Innovator in chief
LaunchVic boss wants a sector with punch
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.”