Oz startups need Silicon Valley culture

Entrepreneurs in Australia are not seeing the country as startup-friendly with only 29 per cent saying “cultural support” is available.

A new report from the World Economic Forum (WEF) scored Australia the lowest for “cultural support”, which includes risk tolerance, successful role models, innovation and so on.

Vivek Sood, managing director of Global Supply Chain Group, said Australia lacked a Silicon Valley culture: “Even today Aussies who have an innovative streak prefer to go overseas to Silicon Valley type of eco-spheres that bring out the best in them.” 

Mr Sood, who started his business in Sydney 14 years ago, said although innovation was clear at policy making level, allocated funding had not yielded desirable results due to misapplications or what he described as a bureaucratic nightmare.

The WEF found that as part of the “cultural support” component, Australia’s tolerance for risk and failure was rated particularly low, even though all Australia/New Zealand respondents considered it an important factor to startups’ growth.

Professor Ron Johnston, Executive Director of the Australian Centre for Innovation (ACIIC) recognised that risk management techniques were reasonably well developed; and that the application of risk management techniques in government departments usually led them to avoiding risks.

“It is not so much [about] risk management techniques, it is attitude towards risks,” he said.

Only 50 per cent of respondents in the WEF study thought Australia had an available research culture, while the local Freelancer.com said the country lacked graduates in the fields of science, technology, engineering and mathematics.

Professor Johnston said: “Australia’s production of scientists and engineers is proportionate to its population, of course while way behind the US and now China.”

The WEF asked startup businesses to rank countries on eight factors with Australia scoring an overall ranking of 53 per cent, well behind countries such as the US, UK, Switzerland and Singapore.

Mr Sood said more should be done: “All I ask is that startups should get fair hearing in the board rooms when they rock up to present their offerings in competition with the established players.”