A news editor pulled me aside once, after I’d made a big editorial call, and said: “In future, I want us to be the second outlet to run a breaking story like that.”

Being chided, however tongue-in-cheek, rankled. My calculated risk had come off and his words stuck with me as exemplifying Australia’s risk-averse culture.

Later, working with seasoned executives, I was fascinated by discussions of leadership and decision-making. The global financial crisis separated the best from the rest as leaders were forced to make tough decisions fast, throwing out the rulebook without sacrificing future growth potential. Many saw it as an opportunity for long-overdue change, a handy ‘burning platform’.

Like it or not, ‘burning platform’ is the new norm. Today’s operating environment is hyper-connected, volatile and fragmented. Technology is a major driver, but the changes are more profound and the implications for Australia are far-reaching.

The key to survival is innovation

Recent research by GE underlines Australia’s quandary. The GE Innovation Barometer found that while 86 per cent of Australian business leaders agree innovation is the main lever for a more competitive economy, only two per cent of the 2800 global executives surveyed nominated Australia as an “innovation champion”. Asked to assess their own country’s reputation, 18 per cent of the 100 Australian executives surveyed put us in the “champion” category.

Australia fared better in another study, leading the world in key areas of support such as university-industry collaboration, and research and development spending.

Research, however rigorous, is always open to interpretation. What the GE findings reinforce, though, is a deep disconnect between how we perceive ourselves as innovators and how others see us.

This perception gap potentially condemns Australia to global irrelevance. While we boast promising sectors and companies, research by INSEAD, the World Economic Forum and others indicates that our relative innovation performance is languishing. Asia, in particular, is catching up fast.

Skewed to science

In Australia, the innovation debate is too often hijacked by semantics and skewed to science and technology at the expense of deeper questions about leadership, culture and national identity.

Within organisations, the situation can be just as dire. Innovation efforts are often heavily siloed, with most workers shut out of the process. Is it any wonder that productivity is suffering?

At the same time, the term ‘innovation culture’ is bandied about as if it can be bought off the shelf. It’s become a cliche, with lots of finger-pointing, opportunism, quick fixes, and few sustainable outcomes.

That’s because there is no easy answer to our innovation dilemma. As the diversity and employee engagement debates have shown, changing behaviour is a complex, long-term proposition. Change is about doing and trying, not just talking. It involves courage and a sense of purpose. Change is led by leaders prepared to cop flak and take risks. We do have such leaders, but not enough of them — yet — to influence the debate.

Government has a critical role to play in ensuring settings that enable business to create jobs, generate wealth, explore possibilities and tap new markets. Yet government too is ripe for transformation. Australia is not alone in grappling with these challenges. The international debate is wide-ranging and intense. What’s increasingly clear is that innovation and employee engagement are inherently linked. Innovation is, at its core, a leadership responsibility and therein lies the real opportunity. Harness people’s natural curiosity and capabilities and the race is half won.

Struggling with risk

As Australians, we struggle with risk, avoid failure and are deeply ambivalent about success. By default, we gravitate to our comfort zone. On the other hand, we have the pragmatism and resilience that come from living in a harsh land. We also have high-calibre, globally competitive executives, a skilled workforce, political stability (of a sort) and populous, fast-developing neighbours.

Such dualities in our national psyche have been part of the problem and acknowledging them is part of the solution. Being able to embrace multiple, competing realities is a hallmark of a new world where either/or is increasingly irrelevant.

For Australians, accepting the mantle of individual leadership on innovation is more than achievable: it’s a national imperative, and not just for economic reasons.