The real resources sector in Australia is our entrepreneurs: Mark Bouris

Don’t you get sick of hearing about the importance of the resources sector?

I’m looking at a different kind of gold mine: the thousands of Australians with a good idea and the desire to start a new enterprise. These are people who will put it all on the line to pursue something new and innovative, yet most of them can’t get the support they need in this country.

The excellent story by Asher Moses in the Sydney Morning Herald a little over a week ago that highlighted the number of young Australians taking their ideas to Silicon Valley because they can’t get a start here really annoyed me.

Why? Because the real “resources” sector in this country is our people. The minds of our young people is where the national wealth and economic growth of the next 50 years is going to come from.

Yes, the current minerals boom is putting wealth in our pockets. But when the stuff in the ground dries up, Australia will need what has always sustained the US economy, and that is innovation, patents, high technology, medical advances, miracle drugs, etc.

The real test of an economy that wants entrepreneurs is what they call the “commercialisation” phase.

Commercialisation must support both the entepreneur and the investor. The entrepreneur needs investment and expertise and the investor needs to manage their risk and boost their capital gains.

Entrepreneurs typically get their finance from debt or equity.

But in Australia, banks do not like high-risk loans or loans to people lacking in a business track record. And our equity investors typically prefer to invest in entrepreneurs who are in expansion mode rather than start-up because our tax laws do not make the risk of the start-up worth the reward.

Corporations may be interested in an innovation, but they shy from equity investment because of corporate governance issues.

This leaves the role of government which should be allowing the right taxation, banking and regulatory environment for entrepreneurs and their investors. We have to allow talented entrepreneurs to find the money, not to have governments create cash bonanzas so long as you invent what they want.

The Commonwealth Treasury, in its research paper Measuring Entrepreneurship, found that the European government emphasis on investing in R&D at universities and corporations during the 1980s and 1990s had not resulted in the expected increase in economic growth. The “critical link” between R&D and economic growth was entrepreneurship.

We have the talent in this country, and a new generation is finding ways to make their dreams a reality. But they need the education and the opportunity – they need advice. I’m hosting a business seminar this week, and I’ve been inundated with questions from smart young business minds who are looking for answers. So I am going to help.

Australia is turning out a new breed of entrepreneur that will be the future of this country and we need to do right by them… or lose them.

Mark Bouris is executive chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a Q&A session on Twitter every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.

Mark is hosting the Secrets to Business Success Seminar on Wednesday 30 May in Parramatta. For more information visit www.ybr.com.au/seminar