The Ambitious Australia: Strategic Examination of Research and Development final report of 17 March 2026 promotes the need for greater emphasis on innovation and research in Australia. It is critical of current laws and disjointed approaches and makes several recommendations.
As to one issue, it sees the need for a “cultural shift” in order to
“position Australia as a nation that encourages taking entrepreneurial risks and celebrates business and research success. … Australians must persistently celebrate successes, recognise researchers, back our entrepreneurs and share the stories of breakthroughs. Not just every now and then, but at every available opportunity”.
That is a fine sentiment but it must acknowledge that for every success there may well be many failures, innovation inherently involving risk. That failure can have serious consequences for the entrepreneur.
Failure
Apart from success, how Australia views failure is also a relevant factor. And it does not seem to do it very well.
There is much research and substantiating literature as to the connection between a country’s level of innovation and its treatment of failure, with particular emphasis on a country’s insolvency laws.
A more sympathetic acceptance of failure can lead to a higher level of innovation culture.
A recent World Bank report refers to an EU study suggesting that efficient pre insolvency frameworks are positively associated with high levels of entrepreneurship and that personal insolvency laws should also provide for a basic safety net to encourage entrepreneurship and innovation.[1]
The government’s “Welcome to the Ideas Boom” of 2015 recognised the same sort of concerns in this 2026 report. As to insolvency laws, these were to be reformed, as they
“put too much focus on penalising and stigmatising business failure. The Government understands that sometimes entrepreneurs will fail several times before they succeed – and will usually learn more from failure than from success”.
A reform announced was to reduce the default bankruptcy period from three years to one year.
During more than 10 years of agonising, no reform has occurred, with concerns expressed about debtors abusing the system and organised crime benefiting from any change (qué?).
But a reform that has in fact been announced, but one that is necessarily being pursued very slowly and carefully, is to allow debtors 21 days instead of 14 to respond to a bankruptcy notice.
Culture
This isn’t so much about bankruptcy as about culture, which may be inherent in our history. Our State of Victoria has the pride of being one of the last jurisdictions in the world to do away with debtors’ prisons.
I’m not sure what happened with all the recommendations of the 2015 Ideas Boom report; nor what will happen with the current 2026 ones.
Poppy King
Suffice to conclude with the story of Poppy King who some years ago created a cosmetics empire which initially succeeded and made her the darling of the media – the front page of Business Week no less. But her business ultimately failed and she came under investigation and criticism. She survived but she left Australia and went to the US and succeeded in another venture.
She was later critical of her experience in Australia and in comparison, was reported as saying that in the US,
“if you haven’t been in Ch 11 (bankruptcy) you’ve never been in business”.[2]
In contrast, if you’ve been in an Australian bankruptcy you are out for a 3 year minimum period, with a penalty of 6 months jail for failing to immediately inform the trustee of a change of address.
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[1] Insolvency regimes to promote entrepreneurship and jobs: focus on MSMEs, Antonia Menezes and Akvile Gropper, World Bank Group.
[2] Insolvent Words (2001) 2(1) INSLB 2.
