Australia has the chance to become Asia's hub for hi-tech start-ups, but is losing the race to Singapore, according to prominent players in the sector.
Treasurer Joe Hockey made support for start-ups a feature of his second budget, pointing out the benefits to the economy when a company goes from nothing to multi-billion dollar giant in a few years.
"When you can have businesses in this world that were small businesses, start-ups, just a few years ago and suddenly become the great disruptors of the global economy, we have that capacity as well in Australia, we've just got to give people a chance," he said as he unveiled the budget last week.
The government announced a string of measures for entrepreneurs, including making it easier for them to crowdsource funding and allowing start-ups to offer shares in their company to staff, without subjecting them to premature taxes.
But those in the industry say the government needs to do much, much more if it wants to keep up with the competition.
"It's a step in the right direction but you need to do a lot more," US entrepreneur and investor Adeo Ressi says.
Mr Ressi, whose start-up incubator The Founder Institute has helped launch more than 1,300 companies, says Australia needs to look at Singapore, which draws in start-ups from across the region.
He said Singapore had positioned itself as the regional leader in Series A funding - the first significant round of funding for a start-up - and made it extremely easy for companies to get up set by allowing them to incorporate online in a few minutes.
"You have a great funding environment in Singapore and a super easy incorporation regime and the two of those things working together is sucking all the start-ups in," said Mr Ressi, who is visiting Australia for an event organised by entrepreneur group Unstoppables.
"Singapore is doing everything in their power to be the regional hub, but there is no reason that it couldn't just as easily be Australia," he said.
The benefits of a strong start-up sector can be significant: in Israel the hi-tech sector accounts for 12.5 per cent of the economy.
Alan Jones, chief growth guy at Australian start up incubator BlueChilli said it wasn't just Singapore that was powering ahead of Australia.
He said Australia should be looking at things like tax breaks for investors in start-ups, as well as improving science, maths and technology education in schools and universities.
"In terms of the way other innovative countries support their new industries we are still massively under-supported," he said.
He said Australia could follow the example of the UK, and allow investors in start-ups to claim an immediate 30 per cent tax deduction on their investment as well as sparing them from capital gains tax bills in the future.
Mr Jones said if the local industry was supported it could one day reach the kind of success achieved by Israel.
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