"Startups represent a very tiny proportion of the overall opportunity. Not everything is disruptive. Not every business model is disruptive," Tony Surtees told the Tech Leaders Forum in the Blue Mountains last month.
"Technology in Australia is a large, well-developed, existing industry, and when we talk about the development of the tech sector -- whatever that is -- it is way, way bigger than startups."
This was music to my ears.
Surtees knows stuff. Back in the day, he was a vice president at Yahoo. Since then, he's been involved in numerous startups, the latest of which is Zeetings, a cloud-based system for running meetings and interactive presentations that's currently in beta. He clearly shares my frustration with the S word. And the D word.
"I think we have almost a pop culture around the word 'disruptive', and far too many people use that word without any sort of real idea as to what it actually means," Surtees said.
"Fundamentally, if you go into Clayton Christensen's writings about what disruption actually is, you'll find out that for a lot of organisations, it does not apply. But it certainly does apply, for argument's sake, if Australian insurance companies wake up to the fact that Amazon knows more about the behaviour and the predictive future needs and risk tolerance of their customers than they have themselves," Surtees said.
Dr Dean Economou, technology strategist at NICTA, Australia's largest organisation dedicated to IT research, agrees.
"Startups are like heroes, you know. It's very exciting, and you hear [of] people who've after 15 months got a billion dollars in Silicon Valley, and stuff like that," he said. But in the context of Australia's total economy of just over AU$1.5 trillion, that's nothing.
Economou gave an example of a sector that's huge, but "almost invisible": Transport. "Transport is about 15 percent of our economy, one way or the other," he said. That's about AU$250 billion.
"At the moment, it's really not very efficient, and there's a lot of clever IT -- which is maths on computers which are going something like 1.5 billion times faster than they did 15 years [ago] -- which can make trains run 10 percent better, which can make trucks run 20 percent better, which can make ports run 15 percent better. That's 20, 30, 40 billion dollars a year, if you could get that stuff into the economy. You can't see it, you can't measure it that easily in one go. But I'm tellin' you, it's there, and if you applied it, Treasury would see the click in GDP."
BusPlus, a proposed on-demand bus-taxi system for weekend public transport in Canberra, is the kind of thing Economou is thinking about. Based on optimisation software developed at NICTA, BusPlus would reportedly cut the average travel time for a weekend journey from 28 minutes to 18 minutes, for about the same cost as the current bus-only system.
There's obvious potential to license such optimisation software globally, and not just in public transport applications.
There's great possibilities for Australia, but also potential roadblocks.
"Australia has the fourth-largest pool of investible capital in the world. It puts us disproportional larger than just about any other country in our region, and most in the world. It just happens to be called 'superannuation'," Surtees said.
"One of the fundamental problems, I think, is the conservatism of Australian business... People at a board level in the United States, they will tell you that the lack of innovation is their principle risk, whereas in Australia, innovation represents -- still -- an uncertainty and an area of unknown," he said.
"Money will go where the best ideas and the best people are. Sometimes the best people go to where the best offshore wind happens to be... The MaiTai Group always want to go kite surfing, and they'll go where they feel they have a supportive ecosystem, and a comfortable life, which doesn't get in the way of them pursuing their opportunities."
I get the feeling that our politicians aren't the only bunch of scared old white men worrying about an internet full of terrorists, spies, child molesters, copyright infringers, and, it would seem, efficient overseas business competitors with a lot more clue.
According to the latest Digital Evolution Index from The Fletcher School of Law and Diplomacy at Tufts University, Australia simply isn't up there with the rapidly advancing countries like Korea, Hong Kong, Sweden, New Zealand, and, most outstanding of all, Singapore. Indeed, Australia is slowly receding, and is on the edge of stalling out.
I don't know what the solution is. But I do know that we should invest in science and technology, not slash science funding. We probably shouldn't rely on attracting the kind of people who won't let you join their little club unless you know how to kite-surf. And we shouldn't try to copy Silicon Valley.
I've seen Silicon Valley described as a startup factory, but in my eyes, it's more of an ego-driven muck-chucking machine. Chuck enough muck at the wall and, with luck, some of the stuck muck will turn into butterflies. But most won't, and a factory that mostly turns out failures isn't a particularly good factory at all.
We do have a problem, though. "We are competing in a global world, and Australia can't remain isolated," Surtees said -- and that's true no matter what strategy we choose.
Stilgherrian attended Tech Leaders Forum as a guest of Media Connect.