Invest
Does Australia need foreign investment?
Australia’s low venture capital investment is costing jobs and hurting the economy, with foreign investment a way forward, suggests an industry expert.
Does Australia need foreign investment?
Australia’s low venture capital investment is costing jobs and hurting the economy, with foreign investment a way forward, suggests an industry expert.
According to Atlas Advisors Australia executive chairman Guy Hedley, Australia has a very low venture capital per capita rate of $15 to $30 amounting for less than half the OECD average and four times lower than Sweden at $122, United Kingdom at $114, and France and Germany at $60.
AusIndustry data shows that 40 per cent of the 84 registered venture capital funds didn’t make a single investment in fiscal 2019 and only 14 per cent made 10 or more investments.
“It was important to consider that the economic benefits, including employment and patents, were driven much higher by allocating to venture capital than to secondary public market equities,” Mr Hedley said.
The fund manager noted while investment in venture capital has increased to $1 billion in annual commitments, investment in early-stage venture capital seed funding declined by as much as 46 per cent in the past four years.
“It is estimated that investment in early stages has been about $75 million spread across 138 deals in fiscal 2019. This is down significantly from $180 million across 270 deals in 2016,” Mr Hedley said.
He believes the way forward is through government intervention through SIV programs which offer a four-year pathway to permanent residency for individuals willing to make investments that will drive innovation and commercialisation of Australian ideas.
“This could be significantly increased by boosting the asset allocation towards early-stage investments under the SIV’s complying investment framework,” he said.
“Even with a strong proportion of new SIV approvals, we are unable to meet the growing demand for seed and early-stage venture capital.
“Where an investor elects to allocate 50 per cent of the investment framework into venture capital and growth private equity funds, there should be a reduced visa period of three years or a prioritisation of the application for processing.”
nestegg has previously reported on where venture capitalists are investing over the next decade.
About the author
About the author
Economy
Australia is out of a recession: RBA
Australia is out of the first recession it has had in almost 30 years despite lockdowns in Victoria being an anchor on the Australian economy, the RBA has confirmed. ...Read more
Economy
The budget that forgot women is a missed economic opportunity
The federal budget was a chance to attack two pandemics simultaneously: COVID-19 and women’s safety and security. Addressing the latter has huge economic (and social) benefits that would significant...Read more
Economy
Victoria falls to third on economic performance
COVID-19-induced lockdowns have seen Victoria slide to third place compared with other Australian states and territories on key economic performance indicators, new research has revealed. ...Read more
Economy
5 ways the election could impact your US investments
With the Biden v Trump election just around the corner, investors in the US market need to watch out for a host of possible scenarios in the event of a changing government, an industry expert has flag...Read more
Economy
Lots of ammo, wrong target: Budget fails to hit its mark
The latest Treasury budget is the right size but is poorly targeted, with the focus on supply when a lack of demand is the real issue, according to an expert. ...Read more
Economy
Administrations rise as zombie firms accept reality
Business administrations have started to rise for the first time since June, with Victoria and Queensland recording the biggest spikes, new data from CreditorWatch has shown. ...Read more
Economy
Does the central bank favour the rich?
Current monetary policy strategies, including slashing cash rates and quantitative easing, are inflating asset prices and creating a greater inequality gap, an industry expert has said. ...Read more
Economy
Renewable energy, childcare subsidiary to kickstart the economy
Opposition Leader Anthony Albanese has promised childcare subsidies and an overhaul of the energy system as part of his plan to kickstart the economy. ...Read more
Economy
Australia is out of a recession: RBA
Australia is out of the first recession it has had in almost 30 years despite lockdowns in Victoria being an anchor on the Australian economy, the RBA has confirmed. ...Read more
Economy
The budget that forgot women is a missed economic opportunity
The federal budget was a chance to attack two pandemics simultaneously: COVID-19 and women’s safety and security. Addressing the latter has huge economic (and social) benefits that would significant...Read more
Economy
Victoria falls to third on economic performance
COVID-19-induced lockdowns have seen Victoria slide to third place compared with other Australian states and territories on key economic performance indicators, new research has revealed. ...Read more
Economy
5 ways the election could impact your US investments
With the Biden v Trump election just around the corner, investors in the US market need to watch out for a host of possible scenarios in the event of a changing government, an industry expert has flag...Read more
Economy
Lots of ammo, wrong target: Budget fails to hit its mark
The latest Treasury budget is the right size but is poorly targeted, with the focus on supply when a lack of demand is the real issue, according to an expert. ...Read more
Economy
Administrations rise as zombie firms accept reality
Business administrations have started to rise for the first time since June, with Victoria and Queensland recording the biggest spikes, new data from CreditorWatch has shown. ...Read more
Economy
Does the central bank favour the rich?
Current monetary policy strategies, including slashing cash rates and quantitative easing, are inflating asset prices and creating a greater inequality gap, an industry expert has said. ...Read more
Economy
Renewable energy, childcare subsidiary to kickstart the economy
Opposition Leader Anthony Albanese has promised childcare subsidies and an overhaul of the energy system as part of his plan to kickstart the economy. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
