Ready? Set? Innovate: four things every entrepreneur needs to know about the ideas boom

It shouldn’t surprise you to know that everyone’s favourite innovator Elon Musk, who founded Tesla and SpaceX, has a few things to say about innovation, including this gem: “if you’re not failing, you’re not innovating enough.”

A timely reminder, since the government has released a package of major initiatives as part of the National Innovation and Science Agenda in December (aka ‘The Ideas Boom’) designed to boost innovation in Australia.

And the major winners? Startup businesses and their investors.

Promoting Australia's brightest ideas

The Government seeks to promote Australia’s brightest ideas.

In a nutshell, many of these incentives are directed at getting money into the hands of startups.

Of the 24 initiatives – which are collectively worth a cool $1.1 billion over four years – most signal a general push towards innovation, and encouraging startups to take risks.

According to Dr. Amantha Imber an innovation psychologist, best-selling author, and founder of innovation consultancy, Inventium, it couldn’t come soon enough.

Her client list includes Google, Coca-Cola and Disney, and her latest book is The Innovation Formula: The 14 Science-Based Keys for Creating a Culture Where innovation Thrives. 

Dr Imber argues that the ideas boom puts us firmly on the right path. She stresses that innovation is crucial, both for individual Australian businesses as well as for Australia’s overall future success.

For startups, here are the key takeaways from the Ideas Boom initiative:


1. We’re loving angel investors

One of the largest innovation investments announced as part of the initiative will go to early-stage startup investors.

Specifically a promised $106 million in tax incentives for angel investors who provide seed funding in a startup’s early years.

“These are certainly some really good incentives to invest in startups in terms of good tax cuts offered,” says Imber, “and given that one of the biggest challenges for startups is raising capital, it helps to make that easier.”


2. We’re attracting the best and brightest

One challenge startups face constantly is how to find great talent.

To help out, the government is trying to make policies such as employee share schemes more user-friendly.

By making it simpler for entrepreneurs to offer employees stock, this move is intended to help local startups attract the best talent.

And since we’re in direct competition with major startup hubs in the US, Canada and Europe, there will also be a new visa which will be introduced in November 2016 for entrepreneurs with innovative ideas and financial backing.


3. We’re clearing the road to startup equity crowdfunding

“There’s a lot in there for startups,” Imber says. “Different avenues have opened up for them to get investment.”

Startups previously had difficulty accessing seed capital through crowdfunding.

Now, new laws remove those barriers, enabling crowdsourced equity funding of small public companies.

“It makes it easier for startups to crowdsource equity, which in the past has been a little bit challenging,” says Imber.

The catch? According to Jason Zein, associate professor UNSW, startups will still be forced to become public companies.

At this stage it’s unclear whether the benefits of crowdsourced equity will outweigh shouldering costs of compliance with shareholders.


4. We’re embracing risky business

We know it doesn’t sound sexy, but insolvency laws will be changed in 2017 to encourage calculated risk-taking.

If you’re in a startup, this is a positive.

“What the government is trying to do is encourage businesses to be more open to risk-taking and not expect startups to get it right the first time.”

Compared to the business ecosystem in America where risk-taking and failure are par for the course, “Australian businesses tend to be risk-averse,” says Imber.

The current default bankruptcy period will also be reduced from three years to one, which will allow entrepreneurs to re-enter the business arena more quickly post-bankruptcy.

Take it from the mouth of the Prime Minister himself at the launch of the National Innovation and Science Agenda: “we’ve got to be prepared to have a go and be more prepared to embrace risk and experimentation… that is our future.”