There are countless examples of Australians leaving the country and achieving spectacularly overseas. Is it right to consider this a brain drain? Brent Balinski collected some perspectives.
Recognising expat achievements
Lack of local appetite for risk; a small domestic market; the tyranny of distance: the reasons for Australian businesspeople taking their ideas overseas all sound pretty familiar.
In manufacturing and other fields, there is no shortage of brilliant Aussies who have excelled internationally, but who have done so while living abroad.
“The reality is we live in a global world, and the reality is we have so many global jobs back home in a smaller market,” Serafina Maiorano, CEO ofAdvance since 2008, told Manufacturers’ Monthly.
Maiorano lives in Brooklyn, New York, and heads the global network with a membership of 25,000 (in over 90 countries) of the country’s expat community, which numbers roughly a million.
The CEO said reasons frequently given for leaving included study, career opportunities, and seeking to build a business through chasing investment or closeness to a market bigger than the local one.
Advance held its fourth Global Australian Awards last night, recognising the achievements of expats and now in its fourth year. At a time when public discussion often includes the topic of commercialising the great ideas Australians have, the awards’ Advanced Manufacturing winners in 2012, 2013 and 2014 – Saul Griffith, inventor and CEO/founder of OtherLab; Peter Le Lievre, founder of Chromasun; and Chris Boshuizen, CTO and co-founder of Planet Labs – prove that it can be done.
Last night’s winner in the Advanced Manufacturing category, Dr Rodney Brooks, founder, chairman and CTO of Rethink Robotics, left Australia in the late 1970s to study a PhD in Computer Science. Choosing between Stanford and Carnegie Mellon universities in the US, he went with the former, as the US’s west coast was geographically the closest to home.
“When I left I didn’t expect to stay in the US, actually; I expected to be back in Australia in a few years – but it didn’t turn out that way,” Dr Brooks told Manufacturers’ Monthly.
The award winner has achieved considerable successes as an academic and an entrepreneur, spending a decade leading the MIT Artificial Intelligence and then Computer Science and Artificial Intelligence laboratories, and co-founding iRobot and Rethink Robotics.
Like many Australians, Dr Brooks was drawn to the US by academia opportunities. He currently lives in Boston, and returns here “at least twice a year.”
Many of this country’s entrepreneurs make the trip across the Pacific Ocean. The large number of Australians – estimated at around 22,000 currently – migrating to Silicon Valley has gained attention in recent years.
The appeal of the northern Californian innovation hub to talented young Australians is easy to understand: a thriving, cashed-up ecosystem full of ambitious individuals wanting to change the world through technology.
“The main advantage of the Valley is that if you want to talk about any technology that’s emerging, you send a few emails and you’re meeting with the CEO of that company,” explained Marita Cheng, the 26-year-old founder of Robogals and Melbourne robotics start-up 2Mar, and the 2012 Young Australian of The Year. She was also a mentee, through the Advance Global Australian Awards mentoring programme, to Le Lievre in 2013.
Cheng recently attended the 10-week Singularity University Graduate Studies Program at NASA AMES Research Park, funded by Google. As part of the intensive entrepreneurs’ programme, she co-developed a new app using machine vision to recognise and describe objects to vision impaired users.
“Everyone who’s working on the latest technology is living and working there and wanting to be at the new frontier of the technology,” the robotics entrepreneur told Manufacturers’ Monthly.
“And it’s so motivating to meet with so many ambitious people who want to lead with their technology and harness it to make our lives better.”
Have ideas, will travel
The country’s lack of anything like a Silicon Valley frequently comes up in conversations about innovation. In recent years, many Australians have made a mark in the Bay Area hub that grew up following the birth of thesemiconductor industry in the late-1950s.
With a population of around 3 million, the valley’s top 10 companies have a market capitalisation of around $1.7 trillion, according to some recent sums. Many start-up successes exit and join or form venture capital firms, investing in the next big disruption.
“It is all about a culture of creative destruction, and we don’t have a creative destruction culture here,” offered Chris Gilbey, CEO of Imagine Intelligent Materials and a serial entrepreneur. IIM is a graphene and composites technology business, spun out of the University of Wollongong, where Gilbey was formerlyEntrepreneur In Residence at the ARC Centre for Excellence in Electromaterials Science HQ.
“What we have in Australia – I’m not criticising it, I’m just calling it for what it is – is we have a tall poppy syndrome; people make money and people go, ‘Why him? Knock him down,” Gilbey told this magazine.
