It may not be Silicon Valley, but Australia’s tech industry has still spawned its fair share of tech unicorns and global success stories.

But as venture capital funds grow larger and local startup hubs continue to expand, the sector is still struggling against the vicelike grip of restrictive immigration laws.

And as a result, Australia risks missing out on a “perfect storm” of global talent flows sparked by various geo-political issues in the traditional tech hotspots.

To get some evidence on the matter, Stockhead spoke to two experts with practical experience on the ground — a startup founder and an immigration agent — who explained how the current framework is prohibiting growth.

The startup

Kris Moyse is cofounder at retail tech startup Proximity Insight, a platform which provides real-time data for sales associates to assist customers on the shop floor and drive engagement.

Headquartered in London with offices in New York and Sydney, the company works with a global list of clients including, David Jones and MCM Worldwide.

Moyse recently hired a UK engineer to work as part of the Australian dev team — a process which brought him into direct contact with the immigration department.

In short, “it was an absolute nightmare”.

“I had to try and fit in a box what the job title is, and for a startup doing something new, the job won’t necessarily fit in that category,” he said. “Eventually we went down the line of a technical support role, but it’s still like trying to fit a square peg in a round hole.”

That was followed by disputes over what sites the company had used in its local job search and minuscule errors on their employee’s application form. Eventually, Moyse just hired an immigration lawyer.

“That gets us an extra six months and now the process will restart, but for a legit startup with a global footprint trying to bring talent in, the process is just incredibly difficult,” he said.

The immigration agent

As a director at DMA Migration, Angus Browne has plenty of experience working with Australia’s tech scene when it comes to hiring foreign talent.

Operating within the Fishburners innovation hub, the company provided advisory services to five startups, which DMA set up to become sponsors.

But things have changed, starting with the federal government’s abolition of the 457 visa in April 2017. The coalition replaced the 457 with other visa options which it said addressed “genuine skill shortages”.

But from that point on, the visa process has become “much more onerous and expensive”, Browne said. And the changes on the ground have been quite stark.

“In terms of startups, what we’ve seen is that effectively we now have zero startups that we deal with. It’s such a painful process and it’s not something many startups can afford.”

He said successfully completing the visa process is now predominantly the domain of large multinationals operating in Australia, who have the resources to complete it.

For a startup bootstrapping costs, the visa process starts at $4,800 and if there’s a “full-stop in the wrong place”, the department rejects it.

Browne said the net effect is that instead of retaining talent, Australia is losing it.

“I’m aware of two promising startups that have both employed around 10 Australians and were looking to expand, and both have relocated to Singapore because they couldn’t access the talent they needed here,” he said.

The war for talent

In scaling up a product with global application, Moyse said he’s been through the visa process in the US and UK, and hasn’t had problems.

He cited the effectiveness of America’s E3 visa, which simplifies the process for attracting skilled foreign workers in a field connected with their university degree.

At the same time, he noted the recent wave of populism has ushered in a protectionist stance in those jurisdictions, which could result in a “perfect storm” for Australia.

“If we focused on opening up the market here, we could have a big flood of people coming in — as long as you make it easy, accessible, and clear in what people can actually do,” Moyse said.

Browne took a similar view, highlighting that a proactive approach towards skilled immigration has a multiplier effect on the Australian jobs market.

“Say you bring in a developer who can build the product, then off the back of that there’s marketing and finance jobs as the business grows — they can all be Australians,” he said.

The pair aren’t alone in calling for change — tech luminaries such as Atlassian’s Mike Cannon-Brookes has been vocal in his views about the direction of Australia’s immigration policy.

Moyse said any meaningful change will require a shift in mindset, to partially reset a status quo which has become entrenched over 28 consecutive years of economic growth.

He said the sector Proximity Insight is looking to disrupt — retail — is a good example of an Australian industry that now faces difficult challenges from global forces such as online shopping. And those forces will require a similarly global solution.

“We have talented people with really good ideas. If we made Australia a bit more investor-friendly and take extra steps to actually attracting talent, we could absolutely kick ass,” he said.

“Everyone wants to be here, now it’s all about opening the market up to investors and skilled employees.”