11 October 2015
by Gabriela Motroc

Education system failing the next generation of entrepreneurs, SMEs say

The current education system is failing to teach the next generation of entrepreneurs the skills they need to transform their businesses into powerhouses, according to a new survey of small and medium enterprises by MYOB.

The business solutions provider quizzed over 400 of their SME clients around education and its connection to the success of domestic small businesses. MYOB discovered that some 58 per cent of the respondents believe the education system does not help shape the business leaders of tomorrow. Two-thirds of those surveys concluded that the education system fails to teach students the ABC of how to run a business. Plus, 43 per cent felt that the education they received did not help them understand how to run their small businesses.

Simon Raik-Allen, MYOB’s chief technology officer, believes “there is much more we can do to support innovation across the country.” Although the focus on entrepreneurship is crucial to the country’s economic success, over 40 per cent of SMEs “are at risk of failing in the first few years” because they don’t know how to manage and overcome difficulties. He indicated that Australian business people are learning “on the job” and opined that entrepreneurship could be fast-tracked if they received more information in school, private colleges, universities etc.

MYOB CEO Tim Reed told SmartCompany that the business world has moved forward, but the problem is that the education system has remained the same or has gone “backwards.” Although he acknowledged that entrepreneurial skills are “very difficult to teach,” an emphasis on business skills is needed, which is why he welcomes the overhauled national curriculum. The slimmed-down national curriculum, which ensures that 21st century computer coding will be taught in schools from Year 5 and programming from Year 7, was approved by former Education Minister Christopher Pyne in one of his last acts before becoming the country’s Minister for Industry, Innovation and Science.

The government will be pouring $12 million AUD into four STEM initiatives: a P-TECH-style school pilot site, the introduction of computer coding, the development of innovative maths curriculum and the funding of summer schools for STEM students from underrepresented groups. Computer programs and software represent the driver of productivity improvements in a number of fields, so allowing children to learn coding will help Australia to maintain its position as a first world economy.

Raik-Allen emphasized Australia’s need to “future-proof” its students and to make sure they receive the support and skills they need to start their own businesses and “flourish earlier on in their career.”

In an op-ed for the Australian Financial Review in early October, Coalition backbencher and tech industry veteran David Coleman proposed the Federal Government abolish capital gains tax for small start-up investors to boost investment in the local tech sector. Coleman suggested dissolving the need to pay CGT on all equity investments in private businesses less than two years old, with less than $1 million AUD revenue in the last 12 months, no matter the length of investment or type of investor. According to the tech industry veteran, Australia needs to diversify its economy and build more start-ups because “we can’t rely on resources in the way that perhaps we have in the past.”

The survey by MYOB highlights “a yawning gap that we could quickly address, to put business ownership within reach, and making it a desirable goal,” Raik-Allen concluded.