Sydney — Australia is confronting what experts describe as an “innovation crisis”, with the nation slipping behind its OECD peers in economic complexity, technology exports, and sovereign industrial capability. According to a recent analysis in Forbes Australia (October 2025), the country excels at inventing but struggles to scale and retain its innovations.
The Core Problem
- Australia boasts world‑class universities, Nobel laureates, and a thriving startup scene.
- Yet, in hard metrics, it ranks below Botswana in economic complexity.
- The issue is not invention, but the failure to grow and commercialize innovations at scale.
Why Scale‑Up Matters
For more than a decade, government and industry have invested heavily in “Zero to One” initiatives—accelerators, incubators, tax incentives. These have succeeded in producing hundreds of startups each year. But without a national scale‑up ecosystem, many of these ventures either fail to grow or are acquired offshore, draining talent and intellectual property.
Strategic Imperatives
The article argues that Australia must urgently:
- Build sovereign capability in critical sectors like AI, quantum, climate tech, healthcare, and defense.
- Retain and grow homegrown companies to global scale, rather than losing them to foreign buyers.
- Coordinate state and federal policies to create a unified national framework for scaling technology.
Regional Relevance
For ASEAN economies, Australia’s struggle offers a cautionary tale. Innovation without scale is fragile. Countries in the region that are investing in startups must also ensure pathways for growth, commercialization, and global competitiveness.
Broader Implications
If Australia fails to act, it risks becoming a permanent “branch office economy”, dependent on foreign technology and capital. Conversely, a robust scale‑up ecosystem could transform it into a regional leader in advanced industries, strengthening both economic resilience and security.
