Remember when we played cricket better than England?

If there is one thing many Australians should loathe, it’s losing to England – at anything.

There was a time not so long ago when the English couldn’t swim, play rugby, tennis, or golf.

We held the Ashes were held consecutively from 1989 through to 2003.

The Socceroos even won a friendly 3-1 against a near full World Cup-strength Three Lions.

How things have changed, and not for the better.

Until recently, Australia hadn’t won the Ashes in England over the last four attempts.

We’re not even beating them with our economic incentives and taxation policy settings!

Australia has an Early Stage Innovation Companies (ESIC) scheme to support commercialising innovation and rapidly scaling growth.

It does this by encouraging private investors into early stage companies with a 20% upfront tax relief (capped at a maximum annual tax offset of $200,000) and exempting those investors from capital gains tax as long as their shares are held continuously for a minimum of 12 months (and less than 10 years).

The UK has a similar scheme, the UK’s Seed Enterprise Investment Scheme (SEIS).

Deloitte Access Economics has benchmarked both schemes assuming an initial investment of $200,000.

Their analysis indicates an effective return of 18.5% for investments in early-stage tech companies under Australia’s ESIC, compared to an effective return of 38.6% for investors in the UK’s EIS.

That’s more than double the rate of return!

That’s the equivalent of losing an Ashes Test by an innings and 100 runs.

In a slowing economy, the attraction of ESIC from a government policy lever perspective is that it is not taxpayers’ money.

We shouldn’t be distracted by the initial tax offset and capital gains exemptions for investors.

This isn’t forgoing receipts that would otherwise end up in government coffers.

Capital is globally mobile. Just like the world’s best tech talent is not limited by geography, best-of-breed problem solvers can be found anywhere in the world, and so too the best investment opportunities are not limited by geography.

Australian investors are sophisticated, just like those in the UK.

They will allocate their investments based on where they will achieve the greatest return.

How do we ensure a greater share of Australian private capital is retained and invested in Australia rather than going overseas; capital that can expedite our future economic growth? Bettering the UK’s SEIS would be a strong place to start.

There are more than 1,700 tech scale-ups in Australia that are providing an important source of innovation, committed to disrupting the status quo, finding new ways to build business models, enhancing the competitiveness of Australian industry, generating export revenues, and creating Australian jobs.

It is however estimated that 97% of scale-ups will fail to scale and commercialise, ending in an exit due to difficulties in attracting investment between initial funding and commercialisation.

Does anyone think that this is because Australian ideas are inferior to those overseas?

Or that our best talent in Australia can’t compete with the best talent overseas?

Of course not.

To be successful, our tech scale-ups are building products for a gap in the market they see on the three to five-year horizon.

They are attracting customers who are market leaders and early adopters, and who too see early problems they need to solve.

Once the minimum viable product is up and running, our tech scale-ups need to double down and build out their products to win the bell curve, post early adoption.

And this can’t be achieved without capital and talent.

We need to be moving faster than our overseas competitors who are working to win that same gap in the market.

There are a number of incredible technology and data-enabled businesses in Australia: WiseTech Global, Canva, Airwallex, Nearmap, Quantium to name a few.

We need to fast-track adding hundreds of Australian companies to this list.

The good news with Brexit looming, our dear English friends are, well, in need of friends.

In any free trade agreement, I think we could successfully run a line that the UK’s SEIS should include Australian companies allowing UK investors the same tax breaks on the basis of improving technology and knowledge transfer.

For now though, how about we just focus on keeping our private capital in-country and lift Australia’s ESIC to better the English system.