Top 4 Reasons Preventing Business Innovation in Australia
Australia is one of the most developed counties in the world that enjoys one of the world’s best economies. The consistent economic growth in Australia makes it world’s second richest country which is just behind Switzerland. An important reason for Australia to achieve and maintain its economic growth is by adopting mixed market economy. Though the country is enjoying one of the best economies by adopting a well thought-out plan, but it is quite reluctant to take alternative measures that would boost its economy further.
The most prominent example is the business sector in Australia. As compared to several other developed countries that are constantly taking measures for introducing changes in their business models, Australia hasn’t shown interest in this way. The country is following the old business model since past several years and is reluctant to take revolutionary steps in bringing innovation to its business strategy.
Today, whether you are trying to create a company in highly developed country like USA or are planning to start a firm in a developing economy similar to Dubai business setup, you will find new and interesting business techniques adopted by them. But that’s not the case in Australia.
If you want to find the causes behind the slow adoption of business innovation in Australia, these 4 major reasons will provide an insight of the problem.
Less Importance in Educational Institutes:
Australian schools and higher institutes are known for producing large number of research papers on the subjects related toscience & technology, mathematics and engineering. But it seems business is not their priority at all. Australia is far behind countries like USA, the UK and South Korea that have introduced entrepreneurship in their schools.
But this culture could not be developed in Australia. Such type of education expose young people to business cultures that is instrumental in the adoption of innovation in the field.It is because fresh minds are eager to do something new and bring changes in the society.
The slow approach of Australia to introduce entrepreneurship in schools is due to unawareness of the country to see business as a driving force behind economic growth. The experts say that technology startups can add $100 billion in Australia’s GDP by 2033. But it needs 20 times the number of entrepreneurs that the country currently has.
The only way that Australia can achieve this target is by giving importance to business education in schools and providing a business-friendly environment. The problem is that Australia is critically lacking both these factors.
The problem is not limited to schools, but even Australian universities are not much eager in giving importance to business-related subjects. Most of the universities started offering entrepreneur subjects in recent years and they are also lacking experienced professionals. These universitiesare now trying to provide quality business education to students after increase in thedemand.
But as they started the whole process late, so they will take time to come close to the level of countries that are already providing good business-related education. Currently, they are far behind countries like Korea, Germany and the UK that have collaborating business with higher education. This is a major hindrance in the adoption of business innovation in Australia.
Afraid to Take Risk:
A general attitude of entrepreneurs in Australian is that they avoid taking unnecessary risks and like to remain on safer side. It is especially important as their fiscal growth is going smoothly and they don’t consider it necessary and wise to experiment new techniques and make decisions that may pose a risk to their continuous growth.
Therefore, they avoid experimenting with new techniques as their old and reliable business methods are quite beneficial for them. They want to play safe without taking undue risks associated with innovation in business. It is the reason that less than 20% Australian firms operate in international markets.
Due to this, the Australian entrepreneurs are behind entrepreneurs of USA, the UK and other major business locations. The reason is the difference in attitude in USA as compared to that in Australia. Entrepreneurs in USA think that failure is part of their business journey and the success that comes after failure is the real success. They are not afraid of the initial setbacks that they may face in adopting new business techniques and methods. This positive attitude, where they are ready to take risks,has been proved helpful for them to achieve new heights.
Australia can only expect to achieve business innovation after replacing its current attitude with a new approach of adopting global business ideas. But it will take some time to replace decades’ old tradition with a more aggressive one.
Less Support from Government:
The arrival of any new idea and product in any country demands encouragement and assistance from government. But it seems the Australian government is not ready to give business its due importance. Australian economy primarily depends on sectors like services, construction and mining. These sectors provide less business activities and the focus of government is more on these major sectors of economy.
But there are reports that business sector can contribute billions of dollars in the Australian economy in the coming years and it merely requires adoption of innovation in business strategy. This can be done with the introduction and spread of global business ideas, which is only possible with the support of government. Currently, the Australian government provides far less funds to both SMEs and large businesses as compared to countries like South Korea, Finland and Germany.
The Australian government can change this approach with investment in well-structured programs like business hubs and incubators. Currently, the Australian government is providing some tax incentives to entrepreneurs. But direct government funding to the sector is very low and the benefits of this policy will take some time to deliver.
Non Supportive to Big Business:
Another important reason that Australia is not supporting business innovation is due to their negative imagination of big businesses. You can’t expect innovation from small and medium sized businesses as it is difficult for them to take big risks. By taking innovative steps, the entrepreneur is in fact taking risk and this attitude is only possible for big businesses. It is because these firms have enough additional capital and they can afford a single or two bad experiences with new business techniques.
But due to less support of big businesses from Australian government and corporate sector, it is unlikely that major steps can be taken in this regard.
Brenda Cagara is a part of the business consultant team RIZ & MONA in Dubai. Her work is to assist the formation of companies and help setting up business firms. Other services she takes a part in are visa processing, trade license, trade mark, bank account opening, product registration and local sponsors. Along with this, she vigilantly manages to pursue her writing career. Since the past five years, she has been writing on different niches. The top ones are business, taxation and finance.