Australia's pragmatic culture not aligned with innovation: Liberal MP

The biggest issue Australia faces when it comes to innovation is the need to shift our business culture from a pragmatic approach to one that better embraces risk, according to David Coleman MP.

Whilst addressing the House of Representatives on Monday, the member for Banks praised the importance of startups in driving innovation in the Australian economy, but said the best way to describe the nation's business culture is pragmatic, and such a methodical approach is not generally associated with great entrepreneurship.

"Startups have always been essential to economic success, but they are more essential now than ever before," Coleman said.

"Sometimes startups need to embrace radical or seemingly over-the-top goals in order to crash through the existing orthodoxy.

"We need to develop a culture where it is okay to say: 'We are going to be the best software company in the world', because if you cannot say it out loud you are unlikely to pursue it as a goal."

According to Coleman, there are several reasons why breakthroughs that create new industries are sprouting from startups as opposed to big, already successful incumbents.

He said such a disruptive change is usually negative for incumbents even if they succeed in embracing it.

"The disruptive world of tomorrow usually looks worse for incumbents than the more certain world of today, so it can be hard to marshall enthusiasm for a process that is likely to lead to a worse overall outcome," he said.

"When cars were introduced, the winners were startups, not horse-and-buggy manufacturers; candle makers did not create the electricity industry; and railroad companies did not create the aviation industry."

Coleman believes the geographical constraints of Australia are less significant than they were previously. He said it is now a historic notion that Australia is not the most logical place on the planet to launch a global business from.

Shadow Parliamentary Secretary assisting with digital innovation and startups, Ed Husic, agreed with the Liberal party member, adding he believes the discussion on the value of startups to Australia and the economy is long overdue.

"In this place, politicians tend to think that they change the world one page of Hansard at a time when in actual fact a lot of these entrepreneurs are changing the world one app at a time," Husic said. "We need to work out how we get more of them and it is critical."

According to Husic, it is essential to recognise the role of startups and champion their economic and employment potential. Husic said there are a stack of companies that have emerged in the Australian environment that are doing tremendous things both here and overseas that should be recognised.

"We have a lot to be proud about when you look at all the startups in this country that have achieved on a global scale, not just on a local scale," Husic said.

"I think of Campaign Monitor, Ingogo, Invoice2go, Nitro, Carsales.com.au, Seek, Atlassian, and I think of Freelancer to name a few. We also have Catch of the Day, REA Group, and 99designs.

"The reason I list them here is because they should be recognised on the floor of parliament and thanked for their contributions."

It has been a topic discussed at length by his leader Bill Shorten, but Husic highlighted again the need to teach coding in schools, and focus on education in the science, technology, engineering, and maths (STEM) sectors.

Shorten has previously pledged a total of AU$2.5 billion for what the Labor Party calls the jobs of the future initiative, as well as a AU$17.8 million startup initiative he hopes will drive a new generation of innovators, risk-takers, and wealth-creators.

Coleman also said technical skills in the country need to be further developed so that Australia can transition into a nation of technology creators, rather than merely technology consumers.

"We want our brightest kids thinking about software, engineering, and IT more generally. It is noteworthy that, although there has been a strong demand for these skills in the workplace for some years, the local education system has not produced enough sufficiently skilled employees to meet all these needs," Coleman said.

"This suggests that there has been some market failure in this area and that government should take a long view in implementing policies to encourage greater take-up of these courses."

According to Nicky Ringland, co-founder of Australian startup Grok Learning, a solid STEM understanding is vital whether it comes to fighting climate change, making the next blockbuster movie, or unlocking the secrets of the universe.

"Australia is facing a massive skills shortage," she said at the SydStart 2015 conference last month. "There will be 100,000 new jobs created in the technology industry over the next decade, but fewer than half that number of students will graduate from technology degrees.

"The future of Australia will need to be agile, innovative, and creative but if we can't source and support the local talent there's no way we can achieve this."

Ringland said fewer students are learning computer science at universities than they were 20 years ago.

"When you look at schools it's even worse," she said. "The number of students studying computer related subjects in the HSC in New South Wales alone is plummeting.

"Every single Australian student was previously given a laptop, but not a single programming language was actually installed on those laptops," Ringland said. "That just seems like a pretty nonsensical idea."