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IPA Blog: Investing in aspiring entrepreneurs and boosting commercialisation rates would drive Australia’s economic growth

I believe that most countries would face the same dilemma between the pressure to grow and the pressure to reform, and how to harness the power of entrepreneurship to help us grow through reform.

by | 21 Aug, 2024

An entrepreneur looks at a tablet

Vicki Stylianou is the Institute of Public Accountants’ Group Executive, Advocacy & Professional Standards. This is an extract of her speech at the Bundesrat (Upper House) in Berlin, Germany in July.

To add to this complexity, many countries, including Germany and my own country of Australia, have federal systems where the federal government and the state governments are not always aligned in their policy and legislative priorities and objectives. In my view, in Australia there is rarely alignment among the states themselves and among the states, territories and federal government. 

So, how do we grow and reform whilst ensuring that we do not leave behind entrepreneurs and small business owners and operators? 

In Australia there is too often a focus on growth through big business because our economy is very dependent on exporting various mineral and agricultural commodities. These traditionally do not favour small business as these exports rely on scale and significant investment. 

Entrepreneurship a vital source of growth 

However, as Australia strives for economic progress and prosperity, the traditional sources of growth, such as mining and agriculture, are facing limitations. This puts pressure on us to explore new avenues for economic expansion. Entrepreneurship plays a vital role in this context. By encouraging and supporting entrepreneurs, we can unleash their creativity and drive, leading to the creation of new industries, job opportunities, and economic growth.

The federal and state governments have identified industry sectors such as advanced manufacturing, medtech, agritech and higher education, as major sectors for investment and government support.

But in our pursuit of growth, there is much which needs to be reformed. The Australian federal system, with its division of powers between the federal and state governments, can sometimes lead to duplication, inefficiencies, and policy gridlock. To overcome these challenges, we must promote reforms that encourage collaboration, streamline processes, remove unnecessary barriers and promote consistency, across different levels of government. This will create a more conducive environment for entrepreneurs to thrive and contribute to the growth of our nation.

We know all of this can be achieved because during the COVID-19 pandemic, the federal and state and territory governments established the National Cabinet to essentially run the country during the pandemic. I would say that most citizens were amazed at the level of cooperation and coordination that was achieved and we hoped that it could continue after the pandemic. But it was not to be.

How can we promote entrepreneurship within the Australian federal system to ensure its meaningful contribution to growth and reform? We have a long way to go. It is sobering that in the IMD Competitiveness Yearbook for 2024, Australia ranked 61 out of 67 countries for levels of entrepreneurship. Germany ranked 39. So we can learn from Germany and other countries. On the other hand, Australia ranked 6 for start up procedures, whilst Germany ranked 58. There is mutual benefit in learning from each other. 

Boost commercialisation rates & invest in aspiring entrepreneurs to reverse declines

Australia must improve its commercialisation rates so that the economic benefit of innovations is realised. We need to get much better at fostering a culture of innovation and risk-taking, which can be achieved through education and awareness programs that instill an entrepreneurial mindset from an early age. We need to encourage young Australians to embrace creativity, problem-solving, and independent thinking.

Secondly, we must provide adequate support and resources to aspiring entrepreneurs. This includes access to funding, mentorship programs and business incubators. The federal government can play a crucial role in facilitating these initiatives, working in collaboration with state governments and private sector organizations.

Government also has a role to play in prioritising the removal of unnecessary regulatory burdens and red tape. By adopting a more agile and responsive regulatory framework, we can encourage businesses to take calculated risks and adapt to changing market conditions.

Lastly, collaboration and knowledge sharing are key. The Australian federal and state governments need to improve in actively engaging with entrepreneurs, industry experts, and academia to understand their needs and challenges. By fostering open dialogue and collaboration, we can develop policies and initiatives that are tailored to the unique requirements of the entrepreneurial community.

We know what must be done. The challenge is to effectively implement what must be done. Here, we can learn from others, including Germany.

The pressure to grow and the pressure to reform are two sides of the same coin in the Australian federal system. By promoting entrepreneurship, we can address both challenges simultaneously. Through fostering a culture of innovation, providing support and resources, removing unnecessary barriers, and promoting collaboration, we can create an environment where entrepreneurs can flourish and drive economic growth.

Let us work together to unlock the potential of entrepreneurship for the benefit of growth and reform in all of our countries.

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