Cultural change that enables a better understanding and acceptance of strategic risk in Australia among everyone from board directors to employees, students, researchers and policymakers remains an elusive key to driving new value across the economy, according to Tesla global Chair Robyn Denholm.
It’s a familiar theme for Australia over the past couple of decades, although Ms Denholm does not restrict this call to embrace risk to business leaders or entrepreneurs. The nature of risk must be better understood by all Australians in order to underpin national effort.
“Over the last decade we have made significant strides in fundamental ingredients necessary to enable innovative startups to be born and thrive,” Ms Denholm says in the foreword to the StartupAUS Crossroads 2020 report.
“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,” she said.
“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.”
Risk-taking is fundamental to both creating a vibrant startup community and sustaining an innovative and growing economy, Ms Denholm says, “but it is not fully ingrained in the Australian mentality.”
This aversion to risk is best illustrated by the Australia’s research and development spending, which has consistently underperformed our OECD peers (and dramatically under-performed the OECD R&D investment leaders.) These are the are the numbers that tell the tale.
“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,” she said.
Ms Denholm has been on the board of tech giant Tesla since 2014, and more recently chair after spending 20 years in the San Francisco bay area building a career in the technology sector.
The fact that Australia has fallen out of the top 20 countries ranked on the Global Innovation Index (now 22nd) at the same time that the economy is experiencing its weakest growth since the global financial crisis in 2009.
In Ms Denholm’s view the two are related. More alarming is that the economy is forecast to slow down at twice the rate of other developed economies.
“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,” she said.
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.”