What's wrong with kids today?

The youth of today are an uppity bunch. Encouraged by their affluent baby boomer parents to follow their dreams, they soon hit the grind of the nine to five and find the reality of the working world a bit depressing.

It's no surprise really. These days every major company features a glossy HR brochure with lots of shots of happy, smiling people pursuing some fantastic extra-curricular activity, and testimonials about how their new hires will be ‘making a difference from day one.'

Except that's not true is it? Instead it's meetings and spreadsheets and internal politics and away-days where jaded older workers moan about yet another change to corporate strategy.

That seems especially true in Australia. A new survey of 16 countries by Deloitte has found that millennials (those born after 1982) saw the biggest gap between what they expected their employer to provide in terms of innovation – encouraging and rewarding idea generation regardless of seniority – and what they actually experienced.

Some of Business Spectator's readers might say that kids need to learn their place in the workplace before they go running off to their bosses complaining that they aren't being heard.

But before you get too incensed about young kids wanting the world and whinging about not getting it, consider this fact – the average age of a scientist at Los Alamos, the brains trust of the Manhattan Project, was 25.

What Deloitte is really revealing is a real problem in the way this country goes about innovation, and that there is a failure to address that cultural problem where it becomes most deeply ingrained. Perhaps it is the reason why Australia ranks only 13th out of 25 countries worldwide, according to GE.

Innovation is the foundation of productivity improvement – either by developing disruptive business models or identifying waste. That is already critical given the high Australian dollar and the challenges facing our exporters – and will be exponentially so once the investment peak of the mining boom passes and Australia is left with one job for every eight currently in mine construction.

But Australia should also be thinking about who will be the recipients of its non-mining exports in the future. The fastest growing countries in the world are going to be those with the ‘demographic dividend' of a young working population. That's what fuelled the growth of Japan, Taiwan and China over the last 30 years and there is already shift in manufacturing and production to ASEAN nations where the median age is around 27.

Along with factories and jobs come higher wages and stronger currencies, fuelling property and consumer booms. These young consumers will want products that speak to them. That's why millennials in developing countries feel far more confident that the companies they work for not only encourage innovation but actually do something about it. In growing economies, that's easier to achieve – with virgin markets to conquer there is plenty of room to grow. In the Deloitte study, 70 per cent of millennials in China, Brazil and India believe they work for an innovative company.

Developing countries could soon create products and brands that end up threatening our competitiveness. Think of the huge firms that sprang up in the post-war years, driven by the huge demographic bulge of the boomers. ASEAN nations have a similar demographic, and with tertiary education increasingly accessible, and will have the talent to create global firms.

As Gerhard Vorster, chief strategy officer of Deloitte, points out, the nature of innovation has changed. Once it was product-driven, now it is digitised. That means that we are far more susceptible to competitive threats and disruptive business models. These models can come from anywhere, even developing countries where forward thinking, youthful populations embrace and foster new ideas.

Perhaps Australia needs to really see a crisis before it is pushed into changing the way it responds to the innovative ideas of its youth. There's no more receptive audience than a desperate one.

That would be a shame because the worse time to innovate is when things are going poorly. To innovate you need space to experiment.

One week ago, Australia was perhaps desperate enough to start thinking more strongly about innovation. But this week's market euphoria might have put paid to that. This yield-driven bull rally will do little to reward truly innovative companies, and instead reward companies who continue to manage for operating cash flows and dividends. And it will likely be six months to a year before we see that money trickle down into the microcaps.

What Australia doesn't have, according to the GE survey, is a decent venture capital industry, ranking 21 points below the global average when it comes to private investment in startups. In biotech, for instance, there's plenty of money for listed companies like Mesoblast, but the investment funds that get nascent businesses on their feet are still struggling to attract capital.

So perhaps Australians are still a conservative bunch – not putting our money where our mouth is when it comes to innovation and with too many business leaders with their ears closed to the wish of their young staff to contribute new ideas.