The Stimulus.

Where do you draw the line? How much stimulus is enough? Who misses out? These are impossible questions to answer when an economy is faltering and people are losing their jobs as a global pandemic unfolds.

So when the headline shrieks "Coronavirus: start-ups facing funding collapse" do you put it down to hysteria because we know startups fail all the time. Or have things changed?

Perfectly sound startups are wobbling and desperately holding on as long as possible - thanks to the COVID-19 pandemic. The infrastructure that supports them is showing signs of stress. How did it come to this? Such is the catastrophic financial impact of COVID-19, that no sector, least of all the one that takes the greatest risk, is immune.

Before you write off the startups, scaleups and their high growth success stories, as just the 'tech bubble' bursting, take a moment and think about the where we as an economy and society have turned in this crisis?

The tech sector is the economy

The innovation and entrepreneurship ecosystem is the backbone of the new economy.

Brought into sharp relief is the fact that without it, our economy and our society can no longer function.

We have turned to tech to learn, to communicate, to be informed, to be entertained, to shop, to pay our bills.

We do it all - online, and while observing social isolation, thank goodness we can.

The UK response

The UK's stimulus has not yet responded to the startup sector in which so much has been invested and from which so much is expected. As Adrian Sherrat reports:

“Early-stage growth businesses are crucial to Britain’s future, but they are being short-changed.” He goes on to say that “Start-ups are in freefall as there is no debt or equity support,” said Jasper Smith of Vala Capital. “If we want the foundation for a recovery to be there after the virus, action has to be taken now.”

That emphasis is mine. This is a matter of time. The UK was among the first to invest in digital to transform its government service delivery of services to the public and has a thriving innovation ecosystem that has grown strongly since the GFC.

The French response

The stimulus by Macron is decisive. He has recognised the role of the French innovation ecosystem, and backed it with a $4.3billion package.

The French government has recognised the jobs created by the ecosystem and the important contribution tech is making to keep the economy functioning during the pandemic.

It is worth presenting the commentary published by Techcrunch in full:

"France’s Ministry of State for Digital Affairs Cédric O and public investment bank Bpifrance  announced a comprehensive support plan for startups this morning. Some French startups are going to face revenue issues as well as funding issues in the coming months.

The French government wants to temporarily bridge that gap with refinancing and liquidity measures — overall it represents $4.3 billion (€4 billion).

“Startups represent a growing part the economy — especially when it comes to jobs,” Cédric O said in a statement. “They are also working on innovative products and services that have been particularly useful during the lockdown, such as telemedicine appointments, remote work solutions or deliveries.”

France has already announced a widespread economic support plan. French companies that are facing revenue issues can skip tax payments as well as rent and utility bills. The French government is mobilizing $320 billion (€300 billion) in liquidity support, which should make it much easier to get a loan as the government is backing loans.

More importantly, if your company has to stop its operations, France has a short-time working scheme to avoid layoffs. Employees receive 84% to 100% of their salary — the government will reimburse companies.

And yet, startups are always on the verge of bankruptcy. That’s why the French government is going one step further with a startup-focused support plan with additional measures.

First, startups that were in the process of raising a new funding round will be able to raise a bridge round through Bpifrance’s PIA (Programme d’Investissements d’Avenir). Some VC firms might retract term sheets, others might slow down their investment pace. Bpifrance is putting $86.7 million (€80 million) on the table. Private investors will co-invest as much as $86.7 million (€80 million) as well.

Second, the government is detailing liquidity support measures for startups. Just like other companies, they can borrow money as part of the $320 billion (€300 billion) liquidity scheme. For startups, they can borrow as much as two years of payroll for employees based in France or 25% of annual revenue — whichever is higher. This should represent $2.2 billion (€2 billion).

Third, startups can get tax returns more quickly, and in particular VAT returns and tax returns on research and development investments (crédit d’imp?t recherche). This represents a liquidity injection of $1.6 billion (€1.5 billion).

Fourth, Bpifrance is speeding up public support payments. It is going to transfer $270 million (€250 million) ahead of schedule."

