In a roundtable in conjunction with PwC, BlueNotes managing editor Andrew Cornell discussed the issue with CFA Society of Melbourne past president Paula Allen, Managing Director at OurCrowd Australasia Dan Bennett, Executive Chairman of Good Super Aron D'Souza and PwC Managing Partner Chris Dodd.
In this final part of the series, we began by asking about the Australian federal government's changing attitude to innovation. You can read part one here.
" There are fundamental flaws in how we've structured super in this country."
Aron D'Souza, Executive Chairman of Good Super
Andrew Cornell: There are a couple of themes at work here. One is structural – including regulation and taxation which we have already discussed – but the other is risk appetite and the attitude to innovation.
Late last year we saw an innovation statement from Prime Minister Malcolm Turnbull, will this help?
Paula Allen: I think the biggest thing that struck me and I think all of Australia was the preparedness of the government to have the open conversation about innovation. I think that's the big issue – it's a shift.
There are fundamental flaws in how we've structured super in this country, particularly when it comes to liquidity issues, but at least we are prepared to have that debate now and I think it will take us a long way forward.
Chris Dodd: I think the government has encouraged a 'license to question' mentality. We have a noble objective of what we want to head towards and now it's about having the conversation around what we as a country are willing to do to get there.
It's got to be a broader conversation than just 'how do we get more innovations from start-up companies?', it's got to be about considering if we doing enough to encourage the big companies and established institutions to innovate, too. But is business the only place where innovation comes from? That can't be right.
We also have to think about what system we are bringing students through to allow them to be as innovative as they can be. We talk about STEM subjects but actually that exact description of STEM – science, technology, engineering, mathematics - is about the most boring way we can describe the four subjects we want the kids to do.
Calling them STEM is probably scaring them away. We need to call it 'digi' or coding or anything that creates a completely different conversation about engineering and maths.
Dan Bennett: I agree. That's so fundamental to the success of increasing our kids' participation in STEM.
Turnbull has generated discussion but has he made it snazzy? I think just the fact he has started the conversation and also innovated himself gives him a level of street cred we are not used to in a politician.
I don't think Angela Merkel or Barack Obama can say, “I once started an internet company". Turnbull just has cred that allows the conversation to get going.
Aron D'Souza: One of the fundamental problems is we have a massive talent drain in Australia. I think it's something like nine out of 10 young Australians want to work abroad according to a survey produced by recruiting firm Robert Walters.
Over the coming months, BlueNotes, in conjunction with PwC, will explore some of the big ideas discussed at the forum and speak with participants. It's important to keep the debate around innovation alive and begin to pave a way forward to secure Australia's future prosperity to the benefit of the entire community.
That is actually a number higher than I expected and many of the ones abroad are talented, capable and well-resourced. We are losing our best and brightest minds.
If you are an undergrad at Harvard and you've just finished your degree and you want to get some experience around the world, your options are obviously Oxford and Cambridge, but also increasingly places like the National University of Singapore.
How many Harvard undergraduates come to study in Australia? Practically zero. That's nowhere near the numbers we need in order to retain our talent and attract the best global talent. If we are going to be inventive we need the government to look to address that too.
DB: I see a lot of it first hand and I agree with aspects of what Aron's saying. But I do think the 10,000 Australians who are currently working in Silicon Valley will benefit from the initiative. The whole proposition of having key landing pads in places like Israel and the US is an important bridge for Australians.
I think it is an interesting proposition that we have really bright Australians going out into other markets and learning how to be best in the world and then, hopefully, eventually coming back home and bringing a lot of expertise with them.
Attracting fresh talent and getting them to come over to Australia just because we've got sunshine and beaches is probably a tricky sell. But to skill up our existing Australians and use them as advocates evangelising the Australian story picking up great skills and returning with those abilities is an interesting opportunity.
I'm really impressed with the government for committing capital and focussing on it as an opportunity. We should be cultivating Australia's young people and talented individuals who are busy not only trying to develop rockstar international businesses but also great local businesses that are domestically focussed.
AD: There is one thing we haven't resolved as a nation which is our country's unique selling point - what makes us special and where do we have the comparative advantage?
New Zealand has “100% pure" which sells well globally. Americans have the “City on the hill as the beacon of hope and freedom". What are we here about as a nation - what is our purpose? What is our goal?
If we can figure out what our purpose is as a nation and have a real debate about it - and keep it as an intellectual debate not a policy one - we can figure out what our long-term goals are and then actually develop strategies to delivering against them.
Photographer: Neale Cousland / Shutterstock.com
Until we do that I don't think we will be able to attract the top pool of talent because if it's just about lifestyle – you know, if it's just about nice beaches and a high quality of life – then should play to that and sell it on a global level. But that might not be compatible with innovation.
AC: So where to from here? Again, setting aside the elephants of taxation and more onerous regulatory change, are there other dimensions to the challenge of a flourishing innovation culture?
PA: I think Dan's point is a good one and so too is Chris's about selling the innovation story to the right groups of people. If we are really going to focus on innovation and bring talented people back to this country and keep people in this country then it's about capturing the new sexy stories.
Part of this success is as simple as giving people a better tax structure - it won't change things overnight but it starts the story changing and then we can attract better people and new ideas.
Another example of opportunity or innovation for our country comes from the climate change debate. You look at all the new technologies that are going to have to come out of climate change. I think that starts potentially the next industrial revolution.
DB: I think the Australian market at the moment in terms of start-ups is pretty small. If you consider last year only about $150 million dollars was deployed into Australian start-ups.
I do think what we lack in Australia are heroes who have essentially done it before and done it really well. This is what I think is so exciting about Atlassian.
I think in Australia there's a good focus on health, there's a focus on fintech. One recently compiled list of the top 100 fintech companies globally included nine Australian companies. We made it into the top 10, which is pretty exciting. There is definitely more to come in this space.
This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. The views expressed in this document are the views of the individual author and are not to be seen as the views of PwC.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
07 Feb 2016
04 Dec 2015
07 Aug 2015