Today these 3 examples appear to be obvious success stories, but the reality is each have overcome tremendous hurdles and changed industries with bold, risky concepts. There is in the US a willingness from a range of stakeholders, investors, consumers, suppliers and board members to support companies that are taking monumental risks, and in my opinion it is the only way that we’re going to have an impact on big issues. From addressing the transport demands of congested and urban cities to challenging the world order on climate change, tackling major world issues through technology is a high-risk, high reward scenario.
There’s no question the rewards are out there. And the risk of failure is very high. But by making failure as acceptable and manageable as possible, the downside is minimised while the upside remains there for the taking. That tips the whole equation towards high value outcomes. To be clear I’m not advocating to abandon legal/regulatory or ethical responsibilities as reputation is everything in business, but rather to take strategic or business risk.
Risk taking is fundamental to a vibrant startup community and by definition an innovative and growing economy, but it is not fully ingrained in the Australian mentality. Yet. Maybe it is that we have become complacent as a result of 25 years of unprecedented uninterrupted economic growth! It’s not the Australian way that I remember from my childhood, where “having a go” not just on the sporting field but in starting your own business was more the norm.
As a country and a startup community we have much to be optimistic about. Over the last decade we have made significant strides in fundamental ingredients necessary to enable innovative startups to be born and thrive. We have a phenomenal education system, we have made significant inroads in having ready capital for new ventures, and we have some great role model entrepreneurs who have given future generations home grown icons to aspire to be. However, there’s one thing holding us back: our appetite for risk.
In order to take Australia to the next level in a global digital economy, we need to see corporations, investors, board members and governments embracing risk. That means investing in long-term R&D, partnering with innovative young companies, and becoming swift adopters of technology. Too many are coasting, maintaining the status quo or improving only incrementally. It’s holding us back.
Nowhere is this clearer than on R&D. Australia still consistently underperforms OECD averages when it comes to gross R&D spend, and our R&D rates are dropping. In an era where technological advances are more economically valuable than they’ve ever been, we are reducing our capacity to generate them. There’s an important onus on leaders across all areas of the economy to fix that slide.
According to the Global Innovation Index, Australia has recently fallen out of the world’s 20 most innovative economies, coming in at 22nd. At the same time, and in my view not unrelated, Australia is experiencing its weakest economic growth rate since the Global Financial Crisis in 2009, and is forecast to slow at approximately twice the speed of other developed economies – shrinking from a growth rate of 2.8% in 2018 to 2.1% in 2019.
To continue to grow our economy and build the society we want to live in, Australia needs to embrace the notion that taking smart big risks can bring great rewards. In an age where technology is changing everything, we need to do more to understand how we support the growth of a thriving, globally competitive Australian tech sector. And we need to promote and celebrate those founders, investors, companies, board members and governments that continue to reward risk to change the world. By doing so we will encourage the next wave of our bright young minds to not take the safe career route but to reach for the stars and in the process create an even better Australia.