Innovation report canvasses problems with visa system, but doubts raised over chances of government “actually doing something about it”

A government-backed innovation report has been praised for its recommendations by Australia’s primary startup advocacy group, but concerns have also been raised around the federal government’s propensity to “actually do something about it”.

The report, titled Australia 2030: Prosperity through innovation was released on Tuesday by Innovation and Science Australia (ISA), with support from newly appointed Innovation and Jobs minister Michaelia Cash. It unravels 30 different recommendations across areas such as education, regulation, and immigration to help form Australia as an innovation leader by 2030.

In the report’s foreword, ISA chair Bill Ferris emphasised how innovation will be a key factor in the expansion and growth of Australia’s economy.

“Australia will need to be competitive in a global innovation race by scaling up more high-growth industries and companies; commercialising more high-value products and services; fostering great talent; and daring to tackle global challenges,” he said.

“Yet just at the time when Australia needs to accelerate its innovation performance, we are falling behind our global peers, particularly in student performance in science and mathematics, and in business investment in research and development.

“This is more than a canary chirp in our economic mineshaft: it is a clarion call for national action.”

The detailed 125-page report lays out ISA’s thoughts on where innovation could use some work, discussing the need to strengthen vocational training, encourage a more flexible regulatory environment, and provide incentives for collaboration and commercialisation of businesses.

And while many areas of the report are relevant to the inherently innovative slice of Australia’s economy that is our startup ecosystem, the report also touches on concerns around Australia’s migration visa and skills issues, a constant thorn in the side of startups since the first changes were announced at the start of last year.

“Visa access is the single biggest factor holding back startups in Australia now that access to capital restraints have been lifted,” StartupAus chief Alex McCauley tells StartupSmart.

“Access to skill is one of the main factors affecting us. This is not a criticism of Australia or our workforce as there’s a global shortage of talent and it’s something every country is trying to overcome.

“But if we make sure our startups have the right visa arrangements in place we can give them a better chance.”

Entrepreneurs visa one of the “worst in the world”

McCauley’s view is not an uncommon one, with founders, investors, and visa holders themselves speaking to StartupSmart over the past year about the critical nature of Australia’s visa issues.

Most recently, Airtree Ventures founder Daniel Petre relayed a suggestion from Bill Gates on how Australia could work towards solving its tech skills shortage, saying the government should be offering top local university graduates Australian citizenship. At the same time, Labor MP and long-time advocate for the startup sector Ed Husic said local companies are being “suffocated” by visa issues.

The government has also attempted to entice more entrepreneurs into the country through reforms of the Entrepreneur Visa at the end of 2016, lauded at the time as a way to attract the “best and brightest entrepreneurial talent” to the country. However, in November 2017,  StartupSmart revealed the visa scheme received just one applicant in the 12 months following its launch.

ISA’s report also reveals that fewer than five Entrepreneurs Visas were awarded during 2012-2016, prior to the scheme’s revamp.

“Our Entrepreneur Visa is one of the worst entrepreneurs visas in the world, I’m not surprised we’ve only had one applicant,” McCauley says.

The report also highlights the extremely long processing times for startups looking to hire through visas such as 457, using the comparison of the UK’s similar visa scheme, which takes 16 weeks to process and costs just £300 ($528).

“The Australian startup community has observed that the Australian entrepreneur visa requires improvement to address processing times (which can be over a year), application expense (which can be over $3000), and restrictions on eligibility requirements relative to other countries,” ISA says.

A totally new “flexible” visa class

The report refers to the ISA’s submission to the government’s consultation on its visa reforms, which included the key recommendation that the government engage in more international promotion of Australia’s Entrepreneur Visa and general innovation landscape.

A more promotion-heavy approach is “totally critical”, says McCauley, who slammed Austalia’s immigration department as seeing its job as “only to kick people out”.

“If we want to be effective in getting the right people to Australia, we need a coordinated effort from government to help us scour the world for fantastic talent. This would put us on a level pegging with other countries like the UK,” he says.

McCauley also believes the government should look at a totally new class of visa directly targeted at the digital space, calling for this in addition to a full reform of what was the 457 visa.

“Startups move really fast, constantly creating new roles on the edge of tech, and demand for these roles is often going to outpace bureaucracy and politics,” he says.

“The government should look at making a new and flexible type of visa for digital skills, with mechanics to allow new types of roles to be added efficiently.”

Responding to the report, Minister Cash said in a statement the government will “carefully consider” the recommendations laid out in the report.

“Innovation is creating the jobs of tomorrow. Every Australian can benefit from and be innovative regardless of age or job, and for us to become a top tier innovation nation we need everyone to be involved,” Cash said.

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