Perrottet calls on governments to stop banning startups

Governments in Australia need to get over their knee-jerk reactions to emerging tech startups such as Uber and Airbnb if they want the country's economy to thrive, according to NSW Minister for Finance, Services, and Property Development Dominic Perrottet.
Written by Leon Spencer, Contributor

The New South Wales Minister for Finance, Services, and Property Development Dominic Perrottet has called for governments in Australia to do more on a regulatory basis to accommodate and integrate emerging tech startups in the local market.

In his keynote presentation at the CeBIT IT business conference in Sydney on Tuesday, Perrottet said that the knee-jerk reaction of many governments to ban, over-regulate, or over-tax new business models simply because they do not understand them needs to end.

"This fundamentally misunderstands a profound shift in society around ideas of ownership, sustainability, and mindful consumption," said Perrottet. "More than a third of millennials already belong to a sharing service.

"It is now time to have a real conversation on how we better integrate these peer-to-peer companies into the mainstream economy. It makes little sense for governments on one hand to be preaching sustainability whilst at the same time trying to suppress companies that promote better utilisation of existing assets, like cars, housing, or parking spots," he said.

Perrottet referred to a handful of companies by name that have been readily welcomed by Australian consumers -- particularly the younger generation -- but have faced regulatory stumbling blocks operating in the local market place.

"Millennials are a generation who prize access over ownership, they have been raised to ride with Uber, to holiday with Airbnb, to fundraise with Kickstarter, and to borrow from SocietyOne," said Perrottet. "These companies are creating a new group of what I call everyday entrepreneurs."

Despite claiming growing customer numbers in Australia, each of the companies Perrottet named in his speech has run into regulatory problems around the country.

While Kickstarter's crowdfunding model and SocietyOne's peer-to-peer lending model have been accepted locally after some initial concerns, Uber and Airbnb continue to come under pressure from government entities and industry groups alike.

In NSW, for example -- Perrottet's own state -- property owners have had the threat of fines of more than AU$1 million for renting rooms on Airbnb. Also in NSW, Uber drivers have been hauled to court for contravening local public transport laws and regulations.

Meanwhile, Western Australia is taking legal action against the ride-sharing platform provider directly for not having the right licence to operate in the state.

Despite these actions being taken against the United States-based internet startups in Australia, Perrottet argued that the success of such businesses represents economic opportunities for Australia, and that less, rather than more, regulation would help them thrive.

"The internet only developed into what it is today because of a light, regulatory touch initially shown by governments. That same approach is now needed for the sharing economy," he said.

Although Perrottet argued for a lighter touch from government, Sydney Lord Mayor Clover Moore used her keynote presentation at the event to update punters on her administration's strategy to promote and drive the city's tech startup scene.

"We're now refining our draft action plan to work with industry and government to create an environment that will help entrepreneurs to start to grow and to scale up their businesses," said Moore. "The plan, which will likely go to council for approval this year, suggests ways in which the city can support this dynamic and rapidly evolving ecosystem.

"Given their [startups'] potential for high growth and high impact on the city's local economy and employment, this is an important issue for us, and why we're acting to work with partners across government and industry," she said.

The plan, which forms part of the City of Sydney's economic development strategy, commits the local government to three strategic priorities: Strengthening Sydney's competitiveness; improving productivity and capacity; and promoting opportunity.

Moore said that while job growth in many of Sydney's inner city suburbs has come primarily from the IT industry, along with the tertiary education and creative sectors, the city still has a long way to go in order to fully utilise its resources.

"Sydney's startup ecosystem is still in its early stage of development, and to thrive into the future, it needs an environment which provides support, networks, business, and entrepreneurship education, infrastructure, and, importantly, access to investment," she said.

Meanwhile, Guy Kawasaki, former Apple evangelist and current evangelist for Sydney-based online design startup Canva, provided local tech entrepreneurs with some advice gleaned from his years of working for Apple co-founder Steve Jobs.

"I lived in complete and utter fear of Steve," said Kawasaki in his keynote talk at the event. "Having said that, I would not trade working with Steve Jobs for anything in my past."

Of the 10 Jobs-inspired lessons that Kawasaki outlined in his presentation, he said that the first thing for tech entrepreneurs to remember is that "innovators ignore naysayers".

"If you want to build a great tech company, you need to learn to ignore naysayers; the clueless people, the people who are pessimistic and tell you it can't be done, and that it shouldn't be done," he said.

Kawasaki also argued that customers really cannot tell companies what they need. He said that if Apple had listened to what its customers were asking it for in the mid-'80s, the company would never have developed its iconic Macintosh personal computer.

"Customers ... told Apple, 'we want a bigger, faster, cheaper version of this: The Apple II'. [But] Macintosh was unrelated to Apple II.

"Most companies define themselves in terms of what they already do; you should define yourself in terms of the benefit you provide your customers," he said.

Editorial standards