None of the Americans in the top 10 of the global Bloomberg Billionaires Index have inherited their wealth from family or royal lineage, these fortunes have been built from the ground up. The list includes: Jeff Bezos (founder of Amazon), Bill Gates (Microsoft), Mark Zuckerberg (Facebook), Warren Buffet (Berkshire Hathaway), Larry Page and Sergey Brin (Google) and Larry Ellison (Oracle). Except for Warren Buffett, these fortunes have all been made in new technology businesses.
Herein lies a challenging comparison with Australia.
Australia’s wealthiest people are mostly mining magnates or property developers. These sectors account for the following members in our richest top 10: Gina Rinehart, Andrew Forrest, Clive Palmer, Harry Triguboff, Hui Wing Mau, Frank Lowy and Kerry Stokes (mining, property and media).
Anthony Pratt has successfully grown Visy Industries into a global paper and packaging behemoth, leading its expansion into the US.
This leaves the founders of Atlassian, Mike Cannon-Brookes and Scott Farquhar, as the only two people in the top 10 rich Australians who have built a business from the ground up in the technology sector.
It is a similar story with Australia’s leading companies. The likes of BHP, Commonwealth Bank, and Woolworths have been around since 1885, 1912 and 1924 respectively.
Which begs the question, how is it that America can create a multitude of global businesses from a standing start in a single generation and Australia has not?
In the last 15 years there have been more than 60 reports on Australia’s national innovation system. They all broadly reach the same finding: Australia suffers from a failure to turn high levels of public research into commercial outcomes, low levels of business research and development, lacks specialist business services and finance supports, and limited connections into global supply chains to scale new businesses with global potential.
To these systematic issues can be added an important cultural dimension. The US has a business culture that prizes entrepreneurship, risk-taking, innovation and individual success.
Australia has enjoyed complacent prosperity, we have done very well by exploiting our natural resource endowments and decade after decade of high population growth driving property and building development.
But without the creation of home-grown global businesses in the industries of the future Australia risks becoming a corporate vassal state. The branch office for international corporations. With decisions affecting our prosperity made by foreigners living far from our shores.
There is a sharp edge to the US political economy in the form of income inequality and a lack of social welfare support that thankfully does not exist in Australia.
But the Australian governments can do more to improve incentive structures to encourage entrepreneurial activity and investment in R&D as well as foster better linkages in the economy (particularly between business and universities and helping access global supply chains).
But more importantly, Australian business and entrepreneurs can do more. Business needs more fire in the belly, with a stronger grassroots culture of entrepreneurship and risk-taking.
We need to foster a supportive culture and environment for start-up businesses with global ambitions, particularly those in emerging industries and technology sectors.
To be sure, there are plenty of positive signs. A new generation of business success stories – such as Atlassian, AfterPay, REA Group, Carsales.com.au, SEEK and ZipCo – show what is possible.
CSL may be a 100-year-old company but its rise to world-leading biotech business is quite recent. CSL is a case study in what can be achieved through research collaboration between business and Australian universities.
Another positive sign is that the current generation of university graduates and new workforce entrants are more inclined to start up new businesses and pursue technology-related ventures.
Australia’s universities are also doing more to promote entrepreneurship programs and support for start-ups along with other critical service providers the ecosystems from which innovation and new technology business can emerge.
Who knows, perhaps COVID-19 might be the catalyst for the great leap forward. To reset our business culture, investment environment and thinking, so that Australian entrepreneurs can think big and take risks on the same scale as Elon Musk.
Nicholas Reece is a principal fellow at the Melbourne School of Government at the University of Melbourne.
Nicholas Reece is a principal fellow at the University of Melbourne and a councillor at the City of Melbourne.