Aussie Aussie Aussie, Oi

Recently I was included on a small email list of self-appointed experts that have taken it upon themselves to educate the incoming Australian federal minister for industry on what is needed to ‘fix’ the start-up tech sector.

Much of the proposed advice to the minister involved the government handing over money to groups of people to which the self appointed experts could reasonably be assumed to be related to. The rest of the proposed advice could have indirectly profited the experts through tax incentives for investment in the tech sector and by the removal of barriers to gambling on the tech sector.

We have never had a sparkling tech start-up sector in Australia. At times it has shown a little self-promoted promise with the odd eccentric moderate success, but most of the time it has been what used to be called a ‘mudguard’ – all shiny on top and shit underneath.

It’s just the vibe of thing; it doesn’t work and it’s not good. And most people with the required expertise can recognise this. Even if they can’t recognise it, one trip to Silicon Valley convinces them that over there they have something that we do not.

And yet our local media just about refuses to run any tech sector story that isn’t blazingly upbeat. I think this is because the tech sector stories are in the same category as morning TV. Interesting but not that important – so they make them ‘feel good’ stories.

For example, a two man start-up might be promoted as the next Uber and then it will quietly disappear never to be heard of again. No one cares, they just want a good news story that doesn’t really matter.

And then it gets interesting. The experts that can see past the positive media coverage all have a pet hypothesis as to the root cause of the ‘problem’. Variably they will say, not enough skilled entrepreneurs, or not enough quality innovation, or not enough investment capital, or not enough qualified venture capitalists, and the list goes on.

Some of them then start promoting to the government the hypothesised solution; for example (working through the example list above) creating courses to skill up entrepreneurs, or investing more into university R&D to create more innovation, or removing barriers to crowd funding of micro-investment funds, or giving VC capital at friendly terms to Australian venture capitalists returning from Silicon Valley (and the list goes on).

I have seen a pattern here:

Firstly the experts announce that there is a problem, the lack of a vibrant tech sector in Australia, without ever defining what a vibrant tech sector would look like. To this I would not that ‘rule number one’ of enlightenment rational thinking is ‘do not start looking for a solution to a problem until the problem has been properly defined’.

Secondly, they hypothesise a solution without ever realising that their idea is just a hypothesis. That is, it could be wrong and it needs to be stress-tested before being implemented. Since different people have different hypotheses you’d think they’d catch on. But no, everyone just thinks that everyone else is wrong – if they just added one person to the list of people with wrong ideas then this would be the only truth on the subject they ever got close to.

Thirdly, in the unlikely instance where an individual has defined the problem, has come up with a hypothesised solution and tested that solution, it still wouldn’t work. I can only explain this phenomenon by using scientific terms that will ensure this missive is never understood by those that don’t want to understand it.

The experts look at the problem in ‘kinetic’ terms; that is, they see the lack of vibrancy caused by certain missing or under-performing elements of a tech food chain. Fix these elements they say, and then magically all would be OK despite all the evidence to the contrary from past efforts.

But the problem is actually ‘thermodynamic’ in nature. By this I mean that there is no actual need in our economy for a tech sector to exist. The commodities sectors do not need one. The oligarchies in the services sector don’t need one. The educational exporters don’t need one. Basically there is no corporate sector that requires a steady stream of new platform technologies served up by start-ups. Without this high level ‘driving force’ no amount of fiddling with the kinetics will do any good.

I have tried to explain this to a few people in the business and I am 100% sure that they do not have a clue what I am talking about.

I even wrote a paper outlining how the corporates in the service sector could be encouraged by government intervention to require invention and innovation. I proposed that this might be the thermodynamic kick-starter that we would need to have a thriving tech sector.

I am not very surprised that the paper was not understood and largely ignored. The factors at work against recognising uncomfortable truths are self-interest and ignorance; a powerful combination if ever there was one.