Australia is Losing at Innovation, Asian Growth

Seek co-founder Andrew Bassat raises fears.

Australia’s innovation and regional growth potential is being hampered by risk-averse, short-term thinking, according to Seek co-founder Andrew Bassat.

While other firms in the “increasingly global marketplace” were being afforded opportunities to solve large challenges over longer time scales, Australian companies – with a handful of “terrific exceptions” – mostly found themselves solving incremental problems.

Bassat said he held “genuine” and “grave” concerns that Australia isn’t doing enough to overcome its short-term thinking problems.

“I think the biggest risk now in a disruptive age is doing nothing or not doing enough,” Bassat told CEDA’s state of the nation conference in Canberra.

“Boards and companies need to just put their necks out a bit and take a risk, recognising they’ll come unstuck occasionally if things go wrong, but if they’re willing to cop the public criticism that always comes with missing short term numbers and explain this is part of a long term plan so that the timeframe is articulated to the marketplace, [change and acceptance is] possible.”

Bassat believed risk aversion among Australian businesses came from being punished for missing short-term numbers.

“There’s a whole range of problems - some cultural, some of it is the company themselves, some of it is the investor base in Australia, and they all contribute to short-term thinking,” Bassat said.

“CEO tenure - which was about five years - is coming down. Why would you even think about doing something that’s got a 5-10 year payoff like going to China or some sort of technology investment when you’re only going to be in the job another four years. You’re going to cop the pain for the investment and get none of the benefit or reward.

“There’s the shareholders who are incredibly short-term focused in Australia. There’s some really good exceptions, we’ve managed to find them over time but so many of them want to talk the short-term numbers and nothing else. The conversation is very different with investors in Australia compared to the investors I speak to in Asia or elsewhere overseas.

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