In­no­va­tor in chief

LaunchVic boss wants a sec­tor with punch

The Australian - The Deal - - News - Story by: RE­BECCA UR­BAN

FROM where Pradeep Philip is sit­ting – most likely in a cafe th­ese days, hap­pily lib­er­ated from the suit and tie he wore for much of his 20-plus years work­ing as a se­nior bu­reau­crat – the so-called “ideas boom” is very real. And it’s well un­der way.

Ac­cord­ing to the chief ex­ec­u­tive of LaunchVic, the Vic­to­rian govern­ment’s $60 mil­lion gam­bit to boost en­tre­pre­neur­ial and start-up ac­tiv­ity in the state, the div­i­dends from past driv­ers of eco­nomic growth, such as heavy man­u­fac­tur­ing, are fast run­ning out, leav­ing pol­i­cy­mak­ers glob­ally scram­bling for ideas to stim­u­late new growth.

Any­one in doubt, he says, need look no fur­ther than a re­port re­leased last year by the Of­fice of the Chief Econ­o­mist, which re­vealed com­pa­nies that had been in ex­is­tence for less than two years had been re­spon­si­ble for the lion’s share of jobs cre­ation be­tween 2006 and 2011. Those start-ups cre­ated the equiv­a­lent of 1.44 mil­lion full-time jobs, while older firms shed 400,000 jobs.

“The seeds for the de­struc­tion of the old and the cre­ation of the new are [grow­ing],” Philip says. “The ques­tion is how do you get the econ­omy on to a new growth path? Well, the en­tre­pre­neur is the means by which we will find the new plat­forms for growth in the fu­ture. It’s not some side is­sue, not some­thing that’s ‘nice to have’. This is it.”

Philip’s de­ci­sion last year to leave his high­pro­file job run­ning Vic­to­ria’s Depart­ment of Health and Hu­man Ser­vices, where he over­saw an an­nual bud­get of $20 bil­lion and 13,000 staff, to set up the state’s new in­no­va­tion hub did not go un­no­ticed in political cir­cles.

But the highly re­garded bu­reau­crat, who is also a for­mer Com­mon­wealth Trea­sury of­fi­cial and pol­icy ad­viser to for­mer La­bor leader Si­mon Crean and prime min­is­ter Kevin Rudd, says he took lit­tle con­vinc­ing when he was of­fered the job deal­ing with the “No 1 eco­nomic is­sue around”.

Asked what LaunchVic ac­tu­ally is, Philip starts by point­ing out what it isn’t. It is not a ven­ture fund, he stresses, and it won’t be tak­ing equity po­si­tions in any start-up com­pa­nies. Un­usu­ally it has been set up as a pri­vate com­pany, rather than a govern­ment agency. Ac­cord­ing to LaunchVic’s own web­site, its role

will be to im­prove the “sys­tem-wide per­for­mance of Vic­to­ria’s start-up ecosys­tem” to in­crease scale and im­prove ca­pa­bil­ity.

While it might sound like a prime piece of jar­gon, the term “ecosys­tem” sim­ply refers to the unique en­vi­ron­ment in which many bud­ding en­trepreneurs find them­selves op­er­at­ing, Philip ex­plains. And for a start-up, that of­ten means work­ing out of their homes or garages, and con­duct­ing busi­ness meet­ings in cafes around the city.

“So how are th­ese peo­ple given the chance to have a go?’’ he asks. “By chance, they may have dis­cov­ered a busi­ness ac­cel­er­a­tor or a cowork­ing space and through that they’re get­ting sup­ported, get­ting en­cour­aged, get­ting the re­fer­rals that can help them out. There are a lot of places that do this but are they well­con­nected with each other and are they con­nected in­ter­state and over­seas?’’

Philip sees LaunchVic’s prime role as help­ing to forge those con­nec­tions. Grants will be avail­able to help build up the net­works of in­cu­ba­tors and ac­cel­er­a­tors so that more star­tups can ac­cess sup­port and men­tor­ing to get their ideas off the ground. The ul­ti­mate aim is to in­crease the scale of the sec­tor and cre­ate more hi-tech jobs for the state.

Philip be­lieves Vic­to­ria is per­fectly placed to cap­i­talise on the ideas boom. Mel­bourne’s world-renowned live­abil­ity, med­i­cal re­search and biotech­nol­ogy as­sets, high-cal­i­bre ed­u­ca­tional fa­cil­i­ties as well as vi­brant hubs of writ­ers, artists and de­sign­ers – who fre­quently get left out of con­ver­sa­tions about in­no­va­tion that lately fo­cus on STEM [sci­ence, tech­nol­ogy, en­gi­neer­ing and math­e­mat­ics] – are key to at­tract­ing and en­cour­ag­ing en­trepreneurs.

And while the com­mon view is that Syd­ney leads the na­tion in the start-up space, par­tic­u­larly in re­gard to its fin­tech (fi­nan­cial tech­nol­ogy) hubs and in­cu­ba­tors, Mel­bourne has scored some high-pro­file wins of late that chal­lenge the as­sump­tion. In­ter­na­tional firms GoPro, Etsy, Zen­desk and Slack have all an­nounced plans to open re­gional head­quar­ters in the city, while Ox­ford Univer­sity’s Global Cy­ber Se­cu­rity Ca­pac­ity Cen­tre has cho­sen Mel­bourne as a base for its first over­seas re­gional cen­tre for fight­ing cy­ber crime. With sev­eral ma­jor banks and in­sur­ers call­ing Mel­bourne home, the grow­ing cy­ber­se­cu­rity in­dus­try is seen as a sig­nif­i­cant op­por­tu­nity for jobs cre­ation and is a high govern­ment pri­or­ity.

“The per­spec­tive we’ve taken here is that the com­peti­tor is not Syd­ney or Bris­bane, our com­peti­tors are Ber­lin; Toronto; Boul­der, Colorado; Ban­ga­lore,” Philip says. “What’s driv­ing this are not forces that re­spect geopo­lit­i­cal bound­aries.”

Hav­ing a global per­spec­tive, how­ever, didn’t stop Vic­to­ria’s In­no­va­tion Min­is­ter Philip Dal­i­dakis rib­bing his NSW coun­ter­part Vic­tor Dominello last month. Hav­ing learned that Dominello had vis­ited Mel­bourne to tour a se­ries of co-work­ing spa­ces, Dal­i­dakis hit Twit­ter to wel­come him to “#VicTheS­tartUpS­tate 2 learn #in­no­va­tion”.

“We don’t mind NSW copy­ing [Vic­to­ria’s start-up strat­egy], just don’t ex­pect us to slow down for you to catch up,” he added, no doubt em­bold­ened by his au­da­cious poach­ing of Aus­tralia’s largest start-up con­fer­ence, Sy­dS­tart, which he cheek­ily an­nounced on the steps of the Syd­ney Town Hall last Oc­to­ber. The event will be re­named StartCon and kicks off in Mel­bourne later in the year. Philip says hav­ing an in­no­va­tion min­is­ter such as Dal­i­dakis beat­ing the drum is in­valu­able.

“One thing that gov­ern­ments can do is give con­fi­dence,” he says. “You talk about it. You tell peo­ple it’s okay to have a go and if you fail you get up and have an­other go. You then get more sys­tem through-put ... and that’s what we need.”

Philip can’t see a down­side in en­cour­ag­ing in­no­va­tion, whereas he says the cost of not al­low­ing peo­ple to have a go is great.

“The sys­tem will weed out the good from the bad,” he says. “At the end of the day, those ideas that tap into a de­mand are more likely to suc­ceed than not.”

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