Embracing failure to change Australia: Five things we learned at The Age’s Innovation Summit

As an example, Marshall pointed to a new product called Future Feed which can lessen the impact of emissions from cattle farming

“[Future Feed] can literally eliminate the emissions. Distributed randomly without too much control, it can easily give you between 80 and 90 per cent emissions reduction in cattle, so a seemingly impossible problem solved through science,” he said.

“Suddenly, politics vanishes. It’s no longer a fight. It’s no longer who’s to blame. It’s no longer a wedge. It’s let’s get together and how do we take this innovation to the world.”

Products like Future Feed, and also like plant-based meat substitute V2 foods, are coming out of Australia and taking the likes of Silicon Valley by surprise, Marshall said. But they need ongoing support if the value is to stay in Australia.

“We can do this. Science can create the economic pillar that we need to replace the one that we are likely to lose in the fossils industry,” he said.

“When you dig it up out of the ground, it can eventually run out. But when you create it through innovation, it’s a wellspring that can never run dry.”

Competition among states not a bad thing

At a state level, governments have needed to collaborate closely throughout the pandemic, but also have a new perspective on their own sovereign capabilities and capacities.

“Things like the pandemic particularly, can have you suddenly realise that you’re in a ‘have not’ space. We don’t have this vaccine, we don’t have the ability to make it,” said Monash University’s Professor James Whisstock.

“It’s all about getting the balance right. We want to make sure that we invest in the things that the most people in the country can take advantage of.”

Gabrielle Upton, parliamentary secretary to the NSW premier, said COVID had highlighted the importance of sovereign capability, and how critical research translation and commercialisation is to the economy.

“NSW won’t build capacity in every technology, but we will where there are competitive strengths, and the need for sovereign capacity to create new jobs and our future industries,” she said.

The Victorian government’s lead scientist, Amanda Caples, said all states had collaborated to solve issues during COVID-19 and that spirit would continue. But competition was also an important part of driving the economy, and the two states were competing, for example, in the fields of health and medical research, and mRNA.

“It usually adds to the greater good because that competition, when it’s healthy, leads to increased awareness of the importance of investing in science, technology and innovation,” she said.

“When you look at the way Australia has been able to come together as a consequence of the pandemic, you see everyone’s got different pieces of the puzzle. If we didn’t have that profile, that sense of vision and passion for innovation shared across the nation, then I think we would be poorer for that.”

Our capacity to innovate is enormous

South Australia is the home of the nation’s space agency, which includes securing sovereign defence capabilities for Australia in space.

But Defence SA chief executive Richard Price said there’s a danger in focusing too much on specific products or capabilities to develop because, to put it in defence terms, you don’t want to find yourself preparing for the previous war.

“It’s dangerous to decide the future based on where we are today. To me sovereign capabilities means the ability to do something different, and create an ecosystem of people who can quickly respond, be agile, and transform for what suddenly emerges tomorrow,” he said.

“And that requires investment in many different broad areas of research, but also industrial capability as well. Because what I can tell you is whatever plan we have today, will not be what happens in 20 years time.”

Whisstock pointed to the ongoing European conflict for an example of why an Australian space industry could turn out to be so vital.

“One single individual, Elon Musk, switching on a bunch of his company’s satellites above Ukraine, completely revolutionised the communications capacity of that nation in the context of war,” he said.

“Having the infrastructure not only to get things up there, but also to build the stuff that goes up there — it is a pretty unpleasant environment, space — is really important. Because it’s going to become the competition area of the future.”

For start-ups to shine, structural change is still needed

The pandemic has been particularly disruptive for start-ups, but it may have also deepened the gender gap.

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“Women who were starting companies had to take on the additional burden that the pandemic presented at home,” Rachael Neumann, co-founder of Flying Fox Ventures said.

And that’s just an additional barrier on top of the existing structural issues that keep women from becoming investors and founders.

In Australia only around 3 per cent of investments flow into companies founded by women, while in Victoria, that number is about 12 per cent, she said.

“To be an investor in many of these early stage start-ups, for equity investment under the Corporations Act, you have to qualify as a sophisticated investor. Women are disproportionately penalised to fulfil that obligation if they have career breaks,” Neumann said.

“And we can look at how do we get more women through the educational pathways that are most likely to result in startups, but at a certain point we need childcare. In this country, we have a dearth of childcare at every level.

“We have to get better because all the data shows that with a diverse portfolio, we get better results. With a diverse investment team, we get better results.”

Blackbird Ventures partner Niki Scevak said it was up to every investment company to make sure the people investing the money reflect society.

“There are signs of optimism. If you do it on a dollar basis, you can expect a lot of later stage companies that were starting out 10 years ago, reflecting what the world was like 10 years ago,” he said.

“If you measure the companies just getting started, at seed round funding, it’s a lot healthier.”

Learning to love failure

Aconex founder Leigh Jasper said the business and financial community must grow more comfortable with failure if Australia is to produce more successful start-ups.

“The very best start-ups are going out to do something remarkable, and some will get it wrong.

“Some will have the wrong vision or they will be 10 years too early. That’s fine. They will learn, adjust and some of them will go and start new businesses. I think it’s how we tell that story of failure as part of success,” he said.

“In the US and in Israel, if you had a start-up that failed that’s a massive tick, because you’ve learnt something. In Australia sometimes we see that as a negative, so we need to change that narrative.”

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