Startups face skills and tax hurdles
While Australia’s technology companies are on target to contribute a larger proportion of GDP in 2020, tech startups could face a growing skills gap and tax hurdles.
Joshua Tanchel, leader of Deloitte’s Technology Fast 50 Program and private partner, said Australia cannot afford to become complacent about its support of the sector.
“In 2016, Deloitte forecast that the technology sector will contribute an additional 2 per cent to Australia’s GDP by 2020 (from 5 per cent in 2014 to 7 per cent by 2020, or $79 billion to $139 billion), and we appear to be on target to meet this goal,” he said.
“However, there are looming issues around skills and tax incentives that will prove a challenge for some startups in the coming year.”
According to a Deloitte report for the Australian Computer Society, demand for ICT workers is forecast to increase to around 695,000 ICT workers by 2020.
Tanchel said that talent is particularly critical to the early stages of development within a startup business.
And while ICT workers on visas only represent 2 per cent of the total ICT employment market, changes to 457 visas may impact the resources typically used for trials, testing and product development.
Another issue for startups to monitor in the coming year will be the review of the R&D tax incentive, which is expected to occur in the next 12 months.
Tanchel said the Australian technology startup market has come of age in the past two years, with more Australians creating global businesses.
“While Atlassian is now well known, other companies such as Siteminder, Bigcommerce, Deputy and Plutora represent the new wave of local technology companies operating at a global level,” he said.
Tanchel said the success of the National Innovation and Science Agenda as well as a range of independent programs, such as Deloitte’s own Tech Fast 50 program, have contributed to this growth.
Atlassian, Prospa, Vocus Communications, Vinomofo, Siteminder and NextDC have all been named to the Tech Fast 50 in the past, while Cashrewards, the fastest growing online shopping community in Australia, took out first place last year.
The Fast 50 program ranks companies in any tech-related industry based on their percentage revenue growth over three years. It provides ongoing support, opportunities to connect with potential investors and helps put them on the map – both domestically and globally.
To qualify, companies must accumulate more than $8 million in revenue over a three year period.