Australians love reminding ourselves we invented Wi-Fi, the black box and the Hills Hoist. But those stories are outdated.
The challenges we face today are new. Nostalgia won’t build the systems we need to turn our next breakthrough into something the world buys.
No wonder we rank 68 out of 69 countries for entrepreneurship in the 2025 International Institute for Management Development (IMD) world competitive ratings. Our problem isn’t talent or ideas. It’s the system that supports them.
Too often, ideas head offshore to be commercialised because we haven’t built the right systems, incentives or cultural settings to support them here.
Mecca founder Jo Horgan
The EY Entrepreneur of the Year program has celebrated bold Australian businesses from various industries for more than two decades – from Chemist Warehouse which started with a single store 25 years ago and now operates over 500 outlets nationally, to skincare leader Mecca, which began in founder Jo Horgan’s Melbourne living room.
These businesses show us that great ideas can come from anywhere. But turning them into international success stories with global impact takes more than smarts and grit.
It also takes capital, capability and the confidence that Australia is the best place to grow.
Tall poppies, short vision
Ambition still makes Australians a little uneasy. While other nations celebrate risk-takers, we tend to cut them down. That mindset dulls our appetite to try, to fail—and ultimately, to build something better.
We often undervalue those who forge their own path or see entrepreneurship as a force for progress.
Take David Bussau, an EY Entrepreneur of the Year alumnus, who has helped over 7.5 million families access microfinance in developing countries through his work with Opportunity International Australia.
Entrepreneurs don’t just build businesses—they build what’s missing. From climate solutions to community finance, they fill the gaps that governments and large corporations often can’t. That makes entrepreneurship not just valuable, but essential to our national infrastructure.
Pegged back by policy
Australia ranks 11th globally for international investment, according to IMD – so capital isn’t the issue. Recent deals in data centres, property portfolios, and infrastructure show that investors continue to see value here. What’s lacking is the right regulatory environment to help local ideas grow and scale.
That starts with tax reform and cutting red tape.
In its submission to the recent Economic Reform Roundtable, EY Australia outlined three near-term reforms that could make a meaningful difference:
- Fix the R&D tax system. Make all offsets refundable, remove outdated caps and modernise eligibility to reflect how innovation really works – particularly in productivity-boosting technologies.
- Support small business cashflow. Provide quarterly or semi-annual refundable credits for firms under $20 million in turnover so they can reinvest in growth.
- Encourage onshore commercialisation. Introduce an intellectual property (IP) tax incentive, used effectively across Europe, to prevent Australian-developed IP from flowing offshore.
ResMed, founded by Dr Peter Farrell, is one of Australia’s most successful medical technology companies. ResMed’s move to the US shows that even our brightest ideas will leave if we don’t build the systems to keep them here.
The reforms above are some practical ways to stop Australian innovation from leaving our shores and start earning our place as a truly clever country.
But we need another big change …
Rewiring the national mindset
Here’s the real kicker: the IMD index is based on perception, not performance. It reflects how business leaders view a country’s potential.
Alongside our poor ranking in entrepreneurship, Australia placed 62nd for corporate efficiency, 60th for workforce productivity, and 54th for digital technology adoption.
This paints a picture of a business culture that undervalues initiative and innovation, resists risk, and settles for the status quo. This isn’t a start-up problem – it’s a systems problem.
The Australian Government’s response to the Economic Reform Roundtable must challenge how we think about and support entrepreneurship. Because Australia doesn’t need more inventions- we already have the ideas.
What we need is a system that doesn’t leave them hanging.
- Selina Short is managing partner, clients & industries, at EY Oceania.
