Australian start-ups less ambitious than US counterparts

Tech start-ups in Australia are more risk averse than their American counterparts and find it difficult to grow into successful, global companies. This is according to the latest study by Deloitte and three start-up partners Pollenizer, From Little Things and Startup Genome Project, which compared more than 1000 Australian tech businesses with more than 50,000 global firms.

The study found less than five per cent of Aussie start-ups became sustainable, global businesses and that local entrepreneurs were less ambitious than those in New York and Silicon Valley in California. Local entrepreneurs are 14 per cent more likely to tackle niche, smaller markets than those in Silicon Valley. Moreover, US firms raise nearly five times more capital in their early years than Australian firms, and raise 100 times more capital when preparing to grow in scale.

The study also found the majority of all Australian start-ups are based in Sydney, 55 per cent higher than Melbourne, six times higher than Brisbane and eight times higher than Perth.

When it comes to job creation, Silicon Valley start-ups create nearly three times more jobs than Australian start-ups in their early years. This comes as a Google and Pricewaterhouse Coopers report  indicates tech start-ups could contribute $109 billion to the Australian economy by 2033, equivalent to four per cent of GDP. This would also create 540,000 jobs by 2033.

So how can the government raise the success rate of the start-up sector? The Google and PwC report provides four tips:

  • Attract more entrepreneurs with the right skills
  • Encourage early-stage funding or grants
  • Work more with start-ups
  • Encourage an entrepreneurial culture and overcome the "fear of failure".

You may also be interested in: 3 inspiring start-up models  and how to foster an entreprenurial culture.

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