Australia's Fear of Excellence
Australia has a problem with ambition.
Our culture punishes people who aim high, quietly shrinking the country’s future: fewer breakthrough companies, fewer high-value jobs, and less wealth created here rather than somewhere else. This systemic issue manifests across three dimensions: cultural attitudes that discourage risk-taking, institutional frameworks that fail to support innovation, and policy settings that inadvertently penalize success while rewarding complacency.
Australia's Declining Edge in a Competitive World
We have world-class universities, political stability, rich natural resources, and proximity to Asia’s $38 trillion markets. Yet we’re squandering it. Productivity growth has halved since the 1990s1 and our R&D investment of 1.8% lags2 the OECD average by 50%. Young Australians face a perfect storm of higher effective tax rates3, real wage reductions4, housing unaffordability5, and education debt that prior generations didn’t shoulder. This pushes many to seek opportunities elsewhere6 exactly what our aging population7 can least afford. The "Fair Go" Australia prides itself on increasingly rings hollow for our youth.
Our economy is becoming less complex, not more, slipping from 57th to 99th8 globally in Harvard's Economic Complexity ranking—a measure indicating both the depth and breadth of a country’s innovations—behind countries like Botswana and Honduras. This decline signals fewer innovative opportunities and weaker economic resilience. And in a shifting geopolitical landscape, we can't afford complacency. China is actively reducing9 its resource dependency10 on Australia, while America's inward focus means we may not be able to rely on their traditional security guarantees forever.
Where Australia's Ambition Deficit Is Costing Us Most
The evidence of our ambition problem is pervasive. Despite our talent, we have one of the lowest venture capital investment rates11 per capita in the developed world. Our universities generate research that rarely becomes commercial due to bureaucratic barriers12, while super funds control trillions13 yet barely invest in early-stage ventures.
This complacency extends to our political system, where we have a "small target strategy" combined with a "mandate mentality" that creates reform deadlock. Political parties avoid proposing significant reforms during campaigns through fear of marginalising their vote, then feel constrained from introducing reforms they didn't campaign on once in government. Former Treasury Secretary Ken Henry calls this14 a systemic avoidance of bold vision.
The "mining myth15"—the false belief that Australia's prosperity can be indefinitely sustained by resource extraction—has further undermined reform urgency. This persists despite the mining boom causing a 70% real exchange rate appreciation—the functional equivalent of a 70% tariff—that damaged other sectors of our economy, including manufacturing and agriculture.
Our fear of ambition hides in plain sight: not in what we say, but in what we fund, praise, punish, and ignore.
Innovation vs. Equality: The Myth Holding Australia Back
Australia doesn't need to choose between ambition and fairness—that's a false dichotomy. While some defend our cautious approach as prudent risk management, this risk aversion has become pathological. Nordic nations prove that welfare and innovation can thrive together: Sweden spends 26% of GDP16 on social programs yet ranks 2nd globally in innovation17, investing ~3.7% in R&D and creating two billion dollar companies (“unicorns”) per million people18. Denmark commits even more (28% of GDP19) while ranking 10th in innovation20 with 2.3 unicorns per million21. Meanwhile, Australia produces just 0.43 unicorns per million22 and invests only 1.8% in R&D23.
Our economic growth increasingly relies on population increase24 and resource extraction—exactly the opposite approach of countries outpacing us economically. This unsustainable path demands bold corrective action.
Rekindling Australia's Ambitious Spirit
Reform requires leadership with vision. Previous reformist leaders like Keating and Howard tackled difficult reforms to cement their place in history, while recent political leaders have explicitly rejected25 legacy-building as a "vanity project." This leadership vacuum cascades throughout Australian society.
Significant reform in Australia has historically required a "burning platform26" narrative—a compelling sense of urgency that motivates action. We need to articulate why Australia's declining economic complexity and productivity represent a genuine crisis requiring immediate attention. The good news is, once we decide these are problems worth solving, the Australian government is incredibly effective by global standards at implementing and achieving policy goals—our state capacity is high. Joe Walker discusses this little known fact in his recent literature review, “Australia’s State Capacity27.” But the core message is: Australia can definitely solve these problems if we put our clever minds to it.
Specific reforms could include:
Reforming university commercialization to reward researchers for market outcomes and streamline lab-to-industry pathways
Implementing taxation reforms incentivizing long-term innovation investment instead of plans like the Labor governments28: taxing unrealised gains in superannuation—which inadvertently reinforces the message that excessive success will be penalized
Investing more in the future sectors that matter: AI, energy, and robotics
Different stakeholders would benefit uniquely: entrepreneurs gain access to capital and support; universities increase research impact and funding; super funds diversify investments29 for long-term growth; and Australians access more high-value careers without emigrating.
What else can we do?
For all Australians: embrace your aspirations openly. Visible ambition encourages others to aim higher. When someone aims high, pause to ask if your skepticism helps or merely protects your ego.
For the media establishment: start celebrating Australian’s for taking bold bets and address failure constructively, instead of preferring cautionary tales screaming, “I told you so!”
For investors: bet on builders, even if their vision isn't fully clear. A small gesture of belief can alter trajectories and, with them, the country's future.
The Australia that thrives will retain its egalitarian spirit while celebrating those who aim higher.
The real question isn't whether Australia can produce world-changing people and companies. It's whether we'll finally stop punishing those who try.
And for anyone doubting:
I love Australia more than any other country in the world and that's why I insist on the right to criticize her perpetually—because I believe in what she could become.
Post-read
If you’re curious about what’s at stake with artificial intelligence, read my essay thelastinvention.ai.
I’m investing in early-stage Australian Companies (and am a scout for AirTree ~$1.3bn fund). If you’re building something and want to battle test your idea, please reach out—I’ll do everything I can to help you succeed.