AICC business briefing looks to Israel’s model of incentivising risk to boost Australian innovation
Last week the Australian Israel Chamber of Commerce hosted a major business briefing to discuss the path of innovation culture and investment in Australia. A panel of speakers across business and government deliberated on what has been learnt from startup nations, with a key focus on Israel, the world’s second largest innovation hub.
Sitting on the panel were the Hon. Wyatt Roy, Federal Member for Longman and Assistant Minister for Innovation, Avi Hasson, Chief Scientist of Israel, and Marita Cheng, founder and CEO of 2Mar Robotics. Leading the speakers was Warwick Smith, Senior Managing Director of ANZ Bank, who himself is an advisory council member of the Australian Israel Chamber of Commerce.
The main topic of discussion was how Australia can become a major global competitor in technology and innovation, with Wyatt Roy, dubbed “the human disruptor” on the day, saying that the new innovation statement will be a total game changer for the industry and a total shock for driving innovation.
“Watch this space, things are going to happen,” urged Roy.
The eagerly anticipated innovation statement will be announced before Christmas, and will drive collaboration with R&D, education and government.
A recent travel to Israel provided Roy with a closer look at the tech and startup space in a country that has many similar characteristics to our own. Roy saw that there is an alignment with both cultures, which provides Australia with basis for reforms and education. Both countries have small populations, both are melting pots and migrant nations. There is a great deal that Australia can learn from Israel’s business culture, a culture that has a solid relationship with their private sector, a major driving force behind R&D investment, Roy said.
Hasson said that there is no better investment that can be made than in R&D and innovation, with Roy agreeing that Australia needs greater private sector involvement and that the government should act as an enabler for that investment.
“If you look at Israel they have one of the highest investments of R&D on a per capita basis, but one of the lowest rates of government investment. When they’re using taxpayers’ money they’re using it in partnership with the private sector and acting as an enabler, which is a very effective model,” said Roy.
A significant difference between Australia and Israel is the approach to risk and the attitude towards failure. Israel’s government promotes the idea of risk as a good thing, and failure is okay. Hasson believes Australia has a problem when it comes to its attitude to risk – we can’t handle risk, but we can handle reward. This mentality must be changed, Hasson said, and Australian’s should expect the support from the government to enact upon this.
Roy views this change as a perpetual challenge, with no end point. He believes that it is important to develop something uniquely Australian by tweaking policy settings to be ahead of the global pack. To be a key player in the innovation game it is crucial that we assess the government’s role in developing innovation, re-evaluate tax and migrant settings, and incentivise investors to back Australian ventures.
To be globally competitive there needs to be a change in Australia’s tax and bankruptcy laws. Roy revealed that the government has carefully taken into consideration Chapter 11 bankruptcy laws. He said there will be some surprising changes and people will clearly see things that have been policies adopted or taken from a number of innovation hubs globally.
“There are tax incentives for people to be investing into an Australian innovation, something that people might perceive as being more risky, but in many cases will have a big return. If we’re using the policy levers of tax to help incentivise that, we will help change culture around risk and failure,” said Roy.
“There are tax elements that are specific to innovation that we have managed to pull out of the tax white paper and bring forward for this statement.”
While looking firmly at what the government can do to incentivise and encourage risk, it is also important to look at what can be done on an educational level. Marita Cheng, technology advocate for women, believes that it is necessary to teach kids to think and create big.
Cheng believes that teachers need to promote innovation and teach kids that whatever they can imagine in their heads, they can create in real life.
Similarly, Roy believes that celebrating success will inspire the next generation to become entrepreneurs and change the world for the better.
“We have a big microphone we can talk from as a government. But also on the policy front there are a number of things we need to do to help develop STEM, digital tech and entrepreneurial skill sets with young Australians,” said Roy.
And now we wait for the innovation statement.
Image: Wyatt Roy, Source: Supplied