Australia lags behind other countries on innovation because of an "inward looking" corporate mentality, according to a major new report that finds four in ten Australian companies have little or no innovation culture. 
A mere 16 per cent of Australian companies are "high performance" innovators, according to the Department of Industry, Innovation and Science's annual innovation report. By contrast, 39 per cent of Australian companies have little or no innovation culture and 36 per cent have a siloed culture. 
The report comes as the government prepares to release an innovation policy statement next month including significant changes to research and development tax breaks, university funding and insolvency and bankruptcy laws. 
"Australian corporate culture needs to overcome an inward-looking tendency," the report argues.
"These findings may be one factor in helping to explain Australian businesses' relatively poor performance in developing new-to-market or new-to-world innovations when compared internationally."
The report finds around 53 per cent of Australians believe entrepreneurship is a good career choice - far lower than 65 per cent in the United States and 60 per cent in the United Kingdom.
Similarly, Australians were found to be more fearful of business failure than in other advanced economies including the US and UK.
New Innovation Australia chair Bill Ferris, a veteran venture capitalist, last week said Australians suffered from a "fear of failure" and need to embrace a more risk-taking culture.
In his first speech since taking on the role, Mr Ferris will on Wednesday say that Australia is in the world's top three or four nations on the basis of research breakthroughs.
"I cannot however make a similar boast about our ability to commercialise and get our fair share of the world's marketplace for this intellectual property and inventiveness," he will say.
"Australia is struggling to even stay within the top 30 OECD nations in terms of any commercialisation metrics. 
"We are now at risk of squandering opportunities created by our highly credentialed R&D platforms."
Mr Ferris, a key adviser on the government's upcoming innovation policy statement, will argue the $3 billion spent each year on research and development incentives is too broad and needs to be tightened. 
"Evidence suggests that this scheme could be improved by a sharper focus on our higher growth and R&D intensive businesses," he will say. 
The Department of Innovation report also finds that, unlike in the countries such as the US and Israel, Australian venture capital investment has not returned to the same levels as before the global financial crisis.
Early-stage investment in Australia is just half the OECD average, with venture capital funds narrowly focussed on areas such as information technology.
Follow us on Twitter