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Australian entrepreneurs need to embrace ‘creative destruction’, claims Turnbull

Friday, 16 November 2012 | By Oliver Milman

Malcolm Turnbull, the Opposition communications spokesman, has urged start-ups to do more to promote their own successes, claiming that Australia needs to start celebrating the “creative destruction” of industries in order to foster cutting-edge innovation.


Speaking at start-up pitching event Innovation Bay yesterday, Turnbull attacked former prime minister Kevin Rudd for being too focused on being seen in a “fluoro vest and a hard hat”, rather than helping new sectors to emerge.


“One of the things that is very important to keep in mind too is that all politicians like to appear in hard hats and fluoro vests,” he said. “But the truth is that our future of job growth in this country depends on innovation.”


“The fact that great businesses can be basically destroyed overnight and replaced by new ones, you’ve got to recognise that as an opportunity not a threat. And look at the risks that enterprises take when they don’t do that. I mean there are so many examples – Kodak, there’s a long list of them.”


Pointing to the struggles of Fairfax, Turnbull said that bosses should be prepared to “cannibalise your own business” in order to survive – something that some industries have not done.


“We haven’t had, until recently, what you could describe as a dynamic innovation-focused business culture…that encourages businesses to invest continuously in innovation, and channels capital towards high-risk, high-reward opportunities by funding and valuing world-class scientific and technical skills,” he said.


“Now that is starting to develop, but we need to do more of that and I’m very keen to hear from you as to what are the levers we can pull, what more can we do in government to promote that more innovative culture?”


Turnbull said that tax rates and workplace relations were areas of concern, but that start-ups should be focusing on helping themselves by doing more to promote their successes, such as capital raising.


He added that being connected to a start-up ecosystem was essential if ventures are to thrive in Australia


“I’m not here to complain about the media,” he said. “Winston Churchill once said, complaining about the media is like complaining about the weather. There’s nothing you can do about it.”


“Whatever you say will have no effect. But the truth is, there is not enough prominence given to the successful investments, because that’s really what the investors need to know about. They need to know that this is a line of activity, a line of investing, that is actually going to pay off.


Unfortunately, all too often the failure, or the lack of success, gets one thousand times more press than the successful investment. And I think networking is absolutely critical.”


“You know, when you boil it all down, that is what makes Silicon Valley work. That is what makes Silicon Alley work. It is the proximity, the connectedness of good lawyers, financial people, programmers, entrepreneurs.”


“That is why if you were starting a new technology business in the United States, even though taxes in California are higher than just about anywhere else, you would in all probability move to the Valley.”