There are now more than 900,000 Australians unemployed and few job ads. And it won’t be big business that picks up the slack.
The pandemic has presented many opportunities for government to experiment with unprecedented social support programs which in many ways are effectively banning bankruptcy.
In Australia that extends to a suite of Government programs called JobKeeper and JobSeeker where participants either receive money to keep employees or help support people looking for work respectively.
In my mind this is a classic government policy. The assumption and onus is that most people want to keep their job or look for another one with little regard for anyone that wants to create one.
But this patently not true for at least a small proportion of society – for many they have bubbling creative business ideas and would probably prefer to try and create their own job, whether it be a small business employing a few people or something potentially much more significant. Why is this not even considered or supported?
Majority of job creation happens at the startup level.
In fact, Australian startup firms less than 2 years old were responsible for driving the 1.6m net new jobs created between 2003–2014 – and in the coming years, job creation is what we’re going to need as industries are up upended and technology and automation accelerates its domination into previously manual and non-digital industries.
A JobCreator payment might just be a world first for any government during the pandemic but its an experiment I would love to see play out in Australia.
A JobCreator program could piggyback of the existing payment ‘infrastructure’
I’ve blogged about the government backing creation of industries before but during the pandemic payments could go something like this:
- We allow up to 10,000 people to enrol into the program – collecting some core data on what they’re doing and what industry they’re operating in etc.
- We pay them $1,500 per fortnight, or $3,000 per month, to help cover living expenses as they work on starting their own business*
- Each month they need to claim, and prove in some way, that they’re working on a new business through some simple metric areas like, customer numbers, sales, and qualitative statements on progress
- This would last 12 months at a cost of $360 million to the government**
And we pair this with a entrepreneur and industry mentor support program which could go something like this:
- We then assign 4 participants with 1 industry mentor = 2,500 industry mentors required (not hard to find)
- Pay them too (although, I reckon some retired experienced executives and entrepreneurs would do it as a volunteer role) an equal amount to support their group of entrepreneurs depending on what industry they applied in at a cost of 2,500*$3,000*12 months= $90,000 million
A JobCreator program would be relatively ‘cheap’ for Australia to implement.
All up the program would cost $450 million in wage subsidies for job creation activity but what would the benefit be from such an experiment?
This is still a far cry from the $102 billion blow-out cost to government (aka. us, tax payers, eventually) for the JobKeepr and Seeker program as it stands.
What if we then paired this ‘cohort’ of entrepreneurial citizens with further capital such as debt for small business and VC for growth and technology businesses?
What would the outcomes be? Would they all fail? how many jobs would be created? how many new products might be invented and what new opportunities will be created for each participant?
There is only one way to find out.
Footnotes
- *This is only possible today because so many tools and services we need to start a business are now free or very cheap. For some hardware businesses this won’t help but its up to each participant what they spend on themselves vs their business!
- **And could be a great opportunity to pair with economics researcher too! This data set could become invaluable in the years to come
