Thursday, October 13, 2011

Fear of failure or failure to start?

There have been recent critiques about What's Killing Australian Innovation (see our commentary on a recent talk by ASB Dean Alec Cameron, and related ABC radio interview). At this week's TiECon Australia, TiE Sydney chapter president Dilip Rao commented that Australia is ranked 18th globally for having a 'fear of failure' (first being worst). Based on the GEM Global Report 2010, Australia actually shows up worse, ranked 16th out of 59 countries.While that sounds quite bad, the spread of the scores shows that Australia is nonetheless close to the average, and not that much different to, say, Germany (see figure below). The classic benchmark is the US, which is ranked 47, and still not close to being statistically significantly away from average (assuming a normal distribution).

Fear of Failure: Percentage of 18–64 age group with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business

Wait a second, but what's this other variable, called "Entrepreneurial Intention"? Well, it's defined as the "percentage of 18–64 age group (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years" (p. 63 in the 2010 GEM report). Australia ranks poorly on this one as well (39/59) if you take the rankings at face value. Interestingly, the US ranks even lower than Australia here (44/59).

What the heck is going on?

My best guess, is that in some countries, entrepreneurship is not a choice, but a way of life. Almost everyone there has to hustle and bustle to feed their family. Meanwhile in the "Innovation-Driven Economies" it's an optional career choice. So, focusing on the latter, what do we see?

Well, Australia ranks 6/23 on the fear of failure measure, but still very close to average for the group (US ranks 20/23 in this group). Australia also ranks 7/23 on the entrepreneurial intention measure, again still very close to average for the group (US ranks 11 in this group, worse than Australia!).

=> Claims that Australia has a fear of failure are NOT supported by THIS data

So, what IS killing Australian Innovation? Come join the debate at the next Meet the Entrepreneur to find out!

Meet the Entrepreneur is our semi-annual speaker series which is co-sponsored and hosted by Ernst & Young at their Sydney CBD office. This professional networking event features a moderated panel discussion between industry experts on a chosen topic.  After the discussion, a Q&A session winds up the formal part of the evening. Hosted networking occurs both before and after the discussion.
This event's theme will be State of Play - What are the myths and realities about the VC industry in Australia, how does it compare to the rest of the world, and does the quality of entrepreneurship and innovation in Australia "stack up"? 
Does Australia have enough critical mass to be a world leader in innovation? Are we creative enough, do we have a big enough appetite for risk, or are we just gamblers? Come hear our panel of venture capitalists, innovators, and entrepreneurs discuss this topic guided by the expert moderation of noted journalist Valerie Khoo.

Yours truly,
The Centre for Innovation & Entrepreneurship

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