Australia lags behind other countries on innovation because of an "inward looking" corporate mentality, according to a major new report that finds four in 10 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. This 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.The report finds about 53 per cent of Australians believe entrepreneurship is a good career choice - far lower than 65 per cent in the US and 60 per cent in Britain. New Innovation Australia chairman Bill Ferris (pictured), a veteran venture capitalist, last week said Australians suffered from a "fear of failure" and need to embrace a more risk-taking culture.