The high-tech start-up industry in Australia is gaining momentum, however, one of its major risks is the shortage of experienced talent to deliver the work (developers, UX, QAs etc.). Creative ideas and spirit of entrepreneurship are important, but we must ensure there is sufficient talent to deliver the work. Alternatively, salaries will continue rising until they reach a point when start-ups might not be able to employ local talent and will need to rely on outsourcing their core strategic work overseas.

Why is that happening:

  • While the innovation industry is gaining momentum, the number of graduates from STEM programs hasn’t picked up at the same pace.
  • Global technology companies receive benefits to open subsidiaries in Australia and can pay much higher salaries and provide great working environment and benefits.
  • With no incentives to take “risky” jobs in start-ups; graduates are tempted to go and work with the big, stable firms. Yes, a lot has been written about the power of culture…

When I talk to my clients and partners in the start-up industry, most give me a much longer list with further reasons. The bottom line is that if this won’t change, then the continuous growth of the start-up sector in Australia is at risk.

What can be done?

There are many ways that the Australian government can consider in supporting the industry. Startup AUS is doing a great job in advocacy. Last week I attended one of their events, which was an eye opener.

There is one point that I would like to emphasize. Successful and more mature start-up industries have been in similar situation years ago. What their governments then realised is that the “oxygen” of the industry is talent and a scarce of talent is a real problem. Therefore these governments subsidised courses for people who already had a bachelor degree (no matter in which area) to study tech based courses such as coding and QA. This meant that in addition to STEM graduates, the start-up industry suddenly had hundreds of people entering the workforce on a regular basis. Their academic knowledge might have been lower than that of an engineering graduate, but they started from the basic development and QA tasks and within two-three years many of them became very experienced and assets for their companies.

I am a great believer in encouraging the STEM studies at schools and at universities for the future, but we need talent now! If the government subsidises courses like certificate four in business administration or training, I would like to argue that subsidising courses that will allow more people to enter the start-up and innovation sectors would be a much better benefit for the Australian economy.

Just a thought…