Thursday, October 6, 2011

What's Killing Australian Innovation?

(Post courtesy of Niklas Olsson. Olsson is a study-abroad study at UNSW, hailing from Sweden and bringing The Entrepreneurial Chase to Sydney.  Olsson placed in the CIE's annual PitchFe$t competition, winning tickets to The Festival of Dangerous Ideas.  He has generously contributed this blogpost from his attendance at the "What's Killing Australian Innovation?" session held on October 1 at the Sydney Opera House. 

In addition to his participation as a panellist at this session, the Dean of the Australian School of Business, Professor Alec Cameron, was interviewed on ABC's Saturday Extra radio program: listen, download, or read the transcript here.)

One hour of dangerous ideas; conclusion? It’s all about people

In the auditorium the buzz amongst the spectators was energetic. Innovation is a most current topic amongst Australians especially considering the increasing prosperity of the Australian economy. It was evident that attendees of the sold-out event were curious to find out how innovation, as such a critical part of the economy, would be able to sustain the future.

A varied set of panellists representing the academic, biomedical and IT sectors unanimously stated the number one killer of innovation in Australia is market size.

“There is not as much room for a narrow market,” as Alec Cameron, Dean of the Australian School of Business at UNSW, described it. A niche is often the start of any innovation and to have a set of customers the size to keep an early cash flow going might be the difference of failure and success.

The moderator opened up the floor with asking: “Can Australia breed the next Mark Zuckerberg?” Alan Noble, serial entrepreneur and current Engineering Director at Google Australia, was quick to point out that the factor of distance is essentially gone. In IT and tech Australia has produced several successes such as Google Maps and most recently Atlassian. It has seen and will see a steady growth, it is just a matter of getting the ecosystem right. What’s killing Australian innovation right now is that there are too few Australian successes willing to send the elevator back down, a system that is driving high-calibre Australian people away to America and Silicon Valley.

As they say, a jack-of-all-trades is a master of none. Martin Rogers, CEO at Prima Biomed, further emphasized how specialisation breeds quality and recognition. For example, in the field of biotech Germany has pursued and reached their ambition to be number one in manufacturing. Rogers also answered the question: Is regulation a hinder of innovation? Regulation in biotechnology is essential, providing a safety net and assuring the market need for any new drug. However at the same time it is the reason why Gardasil sells at more than 240 times its manufacturing cost. Ultimately cost has to be carried by the consumer and we have to ask ourselves, is that a trade-off we are willing to make? Government can regulate all prospects of failure but is that a reasonable burden for society?

But what’s really killing innovation in Australia is not market size, scarcity of mentors or even regulations. It is the Australian culture. Failure is not a good thing; in fact it is not even acceptable. I fully agree with Alan Noble, who said, “Failure is a good thing. You cannot truly innovate without taking risks and you cannot take risks without the prospect of failure.” Australia has great human capital and a set of entrepreneurial people that have the ambition, but why would they bother trying if a failure carries such massive social and professional risk? The panellists described it as almost being tainted, and the agility needed to meet today’s complex and ever-changing market needs comes from failing, and failing quickly.

As much as the panellists talked about the Australian context, the discussion very early on failed to set the frame for innovation. Personally, I believe that in the 21st century it is no longer a game of capital gain; too little was discussed around the importance of a three-folded innovation model. Social and environmental gain is as important, and a more multifaceted discussion including innovation in media (Murdoch), information transparency (Assange), and embracing the aboriginal culture could have created a richer conversation.

So can Australia produce the next Zuckerberg? What’s killing that possibility is nothing but ourselves - embrace failure and let that next Zuckerberg try a couple of times before getting it right.

Failure is neither permanent nor fatal; and Australia: “Failure is an event, not a person”.


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1 comment:

  1. So true, I am always questioned when trying my own ways. I know I might not get it right the first time but I am happy to try until I do!