Risk Appetite: Australian vs. US Companies
Culture around risk and innovation varies not just by industry, but by geography as well. A particularly striking comparison is between Australian companies and their U.S. counterparts. Australian business leaders are often characterised (even by themselves) as more risk-averse and cautious in embracing change, whereas Silicon Valley lore celebrates “fail fast, fail often” as a path to success. These differences in risk appetite can significantly influence AI adoption on either side of the Pacific.
Research and surveys give some weight to this perception. In Australia, almost 60% of board members admitted that innovation had never or only rarely been a board agenda item – a sobering statistic that hints at complacency. A report by CSIRO (Australia’s national science agency) and the University of Queensland went so far as to say Australian companies were stuck in a “corporate stone age”, reluctant to embrace new ideas and technologies. That’s a provocative phrasing, but it underscores a real challenge: a cultural comfort with the status quo. Australian firms have tended to be fast followers rather than first movers, adopting tech once it’s proven elsewhere rather than betting big early. Directors often cite the country’s regulatory environment and strict director liability laws as factors that nudge them toward caution. The result can be a low appetite for experimentation, and a focus on avoiding downside risk over chasing upside opportunity.
In contrast, U.S. companies – particularly in the tech sector – operate in an environment that rewards bold moves. Corporate failure in the U.S. carries less stigma; venture capital and large markets encourage aggressive scaling; and success stories of big bets (from Amazon to Google) set an example that embracing risk can lead to outsized rewards. This isn’t to say American executives are reckless – they have their own governance and accountability – but there is generally a stronger cultural narrative that not innovating is the bigger risk. It’s telling that Australian boards are seen to under-prioritise innovation and disruption risks compared to overseas boardrooms. Where a U.S. firm might allocate budget to a moonshot AI project, an Australian firm might require more exhaustive business cases and pilot studies first.
However, the gap is not insurmountable, and generalisations have exceptions. Many Australian companies are actively shedding their conservative approaches, inspired by global competition and the success of local tech champions (like Atlassian or Canva, which do embody a bold, innovative culture). And plenty of U.S. companies in traditional sectors can be quite conservative internally. But awareness of these differing mindsets is important. Australian directors and leaders might need to consciously challenge their instincts – to ask, “Are we avoiding this initiative because it’s truly unwise, or just because it’s unfamiliar?”
One encouraging sign is that Australian business leaders are increasingly talking about strategic risk – the risk of missing out on new opportunities. There’s a growing realisation that a risk-averse culture, with misaligned incentives, is less likely to support and invest in innovation, trial new processes, and adopt new technologies. In other words, playing it too safe is itself a danger. Company directors in Australia are being urged to broaden their perspective: to weigh the risk of trying something new against the risk of sticking with the old. As the CEO of the Australian Institute of Company Directors put it,
“Innovation is often missing from Australian boardroom agendas… traditional risks are the focus rather than the risks – and opportunities – associated with innovation”
For any business leader (not just in Australia), the takeaway is to foster a balanced risk culture. This means creating room for experimentation and smart risk-taking – running controlled experiments, setting aside an “innovation budget,” and even tolerating some failures – while still managing downside risks in a sensible way. Leaders can set the tone by celebrating intrapreneurs and project teams that take initiative, not just those who hit short-term targets. Over time, an organisation that learns to take calculated risks in pursuit of innovation will outpace one that only plays defense.
