Comments on: Innovation, Research & Governments: the Entrepreneur’s Riddle http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/ meta musings on tech, innovation, gadgets, lifestyle and the media arena Thu, 04 Dec 2008 02:55:00 +0000 http://wordpress.org/?v=2.5.1 By: metarand http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1137 metarand Mon, 21 Jan 2008 00:36:26 +0000 http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1137 Chris - I see the measures you mention as complementary rather than mutually exclusive. Reducing administrative costs where possible is commendable, but boosting the economy before it stalls would be visionary. Chris - I see the measures you mention as complementary rather than mutually exclusive. Reducing administrative costs where possible is commendable, but boosting the economy before it stalls would be visionary.

]]> By: Chris Gilbey http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1136 Chris Gilbey Sun, 20 Jan 2008 00:40:15 +0000 http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1136 Randall - love your enthusiasm, but the target is wrong. This government is looking for ways to reduce its overhead. And so they should be. The thing that needs to be fixed is tax laws that relate to early stage companies and investments. We need for founder options to not be taxed to start with - provided that there is an escrow period. That way founders and staff can receive options as part of their remuneration without being penalized. The current tax system provides no incentive for people to take non-cash remuneration. The same philosophy should be applied to investments made in early stage companies - a 10BA style scheme that will give HNW investors a way to get a 150% write off on the money they put into start ups... Sure there will be schemes developed by smart accountants just as happened in the movie industry. But the benefits will be that there will be a lot of engineers, scientists and entrepreneurs that are able to raise funds without having to go the vulture capital route. Next: Give a tax break (as in Ireland) to companies/people whose businesses are built around IP. The idea should be to keep IP in the country because of the tax implications rather than motivating IP to be sold to foreign companies so that owners and investors can get a quick return. Neither of these requires the government to find the money. These actually help create more. Randall - love your enthusiasm, but the target is wrong. This government is looking for ways to reduce its overhead. And so they should be. The thing that needs to be fixed is tax laws that relate to early stage companies and investments. We need for founder options to not be taxed to start with - provided that there is an escrow period. That way founders and staff can receive options as part of their remuneration without being penalized. The current tax system provides no incentive for people to take non-cash remuneration. The same philosophy should be applied to investments made in early stage companies - a 10BA style scheme that will give HNW investors a way to get a 150% write off on the money they put into start ups… Sure there will be schemes developed by smart accountants just as happened in the movie industry. But the benefits will be that there will be a lot of engineers, scientists and entrepreneurs that are able to raise funds without having to go the vulture capital route.

Next: Give a tax break (as in Ireland) to companies/people whose businesses are built around IP. The idea should be to keep IP in the country because of the tax implications rather than motivating IP to be sold to foreign companies so that owners and investors can get a quick return.

Neither of these requires the government to find the money. These actually help create more.

]]> By: John Wolpert http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1059 John Wolpert Tue, 27 Nov 2007 22:53:52 +0000 http://metarand.com/2007/11/27/innovation-research-governments-the-entrepreneurs-riddle/#comment-1059 I think there is no question that due to the long-term dependence on government backing of virtually all parts of the innovation "system" in Australia, pulling back and taking less of a command-and-control approach would be disasterous...a whole generation of innovation devastation would result before people realized that they need to spend their own money on research and innovation rather than relying on government. But I think it is dangerous that there is such a single-source mentality about innovation resources in Australia. (And it will be too soon if I ever again hear an Aussie saying, "that's a great idea! Let's see if we can get government to fund it!) I agree with Randal that the government (given it is already taking the money in high taxes) should give back at least a billion in venture funding, but it would be a terrible mistake to do what would be the most typical thing for government to do - give most of the billion to a small handful of venture capital managers. If there is one thing I learned spending most of my career in California it is that you need to have MANY people you can pitch for funding...because you are going to get the first nine pitches wrong or run into a VC who is having a bad coffee day. Diversity > Picking winners I think there is no question that due to the long-term dependence on government backing of virtually all parts of the innovation “system” in Australia, pulling back and taking less of a command-and-control approach would be disasterous…a whole generation of innovation devastation would result before people realized that they need to spend their own money on research and innovation rather than relying on government.

But I think it is dangerous that there is such a single-source mentality about innovation resources in Australia. (And it will be too soon if I ever again hear an Aussie saying, “that’s a great idea! Let’s see if we can get government to fund it!)

I agree with Randal that the government (given it is already taking the money in high taxes) should give back at least a billion in venture funding, but it would be a terrible mistake to do what would be the most typical thing for government to do - give most of the billion to a small handful of venture capital managers. If there is one thing I learned spending most of my career in California it is that you need to have MANY people you can pitch for funding…because you are going to get the first nine pitches wrong or run into a VC who is having a bad coffee day.

Diversity > Picking winners

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