Australia's innovation ecosystem

Our government's stimulus packages and the subsequent announcements have so far been silent on the peculiar needs of the innovation ecosystem.

That's not a surprise, the emphasis was rightly placed on ensuring the health of Australians first and foremost, their welfare and securing shelter. These are basic and important rights that guarantee human dignity.

My friend Murray Hurps asked a very important question recently - "what kind of new economy do we want Australia to rebound with?

While the focus has been on the traditional employers, there is a community that cannot be put into hibernation and its employees should not end up on the dole queue.

The innovation ecosystem is a community that has the capacity and the track record to carve out a place for Australia in the new economy fuelling growth and creating jobs.

Recognising this, the leaders from almost every state and territory and across every facet of the ecosystem from capital to talent have come together to make it easier for government to hear their concerns.

The Australian Innovation Council has been established to coordinate our response.

The innovation ecosystem wants and needs to work with government. The ecosystem has prepared a submission for government mapping out the measures that will allow the tech innovation ecosystem to:

• retain their staff
• keep the doors of their businesses open
• save the infrastructure that supports the ecosystem
• scale up and frame a recovery that benefits the entire Australian economy, by doing the work now that will ensure Australia is ready to do business when the threat of the pandemic abates.
• work with Australian employers and governments to re-skill workers* who have lost their jobs so that Australia can increase its capacity - we're going to need this when the economy recovers and our high growth startups unleash their global ambitions.

A uniquely Australian opportunity

Australian innovation has been going strong for many decades. We know how to create technology companies of all kinds - from the deep tech ones incubated by Sally-Ann Williams at Cicada Innovations and funded by Main Sequence Ventures to the software companies like Hyper-Anna funded by Reinventure and Blackbird to the new banks that have come onto the market.

We also know how to automate work, evidenced by the major transformations undertaken by the mining companies that now remove people from dangerous and routine work best done by machines.

Here are a handful of companies that grew against the odds. One thing becomes very clear when you look down this list, we're getting better and producing winners, so why stop now?

• Cochlear (1981) - a medical device company that designs, manufactures and supplies bionic ears, with a $10B market cap employing over 4,000 people and exporting to 180 countries.
• Resmed (1989) - a global digital company that manufactures in Australia, now valued at $35.9bn employing 5940 people. 
• WiseTech (1994) - designs and develops cloud-based logistics software solutions with a market capitalisation of $5.06bn and employing 1840 staff.
• Appen (1996) a global data company for the development of machine learning and artificial intelligence products, valued at $2.41bn with over 350 full-time employees and over 1m approved flexible workers performing tasks in more than 180 languages and 130 countries. 
• Atlassian (2002) - an enterprise software multinational that develops products for software developers, project managers and content developers. Now valued at $30B employing 4,000 people.  
• Mesoblast (2004) - an Australian-based regenerative medicine company valued at $609M. As a global leader in cell therapy and research, it seeks to provide treatments for inflammatory ailments, cardiovascular disease and back pain using stem-cell based solutions.
• Catapult Sports (2006) - An Australian company that creates wearable tech to help athletes and teams perform to their potential. It was originally formed from a partnership between the Australian Institute of Sport and the Cooperative Research Centres to maximise the performance of Australian athletes ahead of the Sydney Olympics. Employs 400 staff globally, market cap pre-pandemic of $500m, 3000 elite teams including ARL, NRL and most of NFL use it.
• CultureAmp (2009) - a $1B HR software company with 2,500 customers in 47 countries, offices in Australia, US and UK, employing 400 people and doubling revenue annually.
• Canva (2012) - the dominant platform for all design and production globally, employing over 1,000 people with a market value of $3.2B and a global monthly user base of more than 15 million. 
• Everledger (2015) - develop technology to create a secure and permanent digital record of an asset's origin, characteristics and ownership with 100 employees focused on establishing itself in a global blockchain technology market with six operational centres in the UK, USA, China, India, Israel, and Australia.
• Afterpay (2015) - a financial technology company valued at $3.3B providing a neo-credit facility to 4.6M users in the US, UK, Australia and NZ. 
• Airwallex (2015) - a cross-border payments startup with a market cap of $23B has grown to eight international offices servicing 130 countries.
• Judo Bank (2016) - a SME challenger bank for Australian business lending for SME businesses now has 140 staff and is valued at $2bn.

