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Because it’s Singapore

Wednesday, July 22nd, 2009

I’m spending a few days this week in Singapore – I think this is my fourth visit so far this year. I spent a lot of time here in the late ’90’s with Tandem and then Compaq, so remain pretty familiar with the island.

It has been interesting to take stock of the economic situation up here; while I’m somewhat detached from the rigours of the local property market, there are some telling signs that Singapore is as challenged as most other countries by the GFC, yet better-equipped to deal with it. Firstly, the government announced yesterday that it was way ahead of its public service recruitment goals for the next two years, and unusually for Singapore, was making quite a number of mid-career appointments – usually public service recruitment is restricted to new graduates. One can only suggest this acceleration is at least in part due to a higher than planned unemployment rate in the private sector.

Secondly, it was telling to hear of Chip Goodyear’s sudden withdrawal from the CEO-in-waiting position at Temasek, with Ho Ching remaining as Executive Director and CEO.  And this despite a multi-year, well documented succession process. The Straits Times remains coy on the reasons, quoted as “strategic differences” between Mr Goodyear and the board. But as one of the world’s largest sovereign wealth funds, I can’t help but wonder if its a case of the board now simply wanting to maintain the status quo with the proven – and politically safer – existing leadership team.

Finally, I’ve been continually fascinated with efforts the government makes to stimulate progress in the technological and innovation sense; part economical, part through piloting fresh initiatives and seeking private companies who can deliver and lead public technology efforts. We’re aiming for involvement in several of these projects, and while time will tell whether or not we are successful, I think it will be far from my last visit to the island republic in 2009.

On the downside, it’s raining this morning, and sans umbrella, I have no idea how I am going to get to my meetings without getting soaked. Because it’s Singapore, of course – and that’s what happens here. And I love it.

Posted in Business, Politics | No Responses »

Where is Australian Business Media on Innovation?

Thursday, June 4th, 2009

A few weeks back I blogged about the perceived implementation delays surrounding Minister Kim Carr’s 18th March 2009 announcement of up to $83 million to early stage companies who have been “starved of funds due to the global financial crisis”.

Its coming up to three months since the announcement date, and it appears that neither the Minister nor the licensed venture capital fund managers have any specific knowledge on when and how the program will be initiated, much less on when the funding will actually flow to qualifying companies.

The Minister’s own press release said this funding was critical: “If we lose these innovative companies we will never get them back”.

A stated benefit of the fund was that “making money available will boost confidence and help shake loose additional private sector capital”. It stands to reason therefore that by not implementing the so-called Innovation Investment Follow-on Fund (IIFF) we will lose companies, we will lose those (apparently valued by the Minister) “high-skill, high-wage” jobs.

So where is the Australian media on this? If Apple, or another US multinational so much as hinted of a new product, and then delayed the launch, Australian business and technology journalists would be wailing about the wait each day.

C’mon folks – you know who you are. How about asking a few questions for the sake of Australian Innovation?

Posted in Business, Politics, Venture Capital | 1 Response »
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Clearly, “soon” wasn’t possible, was it Senator Carr?

Tuesday, May 19th, 2009

In his March 18th 2009 press release, Australian Federal Minister for Innovation, Industry, Science and Research announced a (and I quote) “Boost for Start-up Companies and Jobs – Securing the Future Beyond the Financial Storm”.

The Innovation Investment Follow-on Fund (IIFF) was to be all about ensuring a future for innovative companies beyond the global financial crisis for companies that have watched venture capital investment dry up with the Government’s withdrawal of the Commercial Ready R&D grants in May 2008. In March, a figure of $83 million was announced to fund investment fund managers that wanted to make follow-on investments in their qualifying portfolio companies.

Two months later, the date on which even the details are to be released to the licensed investment fund managers is still a closely-guarded secret.

There’s some terrific quotes in the release:

Making money available for reinvestment will boost confidence and help shake loose additional private sector capital.

and this one:

It is essential that we help these fledgling companies ride out the crisis.

