Australia boasts a largely unblemished economic track record. It’s gearing up to be one of the longest uninterrupted periods of economic growth of any country. According to Forbes, we have the 13th highest global economy with the 9th highest per capita income. But underneath it all, a set of challenges are brewing.
Australia has a strong economy, so where’s all the innovation?
We often think of ourselves as an export-based economy, and on a simple level, we are. However, a glance at our Australia’s GDP and export ranking makes it clear that there’s still a way to go before punching our weight in exports – let alone above our weight like a modern, competitive and globalised economy should. Australia’s export of goods and services sits at just 18.6% of its current GDP, in comparison to 42.6% of the European Union and 27.9% of the UK.
To that end, Australia’s economy is doing well. For the fourth year in a row, the number of new businesses entering the Australian market has increased to 15.5% in 2017, compared to 14.6% in 2016. However, benefits of this growth is conditional to exits from the economy, which has increased 0.5% between 2016 to 2017. In particular, agriculture has suffered while sectors like transport (owing to our friends at Uber) are on the rise, says the ABS.
When comparing the top 20 companies between the US and Australia – America has Apple, Google, Microsoft and Facebook just to name a few – Australia has just one that somewhat resembles a company fit for purpose in a globalised economy. CSL, a biotechnology company that researches, develops, manufactures and markets products to treat and prevent serious human medical conditions, comes in at number 8 on Australia’s Top 20. It’s clear there’s plenty of room for innovation and advance in Australia’s business sphere.
And where’s all the money and jobs?
In an era of undeniable globalisation, one resolute trend is the world’s growing inequality. Between 1984 and 2004, 98% of the developed world saw a rise in income, whereas since 2005, 70% of households in the developed world saw no rise in real terms.
For the first time since World War II, children will on average be poorer than their parents. This is partly due to the difficulty young people face in securing graduate jobs, says FYA’s New Work Order report.
Believe it or not, across the developed world, jobs are disappearing. Graduates and job seekers are losing out to automation and offshore sources, and the rate of the new job market and wealth creation is stagnating. This also seems to be in line with the emerging global trend of destructive popularist politics we’re seeing.
The digital revolution has only just begun
We live in a remarkably digitally-connected world. As of 2017, there were 4 billion global internet users, making up 46% of the population. This is expected to rise to 58% by 2022 as the technology revolution continues to soar and re-shape the landscape of global communication and business potential.
It’s a kind of revolution that we’ve never seen before. Despite how significant these numbers seem, it disguises the early stage of development in which the digital age still sits.
The internet went live less than 30 years ago, in 1991. Think of the world three decades after the launch of other technological advancements like the printing press, mass-produced cars or air travel. The first 30 years saw a huge amount of change in people’s lives, but it’s the next 100 years that saw a seismic shift in human progress built on top of that innovation.
Given the rate of the current digital revolution, what is yet to come will fundamentally change the way we live and work. Today, inventions like pill boxes transmitting messages to carers of the elderly when they forget to take their medicine, or lens free cameras installed in your glasses are realities. But much of what we and future generations will witness over the next century is beyond what we can currently fathom.
Disrupt or be disrupted
This age of uncertainty, modernisation and immense globalisation poses an enormous opportunity. Among all the problems the current global landscape faces is the potential for thinkers to find solutions to counteract negative trends. It’s these innovators, entrepreneurs and curious talents that have a big job ahead of them: to shape a new kind of future.
Fear of failure can be paralysing to a growing entrepreneurial culture. Beyond simply creating value, we need to create a culture which facilitates creators and makers with visions for solving pressing challenges to transform those aspirations into tangible results. Whether it’s agriculture, B2B, biotech, social impact, education or technology, those with big ideas and the ambition to take action on them need a platform to stand on. In our ‘disrupt or be disrupted’ world, we need to change our mindsets to see failure as just success in progress, not an end-point.
We cannot afford to rely on people stumbling around in the dark by themselves solving problems that might not exist and can’t scale. Deloitte research shows that despite high-profile success stories, just 4.8% of Australian startups become profitable; in Silicon Valley, only 8% of startups become profitable. Regardless of the figures, it’s the agitation of industry and the interest in innovation that we need to pay attention to. Even the simplest of ideas can be disguised as hugely successful problem-solvers.
The world needs a new breed of entrepreneur
While it takes an innate sense of drive and risk-appetite to start a business, you need a strong grip on fundamental business, finance and design thinking tools to grow a business. These are a teachable set of skills. We need to inject our high-potential talent – who have the qualities you can’t teach – with the skills you can teach.
Whatever opportunities you want to pursue, whatever your starting point, whether it’s for profit, purpose or social impact, there’s an entrepreneurial pursuit to be followed. It’s from ambitious ideas like these that a new breed of entrepreneur is born: people who are highly-skilled, highly-connected and equipped with the toolkits to turn ideas into transformational enterprises.
It’s not enough to just start, Australia needs startups that thrive. The only road that leads to this future is one that joins thinkers and innovators with the education, tools and networks required to take their short-term ideas to long-term success. Australian universities and innovation incubators are out there, making strides towards taking the culture and attitudes of the startup community from fear of failure to scoping out the next big thing.
Ask any seasoned entrepreneur their tips and they’ll share their list of ‘things I wish I’d known before I started’. Instead of fumbling our way through alone, we need to fast track that knowledge and drive it straight into the hands of people with entrepreneurial grit.
Let’s make sure our home-grown entrepreneurs spend more time building the next big thing and creating opportunities, wealth and jobs for the next generation.
Wade Institute of Entrepreneurship is a leading centre for entrepreneurial education. We deliver programs to accelerate learning, creation and connection.