Robyn Denholm, the Australian businesswoman who’s now global chair of Elon Musk’s tech company Tesla, wants everyone in her homeland to embrace risk and is worried the nearly three decades of uninterrupted economic growth has made people complacent.
Denholm (pictured above), who grew up in the western Sydney suburb of Milperra and rose to become Telstra’s CFO and Head of Strategy before leaving for the Tesla role, raised her concerns in the forward to the StartupAus Crossroads 2019 report, released today.
The annual snapshot of the country’s startup ecosystem found that while later stage startups were thriving, creating around 4,500 jobs last year, investors were backing those lower risk, high growth companies as investment in early stage startups continued a three-year decline.
Musk’s Tesla is one of the world’s most innovative and risk-taking companies, from electric vehicles to batteries and reusable rockets. Denholm has been on the board since 2014 and replaced Musk as chair last year. She’s worked closely with two other tech founders, Scott McNealy at Sun Microsystems, and Pradeep Sindhu at Juniper Networks to understand risk and innovation.
In her forward, Denholm said the was broad support in the US for taking “monumental risks” to solve the world’s problems
“Risk taking is fundamental to a vibrant startup community and by definition an innovative and growing economy, but it is not fully ingrained in the Australian mentality. Yet,” she said.
“Maybe it is that we have become complacent as a result of 25 years of unprecedented uninterrupted economic growth! It’s not the Australian way that I remember from my childhood, where ‘having a go’ not just on the sporting field but in starting your own business was more the norm.”
Australia and its startup sector have “much to be optimistic about”, she says, having made significant strides over the past decade.
“We have a phenomenal education system, we have made significant inroads in having ready capital for new ventures, and we have some great role model entrepreneurs who have given future generations home grown icons to aspire to be. However, there’s one thing holding us back: our appetite for risk,” she said
“In order to take Australia to the next level in a global digital economy, we need to see corporations, investors, board members and governments embracing risk. That means investing in long-term R&D, partnering with innovative young companies, and becoming swift adopters of technology. Too many are coasting, maintaining the status quo or improving only incrementally. It’s holding us back.”
Denholm points to R&D as a key issue, calling on political and business leaders to act.
“Australia still consistently underperforms OECD averages when it comes to gross R&D spend, and our R&D rates are dropping. In an era where technological advances are more economically valuable than they’ve ever been, we are reducing our capacity to generate them. There’s an important onus on leaders across all areas of the economy to fix that slide,” she said.
“According to the Global Innovation Index, Australia has recently fallen out of the world’s 20 most innovative economies, coming in at 22nd.”
The fact that Australia is now experiencing its weakest economic growth rate since the Global Financial Crisis, is ” in my view not unrelated”, Denholm argues.
“To continue to grow our economy and build the society we want to live in, Australia needs to embrace the notion that taking smart big risks can bring great rewards. In an age where technology is changing everything, we need to do more to understand how we support the growth of a thriving, globally competitive Australian tech sector,” she said.
“And we need to promote and celebrate those founders, investors, companies, board members and governments that continue to reward risk to change the world. By doing so we will encourage the next wave of our bright young minds to not take the safe career route but to reach for the stars and in the process create an even better Australia.”
You can download and read the full StartupAus Crossroads 2019 report here.