But it is really bittersweet to re-read this release now. In the last two months, I suspect that dozens of companies have either had to raise emergency “down rounds” (usually to the delight of rapacious VCs and angel investors) or worse, had to lay off staff to survive. This has a major impact on the psyche of employees – there could well be a generation of educated, intelligent innovators who may never want to work for an emerging company again as a result of being laid off in such a manner.

I want to be clear and state that I support Government programs that stimulate and assist the commercialisation sector. We have to help ourselves. As an entrepreneur, I get disappointed when I hear about companies who simply ride the grant “gravy train”, and don’t get me started on the percentage of grant money that ends up in the hands of “grant consultants” as a result.

But I run  a focused, emerging company that is developing and commercialising technologies here in Australia, employing Australians, and – importantly – gaining customers and revenue. We’ve been surviving despite the lack of breadth in venture capital in this country, even before the global dowturn. We aren’t sitting on the gravy train – we’re running on revenues. And yes, various happenings in the telecoms industry in 2009 have really hurt us. Yet just as Government programs emerge, or we’ve grown to the size where they are relevant (such as our ill-fated Commercial Ready effort last year) they are withdrawn. Or worse – delayed. Indefinitely. 

The closing sentence of the press release just cracks me up:

Funds will flow to companies as soon as possible.

There’s an old adage that says “those who can, do”. We will just have to keep “doing”, because Minister Carr’s department seems unable to follow through with its announced commitments. And because, in the real world, “soon” just doesn’t make the grade. 


Posted in Business, Politics, Venture Capital | No Responses »
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Employee Share Schemes go out the Window in Australia

Tuesday, May 19th, 2009

I’ve blogged previously about the Australian Government’s seemingly mindless attacks on support initiatives for innovation companies, but this latest ignorance really takes the cake.

In last week’s federal budget, the Government closed what it considered a “loophole” which allowed company employees to defer personal tax liabilities on company shares or options they are granted as part of a remuneration scheme. Employee share ownership plans (ESOPs) are a really valuable way of engaging key staff in an emerging company. It empowers “ownership” in a true sense, and is something that I’d preferred to engage our key leadership and growing team here at Locatrix.

Unfortunately, it’s also a method that highly paid executives of ASX-listed companies have used to defer tax, something the government is hell-bent on cracking down on. Fortunately, I’m not the only one complaining about this decision.  There’s also a page one article in today’s Financial Review (link only available to subscribers).

While they probably have good intentions in one regard, Minister Tanner & co have again made a decision oblivious to the impact it has on the folks who work genuinely to create innovation jobs in this country.

Again, Mr Rudd, I voted for you. Willingly. Because I believed the country needed change. But as an entrepreneur, working to create jobs and commercialise Australian innovations, you are really, really disappointing me.

Posted in Business, Politics | 1 Response »
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Finally, the Great Southern Network

Tuesday, April 7th, 2009

Like a lot of people this morning I had a “what the….” moment when Kevin Rudd announced the Federal Government’s decision to not award the NBN contract to a successful bidder; instead they will terminate the bidding process and invest billions in a FTTH network that over the next 8 years will reach 90% of the population.

Whatever your politics, it’s a bold, bold move.

Senator Nick Minchin was first off the opposition front bench to decry the decision as a “monumental policy failure”, while Senator Fiona Nash claims it was the National Party’s idea in the first place.  (Does this mean that it’s OK to have a dumb idea, as long as you don’t implement it?)

News sites, blogs and Twitter are all running hot today as everyone with a brain (and many without) expresses their opinions.  So here’s mine:  Good decision, Mr. Rudd. Instead of a lowest-cost FTTN network, we’re going to have a surprisingly well-funded (over A$40b) government-controlled piece of common infrastructure on which retail ISP’s will be able to compete equally on service and price.  Over fibre.  To my house!

Australia’s sheer size and sparsity of population makes physical networking a challenge, unlike, say Singapore, where fibre to the home has been largely a reality for the better part of a decade.  So it makes sense to learn from failed commercial exercises like the roll-out of cable television infrastructure that if we’re going to have internationally competitive infrastructure, we need to level the playing field.

In theory, the Australian government has just taken the first steps to this objective. Time and history will tell whether they get the execution piece right.

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