I came across the report ‘Turning Research into Economic Competitiveness for South Australia’ (read), initiated in late 2022. The draft zooms in on turning research into economic competitiveness for South Australia. SA’s research sector has significant potential to contribute to economic growth. Still, there are challenges in translating research into commercial outcomes. The report makes several recommendations to overcome these challenges, such as increasing investment in research and development, improving collaboration between industry and research organisations, and, what I think is fundamental, fostering a culture of entrepreneurship. It highlights the importance of investing in skills development and attracting and retaining talent to support the growth of the research sector.
How do we develop a culture of entrepreneurship, and how are other countries like the Netherlands and Germany fostering the spirit of calculated risk-taking?
Developing an enterprising culture is crucial for fostering economic growth and competitiveness. It is essential to provide education and training programs to help (aspiring) founders acquire the skills, knowledge, and mindset needed to succeed in their ventures. As we know, ecosystems like incubators and accelerators support startups with resources, mentors, and networking opportunities.
Access to funding, including venture capital, angel investors, and crowdfunding platforms, is also critical to ensure these risk-takers have the financial means to realise their ideas. Policies and regulations supporting entrepreneurship, such as tax incentives, simplified registration and licensing procedures, and intellectual property protection, are essential for a supportive framework.
Another critical factor is encouraging collaboration and networking among entrepreneurs, investors, and industry experts through events, conferences, and other platforms. And partnerships between the government, industry, and academia can be created to support entrepreneurship and innovation.
Societies with similar cultural values, like the Netherlands and Germany, have adopted various approaches to foster their enterprising spirit. These include developing physical or virtual spaces where startups and entrepreneurs can collaborate, hosting competitions encouraging innovative solutions, promoting open innovation through partnerships, using government procurement to support startups, and incorporating entrepreneurship education into the school curriculum. Not much of a difference compared to SA’s approach.
However, the Dutchies and Germans have established themselves as global leaders in entrepreneurship and innovation, while SA took a different approach. Both have a long history of entrepreneurship, dating back to the industrial revolution or, in the case of the Dutch and later the British and other European countries, to VOC (Vereenigde Oostindische Compagnie) times. This has created a deeply rooted culture that values risk-taking and innovation, focusing on developing new technologies and business models. By the way, the United States also has a robust entrepreneurial culture as the US has a long history of individualism and self-reliance, encouraging people to take risks and pursue their dreams. The American Dream is a product of a relatively open economy, characterized by a high degree of international trade and investment, with businesses competing on a global scale, with a competitive market. In contrast, Australia’s entrepreneurial spirit has historically been more muted, with a greater emphasis on stability and security. And SA’s economy has historically been based on primary industries such as agriculture and mining, which may have placed a different emphasis on concepts essential for economic growth and development.
Adding to that, Australian states compete with one another to attract investment, talent, and businesses. Each state has unique strengths and weaknesses that can be leveraged to attract investors and entrepreneurs (this competition can drive innovation and growth across the country and create tensions between states). However, SA is now diversifying its economy and investing in emerging sectors such as renewable energy, advanced manufacturing, and digital technologies, which could provide new startup opportunities.
Back to NL and DE again─both invested heavily in creating a supportive entrepreneurship ecosystem with some of the approaches I listed earlier. And SA made significant progress in this area. However, there is still (aero)space to create a truly supportive environment for entrepreneurship. For example, SA startups face significant challenges when accessing capital from (private) investors. The ecosystem is relatively small and less developed than in other parts of the world. This means fewer (private) investors with experience in backing startups and a limited pool of capital available to fund new ventures. These systems-critical stakeholders may be more risk-averse, preferring to invest in established businesses rather than ventures still in the early stages of development, which links to the enterprising cultural spirit in general.
Going through the report, the following idea came up: it would be interesting to find out how to increase the accountability of startups which eventually increases the willingness of investors to chip in much-needed capital.
The ‘right’ entrepreneurial culture and mindset would be a game-changer, but it should be more than just a one size fits all thing. In the two countries where I lived and worked (with and in startups) longest, there is a culture of calculated risk-taking─where failure is seen as a learning opportunity and not necessarily a source of embarrassment. But getting it right takes time and involves a holistic approach that includes all ecosystem players. It would be interesting to be part of the discussion and cultural transition and see how South Australians envision their entrepreneurial path reflecting their unique way of life and thinking.
Vasco Bontje 