Fast following is no longer an option. Coming second in the digital economy race means coming last.
Australia has a longstanding pride in being able to “fast follow” innovation from around the world.
Fast following often means adopting technology fast, once another market has figured out a business model for that technology. For example, Australia initially embraced mobile phone technologies faster than most markets although the technologies were developed elsewhere.
From a political perspective, governments have seldom “invented” a new approach to anything. Politicians might (and do) travel overseas; find good and bad ways of doing something; then advocate what they see as the best option.
Australian business has historically taken a largely similar approach. Matching a business model from “overseas” is considered validation of a good idea. Ironically (and sadly) a locally invented good idea will often go to an overseas market to validate the idea before returning home to declare that this great idea has been acknowledged by England, for example.
Fast forward to the digital economy that we are now in. Digital business models are invented and deployed globally. The place where the idea came from tends to build a team locally, and scale out globally.
The simplest example is Facebook, a good local idea that went global. Alternatives such as MySpace set out in the same race but are now marginal. There is no second place. The scale and approach of Facebook resulted in a “winner takes all” outcome. Another example is Uber, the idea of which started in one city – San Francisco. Today, no scale alternative can touch it.
An inescapable conclusion arises from these and many other examples: coming second in the digital economy race means coming last.
The conundrum for Australian digital economy entrepreneurs is that capital markets insist on a solid business case before investing in something new. The solid business case, however, is derived from overseas market examples.
Without a great business case and example to leverage, the new project won’t be funded. But for the entrepreneur to wait for this new innovation to be validated by someone else means that the real opportunity will be lost.
The art of making an entrepreneurial decision to try something new without a solid business case seems to be critical in the digital economy and Australia is culturally lacking this approach.
We need to create new businesses in this country and not watch what other markets do and copy them. Rather, we must watch them to learn how to innovate in the digital economy, for our future jobs growth and digital prosperity.