United States
In a recent report by PWC it was revealed that technology based start-ups are predicted to be worth over $US109 billion and have the potential to create 540,000 jobs by 2033. In light of this, and with Australia’s agenda for innovation backed by the Turnbull government, policy recommendations have been affluent.
Several companies and investors have pitched the idea of adopting the UK Scheme for tax breaks and R&D credits. For example, STARTUPAUS has recommended doubling R&D tax concessions and adopting the UK’s successful Seed Enterprise Investment Scheme (SEIS), by generating income and capital gains tax incentives for early stage start-up investments to support their growth and overall economic influence.
On the other hand, Dr Graeme Wald, Biosciences Managers’ investment director, noted that further incentives are required for R&D. In Dr Wald’s opinion, Australia should consider emulating Britain’s tax breaks on revenues earned from patents. Indeed, incentives would assist in improving the angel investing landscape in Australia.
By observing the success of the UK market, one can see the effect the government can have on driving the start-up ecosystem by creating local jobs and a culture that embraces an agile, innovative economy. For instance, the UK government has increased R&D tax credits to 225 percent, which is comparable to Australia’s 150 percent for companies earning less than $20m. As a result from boosting the R&D tax credits, the UK’s R&D expenditure has increased by 40 percent.
It can be seen from the above breakdown that Australia’s economy is at a vital juncture. A new prime minister coupled with a contemporary innovation agenda, means we have the potential to build an innovative economy that is proficient at taking advantage of the vast opportunities technology is generating. Whether it is taking notes from the UK, or creating our own set of policies, the future for our economy is looking bright as it takes strides towards an innovation focus.
