Earlier this year, the Startup Genome has released its annual Global Startup Ecosystem Report, it has listed Sydney as the 17th best startup ecosystem in the world, ahead of Chicago, Amsterdam, and Bangalore. Melbourne was described as “itching to crack the top 20 overall” and have the indicators to cut it in the top 20 soon. Albeit the percentage of immigrant founders in Sydney and Melbourne is higher than the global average, it still lags behind Silicon Valley and most of the other top 10 cities.
In a study by Duke University, UC Berkeley, and Harvard found that 52% of Silicon Valley startups founded between 1995 to 2005 were launched by immigrants. A quarter of patents around the same period were filed by immigrants. In addition, the US National Venture Capital Association (NVCA) published a research that showed that 40% of the US’s publicly traded venture backed businesses in high tech were started by foreign-born entrepreneurs. The numbers do not lie, the fact that immigrants only make up 13% of the US population makes immigrants great entrepreneurs, and Australia needs that.
Immigrants have unusual level of guts and an appetite for grind. This gutless, go-for-broke and leaving the comfort zone attitude of immigrants is the “major key”, as DJ Khaled says, for their success in the United States.
Immigrants entrepreneurial success is likely a result of being capable of seeing things from an outside perspective.
With the slowdown of the manufacturing and mining industries, if Australia wants to stay at the forefront of innovation and economic growth, then Australia needs to give migrants a better space and the opportunity to innovate.
Australia has almost double the percentage of immigrants of the United States at 26%. Australia is a global leader in skilled migration with 67% of last year’s 190,000 migration applications filed in the skilled migration scheme. Around 7200 migration visas were filed in business innovation and investment streams, but almost all of these visas are related to investment and general ownership, as opposed to innovation and entrepreneurship. Australia was the first country to offer a permanent business talent visa (subclass 132), but it is huge investment threshold of 1 million dollars, the highest of all countries offering similar visas, and the long processing times ensured its failure.
Although a new relaxed entrepreneur visa (subclass 188) was introduced last September, founders still need to secure at least A$200,000 in third party funding for their ideas to be eligible to apply. Most applications of the new entrepreneur visa are processed within 14 months, and in the business world, where speed of execution and reaching the market asap matter, 14 months is still way too long.
Moving to a new country after establishing a business idea does not a make much sense unless businesses are trying to penetrate and scale into a bigger market. Therefore, instead of trying to attract foreign entrepreneurs through the lure of visa, Australia could better position its role by allowing existing immigrants to scale up their ideas and foster their innovation through accelerators and incubators. In addition, there are hundreds of thousands of international students, and thousands of temporary graduates in Australia, they have great potential if they are allowed to explore new ideas and opportunities.
It requires several integral factors to build a thriving innovation environment in Australia, and immigration can help complement a wide range of other measures. The risk-taking and appetite-for-disruption qualities of immigrants are some of the ingredients for successful innovation.
Original article posted on Linkedin ..
