A new report by PricewaterhouseCoopers (PWC), a professional-services firm, suggests that Australia could start a lot more businesses like Shoes of Prey. It predicts that online and high-tech start-ups could account for 4% of GDP and 540,000 jobs by 2033, up from 0.1% of GDP and 9,500 jobs today. The report is a reminder that Australia’s long boom selling minerals to China will not last for ever. It offers signposts as to how the country might shift from mining coal to mining data.
Australia has about 1,500 tech start-ups, mostly in Sydney and Melbourne. About three-quarters are involved in media or telecoms, a small part of the economy. Yet vast untapped opportunities await in health care, an industry that will surge as the nation ages. And although there are only 23m Australians, communications technologies (such as Wi-Fi, which was partly invented in Australia) allow local firms to reach a global market.
Australia’s regulatory environment for entrepreneurs is friendly, and the country is admirably open to skilled immigration. But PwC frets that “fear of failure” is more common in Australia than in America or Canada, and this could be holding it back.
Some Australian entrepreneurs think the sky is bluer in California. Anthony Goldbloom founded Kaggle, a firm that matches data scientists with companies, in Melbourne in 2010. He moved it to Silicon Valley the next year. Mr Goldbloom felt “a vague sense of guilt” about staying in Australia when the odds were stacked against building a big tech business there. Other Australian start-ups want the best of both worlds. 99designs, a marketplace for designers that was also founded in Melbourne, opened a San Francisco office in 2010 to be closer to customers, marketing talent and venture capital. However, it keeps its developers in Melbourne, where they are less likely to be poached.
