers having doubled over the period 1999 to 2012, whilst applications for tertiary ICT courses have dropped by approximately 60.
A number of promising initiatives are underway in Australia to try to boost participation of students in ICT education, but these are at a small scale and with little co-ordination. If we are going to actually make an impact, we need to make some serious changes:
- The government needs formally adopt and extend the updated Digital Technologies Curriculum to make computer science and computational thinking a mandatory component running to year 10, and an elective subject in years 11 and 12.This would help bring Australia up to speed with countries like New Zealand, the Netherlands and Vietnam.
- We need a campaign to drive awareness of the value of computer science. Particular effort should go to engaging girls in high school, as girls currently comprise only 12 per cent of university computer science students.
If Australia is going to avoid missing out on the global tech revolution and really build a diverse and strong economy, we need to do something now to give our kids the push they need to start their own business.
As I found out myself when I launched my first tech start-up in 1994 (almost 24 years old), when you’re young you are far more willing to take the risks you need to succeed. We need to equip our own young people with the drive and desire and technical skills to be the next Bill Gates or Mark Zuckerberg.
We’ve got to dream big, or go home.
Stephen Baxter is a StartupAUS board member and managing director of River City Labs.