RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
 |  Subject: OZschwitz: The Conservative Anti-Entrepreneurial Country  Tue Jun 07, 2011 3:26 am | |
| Our conservative investment culture means short shrift for bold entrepreneurs.
The Economist ran a special issue on Australia last week that challenged us to ask what kind of industrial base we want to have. It is common to assume that Australia's best resources lie underground, but that view may be too superficial.
In ''The next Golden State'', The Economist presented us as a country flush with money, education, democracy and adventure. But where are we heading? Our present political leaders don't give much away in that regard, but one template The Economist offered us was California.
California is not America's most solvent state, so we have to be careful about making it our role model. But in the postwar era it has gone from a place with potential to a place with realised assets, including the world's most enviable high-tech cluster.
Silicon Valley feeds capital to ideas that dare to refashion the way we live and do business. Its recipe for success is complex - strong skilled immigration, good universities, talented businessmen, lots of money - but these are many of the ingredients that Australia already has. How can we mix them together to secure our own prosperous future?
This is not the first time we have asked ourselves this question, but perplexing blockages persist. To start with, Australia has one of the largest fund-management industries in the world thanks to compulsory superannuation introduced in the 1990s. Yet, relatively speaking, we also have one of the world's smallest pools of venture capital.
Venture capital is the money that chases big ideas, but what little money Australians dedicate to this cause tends to drift overseas. Instead of investing in the next Australian-made Facebook or Google, we tend to invest in treasury bonds, stocks and houses.
In America, this kind of risk aversion was overcome by pioneering individuals who risked their fortunes in support of the country's nascent high-tech industry - and won.
University endowments also made a difference. Among the biggest private-equity investors in US technology companies are Harvard, Yale and Stanford.
The US military was also a key player. In Australia, our risk-averse financial culture might be tackled if tax incentives and matching funds were better used to direct our funds under management towards more entrepreneurial ventures. As it is, much of Australian finance seems to pursue things that are tricky rather than genuinely novel.
Australians are not short of good ideas. We just fail to tell the stories of our most successful entrepreneurs. I'm not referring to media moguls or mining magnates, but people who create something from nothing. In the current edition of The Monthly, I narrate one of our most compelling biographies. It is the story of one of Australia's richest men, Shi Zhengrong - a clean-technology billionaire - whose story is almost entirely unknown in this country. Shi is already transforming the face of the world's energy sector, and yet his success seems a million miles away from what is happening Canberra.
In a way, this was the trouble with Barry Jones's invocation of the ''clever country'' more than two decades ago. Jones was right to draw our attention to Australia's brains economy, but he did too little to shine the light on those brains marching spectacularly forward.
When I spoke recently to Warren Hogarth, an Australian and a venture capitalist in Silicon Valley, he told me of cocktail parties in the valley brimming with Australian ideas. Ambitious Aussies are flying around the globe - from Melbourne to London to Palo Alto, California - weaving a formidable web of experience and relationships. Their efforts put Australia on the world's stage, but do they need to travel to these far-flung places to realise their dreams?
We need to pay more attention to our entrepreneurs. In one of the funniest moments in Chris Lilley's television series We Can Be Heroes, Lilley portrays a young Chinese PhD student specialising in solar energy at the University of Melbourne called Ricky Wong. Ricky is the son of conservative Chinese parents, has a secret passion to be a sitcom actor, and has been short-listed as a candidate for Australian of the Year. As Ricky fronts the camera with his lab coat and goggles, he shares one of his favourite jokes. ''One time I say, 'Wow, I running on 50 per cent efficiency.' But really I doing only 20 per cent which is still very good but at the time everybody believe me.''
Lilley's show is funny because it portrays candidates ludicrously unqualified to be Australian of the Year. There is a former policeman who claims credit for saving children on an unsecured jumping castle and a lady who plans to roll across Australia. But Australia has a real Ricky Wong. Shi Zhengrong is changing the solar industry and investing the dividends in this country, one business venture and one research institute at a time. Yet we put him in the same category of unlikelihood for Australian of the Year as a woman who rolls across Australia.
We must do more to celebrate the success of genuine entrepreneurs and bring attention to their novel ideas. Their stories will inspire our own generation as well as the next to be ambitious in how we shape our economy. As The Economist advises us: ''First, however, Aussies need a bit more self-belief''.
ANCAPS: ANARCHO-CAPITALISTS |
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