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Wyatt Roy says Israel offers lesson in how to encourage start-ups

The Australian November 12

Glenda Korporaal, Senior Journalist

Wyatt Roy

Assistant Minister for Innovation Wyatt Roy. Picture: Russell Shakespeare Source: News Corp Australia

Australia could learn a lot from ­Israel’s experience in encouraging start-ups, the Assistant Minister for Innovation, Wyatt Roy, said yesterday.

He pointed out that Israel had many similarities to Australia as it was a country with an educated workforce and a small population.

But he added that it was crucial to develop a “uniquely Australian” innovation ecosystem rather than try to copy the system in another country.

Mr Roy had led a week-long delegation of almost 50 Australians to Israel, which has a long-standing culture of encouraging start-ups. “We need to play to our natural strengths,” Mr Roy told the The Australian in an interview yesterday. “But there is a lot we can learn from Israel’s experience over the past 20 years.

“Israel has more venture capitalists per capita investing in innovation than any other country.

“It has more entrepreneurs and more start-ups on a per capita basis. But we need to ­develop a uniquely Australian eco-innovation system.”

Mr Roy’s visit came at a time when the federal government is preparing a major statement to encourage innovation in Australia, scheduled to be released early next month.

Mr Roy said Israel was ahead of Australia when it came to the commercialisation of research.

“There is a lot around that we can do when it comes to collaboration around science, research and innovation,” he said.

He added that Israeli institutions, such as the Weizmann Institute of Science and the Hebrew University of Jerusalem, had very strong collaboration between their researchers and the private sector, which helped in the commercialisation of research.

“There is very effective collaboration in the framework but also in the people to people relationships,” he said.

“The scientists and researchers had a very strong relationship with the entrepreneurs of Israel around commercialisation.”

Mr Roy said he did not think the federal government should copy the Israeli model of having a chief scientist in government who oversaw a government-backed investment fund that put money into start-ups.

But he said the idea of the ­government partnering with the private sector to help encourage start-ups could be “a very effective model”.

Mr Roy said there was strong merit in the Israeli government’s view of its role as an “enabler of ­innovation”.

“It sees its role empowering ­innovation, not acting with a heavy hand, and not overregulating. This is a very successful model for government involvement in innovation.”

Mr Roy said it was clear from the visit to Israel that tax policy was important in encouraging ­innovation.

“We are living in a globally competitive market place,” he said.

“It is important that our tax system is globally competitive to attract entrepreneurs to our shores to do business.”

Mr Roy said Israel’s policy on encouraging “angel” (or early-stage) investing was something Australia could learn from.

He said Australians and Israelis both shared a culture that had a deep seated “anti-authoritarianism, which is not something you find in many countries around the globe”.

“When you are not afraid to challenge authority, it drives a more entrepreneurial mindset, a more aspirational and egalitarian mindset.”

Mr Roy said Australians must learn to “celebrate our success” as part of encouraging a more entrepreneurial culture.

“We should not allow us to fall into the tall poppy syndrome which can drag us down,” he said.

“We need all elements of our society to celebrate our successful entrepreneurs, which will help drive cultural change in our society.”

Mr Roy was speaking ahead of the release today of a report on the outcome of the “policy hackathon” he hosted in Sydney at the offices of start-up accelerator BlueChilli last month.

The document is expected to recommend that start-up accelerators should be considered as “eligible research organisations” for the purposes of assistance from the Australian Research Council.

It will also recommend that the New Enterprise Incentive Scheme should be extended to help entrepreneurs who are working in accelerators; that.there is a tailored tax regime for revenues from intellectual property developed in Australia; and that the federal government look at Britain’s tax regime for encouraging investments in early-stage ventures.

The latter would include an immediate tax deduction for 50 per cent of investment in early stage ventures, full exemption on capital gains tax for investments held for more than three years and a capital gains discount for gains, which were reinvested in start-ups.

It will also recommend that the government do more to encourage more women entrepreneurs, including a $100 million fund to partner with venture capitalist money to invest in female-founded businesses.

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