More support needed to stop Australian start-ups from going overseas, says Assistant Minister for Competition Andrew Leigh

Universities will be called onto do more to help burgeoning start-ups get their product to customers, and stem the flow of Australian start ups from fleeing overseas to grow. Set to address students and start-ups at the Ecosystem Startup Leaders Lunch hosted at the University of Technology of Sydney on Wednesday, Assistant Minister for Productivity Andrew Leigh will canvas ideas from Aussie start ups to help founders build their businesses domestically. Dr Leigh will say that while Australian founders have “never lacked ideas or grit”, settings have made it difficult for “a small company to grow into a large one without moving overseas”. According to a recent report from the ACS, about 11,000 start-ups have left Australia for overseas markets in the past 20 years, citing reasons like a lack of support, low research and development investment, and low uptake of Aussie-made innovations. “From my side, I am listening for where rules slow you down so that they can be simplified. where a modest public investment would unlock large private effort. Where better data would change behaviour, because transparency still works,” he is expected to say. Universities will also be called to do more to help developing businesses get their product to customers so innovations don’t “stop short of the factory floor”. “Universities have stepped up in applied research, but industry needs to meet this effort so that ideas are pulled through to market,” he will say. Dr Leigh said unis needed to not just be “spectators” but “co-founders”. “Yet when it comes to productivity, the key question is not how good the paper is, but who the customer is,” he will say. “The strongest models treat the university as a co-founder with clear intellectual property settings, co located lab and venture teams, and mobility in both directions.” He will also call on larger firms to carry more of the business research and development load. This would also help the “gritty work of moving from prototype to product”. “High R&D intensity economies invest heavily in this stage, usually inside firms and alongside customers. Australia invests less,” he said. “Universities have stepped up in applied research, but industry needs to meet this effort so that ideas are pulled through to market.” His speech comes as business leaders have called for more government investment into R&D, including tax incentives to boost investment from big businesses. Ahead of Jim Chalmer’s economic reform roundtable, the Business Council of Australia called for a standardised 18.5 per cent offset which wasn’t limited to business turnover, plus a removal of the $150m expenditure cap. Alternatively the Australian Academy of Science called for a large companies which exceed $100m in revenue to be hit with a levy if they don’t spend up to 0.5 per cent on R&D.