I should spend less time ‘navel gazing’ and more looking for typos!

The problem is that Australian investors are largely followers. They’re happy to invest in something that’s proven — with revenue, customers, demand. Even angel and “seed” VCs say “the idea’s good and you’ve got a great team….come back to us when you’re farther along.” In short, they want a sure thing.

Sadly, I may be leaving this great country of yours soon and heading back to the US, where startup companies in my niche are being funded.

There are a variety of scenario’s that can be pursued with our business – and we are following all of them diligently. We are talking to a number of Australian Parties – some who are looking at this as an Equity play, as well as local arms of International players.

A good friend of mine has been living as an expat in Eruope for over 20 years and his concern when tried coming home a few years ago was how heavily Australians rely on our government.

I like the idea that we can work WITH our government to make things happen and that our government can facilitate development by offering effective policy suport (e.g. tax incentives) and staying out of the way for execution. It sounds very reasonable and sensible.

Sadly, the corollary is that the commercial sector must be the active partner for innovation, driving, funding and buying what the entrepreneurs are doing. Of course, one can’t expect companies to buy what doesn’t add value to them but, that, in itself is another matter of perspective. If we had a large aviation related company it could acquire Jeff’s business and drive it into world domination, making a huge profit along the way.

Oh what’s that you say Mr. Australia? We don’t have a large aviation related company because they are all in the USA or Europe? Hmm, the Canadians, Israelis and Brazilians at least might argue with you there but, no matter, let’s say you are right. Did Finland have a large telco to drive Nokia? No.

Australia does have some very worthy technology companies and the products and capabilities of Jeff’s company could easily help those companies to row and prosper as global leaders of classes of technology. There are other Australian companies like Jeff’s with world leading technology in the aviation sector and many already dominate the global niche. Any private equity investor worth his salt should be eager to back a sensible consolidation play (roll-up) of those companies and see his equity investment returned many fold in 4-6 years. What stops them apart from the fact that we have no leading PE firms with global aviation expertise?

Management is the usual answer. After all, clearly Finland had the world’s greatest experts in mobile phone technology management and that is why they succeeded – not!!

At home and among Aussie expats we have some of the best managers in the world and many who could grow into the role. What we lack are investors capable of reognising those managers and backing them, investors equipped to assist those managers and network them. No government program can replace what is missing from the commercial mix and no measure of inputs to R&D can identify the cause of the shortfall in outputs.

If Australia is to adopt innovation as a driver for our economy then we need to release our feverish grip on bad habits like the tall poppy syndrome and promote our good habits like “you never know if don’t have a go”. Australians are rare in the world (less than 2%) and our natural inclination to take the initiatiev and get things done is a rare commodity that stands many an Australian in good stead when building a career overseas.

Let’s bring it all home. Let’s have a government that build tax incentives that encourage patient risk capital for entrepreneurs and a government that partners with the investors without tying their hands behind their backs. Let’s have a commercial sector that is more concerned about Australian profits and success than it is about contributing to the net performance of an overseas parent.

I’m not advocating stepping out of the global village, not at all. Quite the reverse, let’s jump in with both feet and start doing. Let’s have some confidence in our own abilities as innovators and managers, as competitors and winners. Open our eyes and seize the opportunities while we are still the lucky country and have the opportunity to stumble a few times without losing everything. If we don’t do that now we may be asking to be a state of New Zealand, or selling our vast empty land at bottom dollar to the over populated countries of Asia and when we’ve sold all that land what will we have left?

You highlight that “The first observation that can be taken from this report is that mining revenues account for approximately 25% of our GDP.” however its the 53.8% of export earnings coming from mining/resources that I think really drives the lack of genuine interest from government in innovation. Lately it feels to me that Australia has become a country that digs stuff up and invests in domestic property. The range of benefits offered to entrepreneurs overseas is simply astounding in comparison to what is available here.

NASA have advised our company (Melbourne born, bred and growing) that we appear to have the only viable system for the improvement of separation distances at major Airports – with a potential of 8 – 21% increase in capacity without extra runway!

NASA are coming back to Melbourne in the first week of March for further assessment and bringing the FAA with them.

Is the market in Australia – no! (well – Sydney Airport could derive 15% benefit (with accompanying improvements in wind shear monitoring and safety) worth in excess of $600m to their Mkt cap.)

It is the 160 capacity constrained airports in Europe and the US – along with the US$41bn per annum economic cost of delays [US only].

Can we assist Boeing with its 747-800 overcome the certification issues Airbus is still facing (after 5 years) with its A380? Yes.

The question is – can Aviation globally be managed from Australia? Whilst there is always a localised requirement, the answer is yes to a lot of the Information management, but the process is political.

We have the opportunity now as microscale meteorology is the key not only to this, but numerous military, environmental, engineering, wind energy ………… and other applications.

The Governments (Federal and State) are clearly interested in Aviation – but the upside is not in ‘end of hemisphere’ maintenance processes that are not cost effective for airlines. It needs to be on aspects such as the 18% of the Joint Strike Fighter that was designed here – because the American’s did not have the capability – and unique opportunities that will leverage greater penetration such as ours.

Will we (as owners) succumb to the offer of big $ from an overseas player – at the end of the day sensible for a 10 year play that has only just earnt revenues, but the questions is, what can we do to maintain ongoing benefit here?

To this end (positively) the Dept of Innovation is practically looking at how to assist.

The issue is actually about taxation reform. Until there is a tax system that enables entrepreneurs to be rewarded with options at a low strike price without being taxed, there will not be an environment where it is worth while to do anything other than to grow value in the business and flip it.

We need a system that does not penalize people for raising a lot of capital, does not penalize them for boot strapping their businesses, and rewards them for keeping the IP in Australia… Then you get the flow of royalties coming to Oz rather than the underlying IP being sold to a foreign country. Works well for a moment, but doesn’t give the country recurrent revenues. That is not about Commercialization Australia. That is about revamping the tax laws.

I think that the only navel innovation that the Spanish and Portugese did was in the field of orange cultivation – though admittedly they did a pretty fine job!