Published on the 17/11/2015 | Written by Beverley Head
By embracing digital technologies Australian organisations could add $A34.5 billion to the nation’s GDP by 2020, if the country lifts its innovation game…
An Accenture-G20 Young Entrepreneurs Alliance report suggests that despite this lure, the nation is still middling compared to peers in terms of its embrace of all things digital and access to the venture capital needed to support entrepreneurs.
Australia, it claims, currently ranks eighth out of 17 leading economies in the rate of adopting digital technologies – while in 2013 just $A111.4 million was invested by venture capitalists – the lowest level in 11 years.
According to the report the startup system is lagging because of the lack of emphasis on entrepreneurial talent and a lack of university engagement. The nation’s challenge with entrepreneurialism was also identified in a recently released report from the Chief Scientist Professor Ian Chubb.
Boosting High Impact Entrepreneurship in Australia, noted that while the country has one of the highest business creation rates in the world, very few scale. “Australia has been slow to embrace entrepreneurship as a driver of economic growth,” according to the report.
The Accenture report picks up on criticism of the Australian Government for failing to distinguish between small businesses and startups. When the former treasurer Joe Hockey introduced a tax break for small businesses earlier this year, he indicated that they were the growth engine for Australia – where in fact many small businesses are conceived and maintained as small businesses – rather than startups with ambition to scale.
David Mann, managing director of Accenture Strategy, said that large enterprises and genuine startups needed to work together more effectively to allow established businesses to leverage innovative thought and practices, and smaller companies to benefit from mentoring by mature business people.
The report is based on analysis and interviews conducted before the September change of Government in Australia, since when there has been a marked increase in optimism among the digerati Mann acknowledged.
Nevertheless the report defines innovation’s ground zero for Australia, and measures the extent of the challenge. For example it cites the 2014 Australian Innovation System report from the Office of the Chief Economist which identified Australia as a mediocre innovator compared to other OECD countries.
Noting that investment in intangibles, including R&D, patents and trademarks, can be viewed as a proxy for innovation, the report states that Australia’s ratio of investment in intangibles compared to tangibles is 42 percent, compared to an OECD average of 82 percent, and the US’s stellar ratio of 200 percent.
The report advocates much more innovation, and a move toward more collaborative innovation where risks and rewards are shared between participants in an innovation ecosystem.
“Ecosystem innovation differs from today’s form of collaboration between large and small companies that generally take place in the controlled environment of the larger companies and on their terms,” according to the report. That according to Accenture, will not deliver the quantum of innovation that will be required for Australia to be globally competitive.
According to Mann there is still the opportunity for Australia to catch up as “Being first through the door is an advantage but not essential,” adding that there was not a “huge gap” between Australia and the rest of the world.