“That’s why you get people like the guys who started Atlassian who go and IPO their company in the US and do most of their capital raising in the US.”
As well as a contrast in attitudes, the Australian venture capital environment is “particularly unhealthy”, according to Gilbey.
According to the Australian Private Equity and Venture Capital Association (AVCAL), US VC companies invested $US 240.7 million in Australian start-ups for the year to June 30, 2014. This was triple what Australian firms invested in Australian start-ups in the period.
Last month’s interim Senate report into Australia’s innovation system identified a number of barriers to commercialising ideas. At the top of the list, was a “lack of innovation culture and appetite for risk – as innovation is largely about market experimentation, risk of failure needs to be accepted or at least tolerated.”
A sign of the disconnect between finance and ideas was that, of 178 submissions, there was only one from a technology investment organisation (AVCAL) or the finance sector in general.
The local unwillingness to invest in new businesses and other disincentives – such as high taxes – was hampering start-ups, said Gilbey, and is expressly different to attitudes in the US.
“In Silicon Valley, there’s that fundamental culture that says ‘We welcome people to come here and create new wealth, and we’ll help them do it,’ he said.
“So to create wealth you have to start with the simple proposition of saying ‘we want to reward those people who are determined enough and greedy enough to want to make an absolute shitload of money.’ Because the people who want to make a shitload of money are going to hire a lot of other people.”
Brain drain or brain chain?
The expatriate community of entrepreneurs and other achievers should not be viewed as a loss, but very much as a resource, according to Advance.
“The fact that Australians are really excelling around the world – we shouldn’t see that as a brain drain; it’s actually an incredible resource for the country to tap into, to leverage the knowledge, the skills, the influence,” said Maiorano.
“We talk about infrastructure like IP or schools or hospitals or things like that, and we see this as human capital infrastructure. This as social capital that Australia has the opportunity to leverage more.”
Professor Roy Green, Dean of UTS Business School, said Australians seeking their fortunes overseas could be be viewed as both a loss to and an extension of the country’s innovation ecosystem.
“Where entrepreneurs are leaving because they can’t build a business here and have to go abroad, I think that’s unfortunate and we ought to be able to provide an infrastructure and a market and market support that would be sufficient and attractive to keep them here,” he told Manufacturers’ Monthly.
“But if it’s about developing the market, as Atlassian is doing and as other startups are doing, and therefore repositioning in other parts to do so but retaining a connection to Australia, then that can be a positive. Because it’s essential if you’re developing a global business to go beyond Australia.”
Advance and its members are quick to point out that Australians were always happy to give back when asked, in mentorship and other areas, and retained a strong connection back home.
“I think I’ve tried to be a part of the Australian community the whole time I’ve been away: I do come back regularly, I visit robotics groups, I’ve been connected, certainly,” offered Dr Brooks.
“And I hope that my advice to NICTA [National ICT Australia, where Dr Brooks was a scientific advisory group member for a decade (now a part of CSIRO)] and other groups has been useful. I hope [laughs]. So I don’t feel I’ve cut and left.”
The topic of a perceived brain drain probably won’t go away, especially as the country looks to create new sources of wealth as the resource industry’s profitability declines.
Some say Australian policymakers and others aren’t doing enough to attract start-ups to form, grow, and create jobs and income.
Gilbey said his company, formed last year as NanoCarbon, was footloose and would put down roots wherever there was the most incentive to do so – “we could move to Singapore or the US or whatever.”
At the moment a Sydney location was a “lifestyle choice”.
“What countries like Australia need to understand is it’s only when a business has established itself, committed to the capital expenditure, built a presence – a geographic presence – that is hard to move from, it’s only when they’ve done that that companies are committed to growth in that area,” he said.
The lure of venture capital and the possibility of being near where the action is in the US and elsewhere remain strongly appealing for promising Australian businesses looking to grow. This week Freelancer CEO and founder Matt Barrie opined “anyone mildly interesting with a brain is fleeing [Sydney] to go overseas”.
How the issue is dealt with – or if it’s an addressable problem in itself – differs.
On the positive side, high-performing Australian emigrants retain a connection to their home (and this connection needs to be strengthened to be of the most benefit), said Maiorano.
Plus, they all seek to return someday, she added, citing Larry Marshall, who returned from a quarter of a century in Silicon Valley and who is currently putting his years of start-up experience to use as CEO of CSIRO.
“So they’re not a loss to the country,” said Maiorano.
“And he’s always been helping. Even when he was overseas, he was helping Australia as well. So they do it in a quieter way that might not always get the headlines.”