Malcolm Turnbull’s national innovation and science agenda is a step in the right direction, but it lacks an integrated approach necessary to kick-start the new economy and employment.
To be blunt, a patchwork of tax and investment incentives won’t solve Australia’s innovation crisis. Other countries are years and decades ahead of us, and started with sound plans that weren’t designed on the run.
Take Singapore, for example. In 1998, the Singaporean government was in a similar position.
A lot of multinational tech companies placed their regional headquarters into Singapore as a central, safe tax haven for Asia, but most high-paying jobs went to expats (the equivalent of our typical 457 visa holders) because locals weren’t considered to have the desired problem-solving skills.
Local innovation was almost non-existent. The Singaporean government decided to change that to create a future for its workforce. They hired technology advisory firm Gartner and I was the management consultant leading the project.
Instead of jumping the gun with policy recommendations, we first selected eight countries (the leaders in innovation) for benchmarking. Back then, you might be surprised to hear that Australia was on the list.
We conducted in-depth research, analysed dozens of factors and prioritised them to design a blueprint for the ‘innovation nation’. A few months later, the IDA was founded.
Today, Singapore frequently ranks as the most innovative country in Asia-Pacific, with 42,000 local start-ups and almost one in 10 working-age people in Singapore trying to start or having already started a company.
Australia is now so far behind that without such a blueprint, our innovation engine will not kick-start — or will even misfire on most cylinders.
One of Australia’s key downfalls is our inability to allow failure.
Indeed, the word ‘failure’ is a chill down the spine of most Australian recruiters and employers.
With a 79 per cent chance that any start-up will fail, reduced job prospects, no other safety net for entrepreneurs, and the highest household debt in the world, it is pretty unlikely that even the most risk-loving employees in Australia will leave their comparatively cosy jobs that earn enough money to pay off their mortgages.
The fact remains that in Australia, start-ups remain the playground for a few rich kids and those 457 visa entrepreneurs. Unless we work towards a true innovation blueprint, Australia will not reach the same stage as Singapore, where 1 in 10 working people start their own ventures.
Meanwhile, a patchwork of policy has been rushed upon the population, by all sides of government.
Take the example of education – imperative in any endeavour to stimulate innovation. Ever since the first PISA study in 2000, Asian countries as well as Australia have been in a mad rush to beat the test.
NAPLAN was Australia’s internal response to PISA, and resulted in the well-documented disproportionate leaning to the multiple-choice test. At primary school, large amounts of time are now being assigned to rote learning irregular words in order to beat weekly spelling tests.
STEM is important; knowledge is important.
But how we apply that knowledge is what separates the inventors and innovators from the administrators and labourers.
While prime ministers over the past 10 years wanted kindergarten kids to learn to read and write earlier, calculate and code computer programs, science tells us that there is a right age for every learning experience.
Play, music, second languages and art are important ingredients to brain development and creativity in young children, but have been pushed out of the curriculum by the focus on rote learning and continuous testing.
The results are astonishing. Seven of the top 10 countries in the last PISA study are now from Asia. But eight of the top 10 countries leading the Global Innovation Index are northern European countries.
The two exceptions to the rule are Switzerland and Singapore, which are in the top 10 of both lists. Notably, Singapore students scored highest in the PISA assessment of problem solving, a result unimaginable in 1998.
They outclassed their neighbouring countries when it comes to exploring a problem situation and being open to novelty, tolerate doubt and uncertainty, and dare to use intuition to initiate a solution.
That’s the stuff entrepreneurs are made of today.
But instead of applying science, the Australian government tries to short-cut the process by running roundtables with a few seasoned entrepreneurs and venture capitalists, in the hope that their individual success stories will magically rub off onto the country.
Thomas Thurston from WR Hambrecht, an investment bank for disruptive growth companies, recently presented his work on predicting start-up success with data science at the University of NSW.
His predictive modelling allowed his company to lift the success rate of their investments from the industry average of 21 per cent to a staggering 67 per cent. His data also destroyed some of the old truisms that no one in the industry dared to doubt.
First and foremost, he recommends not trying to learn from the Zuckerbergs of the world — the outliers. No one can replicate their success; not even they can.
The fact is Australia doesn’t need innovation policy on the run. There needs to be a blueprint of innovation that sets out a framework in which entrepreneurs are free to take risks and commercialise their ideas.
Only then can Australia realise the true benefits of innovation that ultimately drives better-paid jobs.
Robert Finkeldey was a former vice president market & business strategies at Gartner and the founder of two startups. This opinion piece was first published in BusinessSpectator.