Creative country: We need stability that spawned Silicon Valley

Only stable government policy that gives certainty will help foster a more creative and innovative economy.

Lisa Harvey Smith has called for stronger links between universities and industry. Picture: Aaron Francis

Only stable government policy that gives certainty to entrepreneurs, businesses and investors will help foster a more creative and innovative economy where people are encouraged to take risks to create more wealth for the nation, Australian National University vice-chancellor and Nobel laureate Brian Schmidt told the Creative Country conference.

On a panel with Australian Future Projects founder and former investment banker Ralph Ashton, Knowledge Society CEO Elena Douglas and CSIRO astrophysicist Lisa Harvey Smith, Professor Schmidt said it was stability, in terms of government policy and economic settings, that helped California create the world’s centre of innovation and entrepreneurialism, Silicon Valley.

“I think one of the problems we have had in Australia is we have not had stable policy, so if you look at Silicon Valley it was all started by stable government policy, having small companies go through and have this ability to do procurement for the federal government and that has been around for decades,’’ he said.

“And that was where it built out of, quite stable policy in terms of funding, for Stanford University and Berkeley University, so that stability, even if it’s right or wrong, stability is really important.’’

In recent years Australia has not enjoyed such stability, the US-born Professor Schmidt lamented.

“The environment here from the government side is unstable, it’s been very unstable and the reality is the US puts more money into this sector of the economy than Australia and does it in a nice, stable way where we tend to jump all over the place so we get poor value,” he said.

“So I think that is a negative part of what we are doing here; we really do need to have 10 to 20-year stability.”

Professor Schmidt said one policy setting could be to encourage entrepreneurs to take risks by allowing failed companies to reincarnate and keep attempting to succeed instead of losing everything in bankruptcy.

“If you decide to invest in your own company in Australia and go bankrupt that’s game over. In the US it’s not. And it’s an important idea for people to look at, being a little less risk averse in this country,’’ he said.

During the panel discussion, Ms Harvey Smith called for stronger links between companies and universities that had proved a successful model in Germany.

“They are very connected to universities and to industry,” she said. “That sort of set-up is very much embedded into the national psyche and the system of industry and research at universities has been very successful for Germany.”