Global Travel Media » Blog Archive » What Australia needs is aggressive entrepreneurship

Home » Business News » Currently Reading:

What Australia needs is aggressive entrepreneurship

February 23, 2017 Business News No Comments Email Email

GLOBAL economic juggernauts like Alibaba[1] will threaten Australia’s banking system unless the country quickly develops its own ‘ecosystem’ of entrepreneurial success stories, according to Tyro Payments, the first Australian IT company to be granted a banking licence.http://join.travelmanagers.com.au/

Speaking to 600 entrepreneurs and investors at the Wild Digital Conference in Sydney, Tyro’s Executive Director Jost Stollmann said that even Australia’s largest companies were vulnerable to foreign competitors unless they stopped being so complacent.

“Australia is almost unique in the western world, with nine out of 10 of its top companies established more than 100 years ago, during the horse and cart era,” he said.

“Four of these are Australian banks, which leaves them ripe for disruption. The only question is whether disruption will come from an ecosystem of Australian startups working collaboratively to provide consumers and businesses with a better deal.

“Or will it come from global economic juggernauts like Amazon or Alibaba, who are currently eyeing the Australian economy with disbelief at the opportunities available for new competitors here.”

Mr Stollmann said the digitalisation of the global economy was sweeping away companies frozen by an analogue mindset, unwilling to provide the efficiency and convenience customers now expected.

“In the United States, five of the 10 biggest companies were formed in the last 40 years alone[2],” he said.

“These include Microsoft (1975), Apple (1976), Amazon (1994), Google (1998) and Facebook in 2004. Apple alone is six times bigger than BHP.”

According to Mr Stollmann, the common factor with all of these companies is the quest for efficiency and giving customers what they want.

“Australia needs to capture the creative energies of its people, and develop companies of the future that can harness the opportunities created by the digital economy,” he said.

“We need to show more boldness and innovation, and be more willing to take risks in order to realise the almost unlimited potential we have before us.”

Mr Stollmann also noted that investors and banks need to realise that there are more asset classes than property, cash and blue-chip shares.

“The returns from investing in mature scale-ups entering the critical growth phase could be profound, and make the endless debate about Sydney and Melbourne property prices redundant.”

Mr Stollmann said Australia was a backwater when compared to the size, courage and sheer commercial creativity of the United States, the greatest economic force the world has known.

In the five years from 2007 to 2012, Australia’s banking sector became more concentrated, and insulated from competitive domestic forces.

This involved RAMS, St George, Bankwest, Wizard, Challenger, AXA, National Mortgage Brokers and Aussie Home Loans all being swallowed up by the big four banks.

Table 1: Australia’s top 10 companies (by market capitalisation)[3]
Rank Company Year established
1 CBA 1911
2 Westpac 1817
3 BHP Billiton 1885
4 Australia and New Zealand Banking Group Ltd (ANZ) 1835
5 NAB 1858
6 Telstra Corporation 1901
7 CSL Limited 1916
8 Wesfarmers Ltd 1914
9 Woolworths Ltd 1878
10 Macquarie Group Ltd 1969

Tyro research has found banking inefficiency costs Australian SMEs more than $7 billion a year.

In addition, according to Macquarie Research, Australian businesses want to borrow $60 billion more than banks will lend them, owing to restrictive lending practices.

Mr Stollmann agreed with PayPal co-founder, Max Levchin, who stated that banks are “too big to fail, too big to innovate.”

“In Australia, the banks are trapped with legacy IT systems, opposed to open banking that will bring more competition into the market and are using their size to keep alternatives out of the market,” Mr Stollmann said.

“Fintech challengers on the other hand are creative and agile, with a cost advantage over the big four that allows them to cherry pick the latest IT offerings for the benefit of their customers.

“The mindset in Australia has to change. We need ambitious and aggressive entrepreneurs reaching for the stars.

“The Government, regulators and investors need to do more to support our startups and scale-ups so that in the not too distant future, we will see more high-growth innovators hit our market.”

Comment on this Article:







Time limit is exhausted. Please reload CAPTCHA.

Platinium Partnership

ADVERTISEMENTS

Elite Partnership Sponsors

ADVERTISEMENTS

Premier Partnership Sponsors

ADVERTISEMENTS

Official Media Event Partner

ADVERTISEMENTS

Global Travel media endorses the following travel publication

ADVERTISEMENTS

GLOBAL TRAVEL MEDIA VIDEOS

ADVERTISEMENTS