It's important to keep building these companies, because it means that our best and brightest talent feels right at home working for global Australian companies here and around the world.

It means that Australians can secure the skills and then the jobs that move them off the unemployment lines and out of the Centrelink offices.

It means that the nation goes back to 'punching above its weight' and productivity stops being something we talk about and more like something we are!

*An opportunity to reskill

One thing that you will realise with these companies is that they don't dig things up, they think things up, they solve a variety of problems.

Australia has an important chance in the midst of this crisis to catch up, to close the gap and to take control of market niche's in which we have a competitive advantage.

"We need to safeguard the health of Australians, save our important assets and infrastructure, and we need to double down and invest in the future that has an Australian voice, an Australian demeanour and a uniquely Australian set of values."

We know where the market is heading and where it's not likely to return - The Technology Impacts on the Australian Workforce report prepared by Australian high growth company Faethm for the Australian Computer Society spells this out.

We know the structural changes that are required, we're familiar with the story of transformation of the Israeli, Irish and Canadian economies and the role talent and skill played in shaping them.

We know how to re-skill our workforce, Australia's Stone & Chalk's Academy and Academy Xi both have excellent programs. The team at WithYouWithMe have also created a solid model for transitioning workers at scale. Launched in December 2016 the company offers tools for the assessment, training and placement of veterans in AI, cyber, data and robotics. The WithYouWithMe team has tested 17,000 individuals, most of whom were suffering from the effects of underemployment, and helped them find their next career.

Since the beginning of 2019, more than 3,500 underemployed and unemployed Australian veterans have registered for WithYouWithMe upskill tech training and they've now been placed with in jobs.

The model has proven itself. Last year WithYouWithMe was named by Deloitte as the fastest growing tech company in Asia Pacific with 13,300% revenue growth. This is the first time in more than 15 years it has been won by an Australian company.

The approach changes lives. Sean Odishio, who was one of the Squad members working in Robotic Process Automation (RPA) shares his story:

Sean left the military and knew he wanted to start a tech career, but wasn't sure how. He ended up working in a call centre, fitness and finance but couldn't make a career stick. He also tried to start his own start-up at one point looking for meaning and utilise his skills. 

It got to a point where he was considering re-enlisting in the military, before coming across WithYouWithMe. Sean decided to train in RPA as he knew the future automation will have in the workforce and wanted to be valued skills. He completed his course and joined a WithYouWithMe Squad working on a major automation project for the Australian Government. Sean says:

"I'm here today because WYWM gave me the chance to see myself from an alternate perspective.

WYWM saw hope where others didn't.

After leaving the Defence, I moved from industry to industry. I was sold false company value systems in order to sell an inferior products.

After spending time in each company I soon noticed that the core values that were projected were disingenuous and misaligned with my own.

This is why I can sit here today and be completely transparent as I BELIEVE in our core values and what WYWM is aiming to achieve.

WYWM offers hope, a chance to show the public what we veterans truly stand for.

We have the opportunity now more than ever to display the trust and compassion for each other that drive us to work tirelessly, while relentlessly adapting to the uncertainty in the market.

We dedicated a large component of our lives domestically and abroad as bastions of Australian culture and values within the defence force.

The lessons we all learnt both practically and about ourselves are invaluable."

Sean is a veteran who has benefit from being re-skilled. There are stories just like Sean's from the many private and public sector employees who have gone through the very same program. While designed for veterans, it works for everyone.

And that's the point. It works, so Australians can - get to work.

...

Maria MacNamara is CEO of Advance.org, a non-executive director on the board of the International Women's Fourm Australia and the Spark Festival.