For decades, Australia has leaned on its “lucky country” reputation, luck that was largely driven by wealth derived from extracting vast mineral resources. However, the 2026 Denholm Review — formally titled Ambitious Australia — issues a blunt wake-up call. The nation’s R&D system is too fragmented and risk-averse to sustain future living standards. Chaired by Robyn Denholm, the report panel argues that Australia must transition into a “smart country” by overhauling how it funds, governs, and commercialises big ideas. Critics say that similar proposals have been around for 20 years and the real obstacle is government intransigence.
The review’s key recommendation is the creation of a National Innovation Council (NIC). Currently, Australian innovation is buried under 150 disparate government programs. The NIC would report directly to the Prime Minister and Cabinet, collapsing these programs into roughly 18 national strategic initiatives. This shift aims to replace grants with a unified national mission focused on critical sectors like net zero and deep tech with the goal of providing a unified national narrative and long-term oversight to ensure R&D efforts align with national strategic priorities.
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The report notes that a big hurdle for Australian startups is the “valley of death” syndrome, or gap where brilliant research fails to find the capital to scale. To bridge this, the review proposes three initiatives. Firstly, unlocking a portion of Australia’s $4 trillion superannuation fund pool for venture capital. Secondly, tax incentives in the form of modernising the R&D Tax Incentive (RDTI) to favour high-growth companies that stay onshore. Thirdly, compelling government agencies to act as “lead customers” buying Australian-made innovation to prove its viability to the world and help new companies to scale early.
Ambitious Australia also recognises that talent is the engine of the innovation system. To stop the “brain drain,” Denholm suggests raising PhD stipends considerably and creating “porous” career paths that allow researchers to move easily between universities and industry. Furthermore, it calls for universities to specialise in niche global strengths rather than trying to be “everything to everyone.” The review concludes with a stern warning against “cherry-picking” its 20 recommendations. The panel points out that the Australian innovation system is interconnected. So addressing one component without the others may lead to more exported talent and lost economic opportunities.
A graduate of both University of Sydney and UNSW, report author Robyn Denholm is famously known as “Elon Musk’s boss”. She was appointed chair of Tesla Inc. following a stellar career in financial and operational roles across both Australia and the United States. Denholm also previously acted as an operating partner with Blackbird VC, one of Australasia’s most active venture capital firms. She now sits on Blackbird’s board of directors, giving her a unique perspective into the financial architecture aspect of the innovation system. If Australia is to remain competitive, it must stop relying on luck and start investing systematically in its greatest resource: its brainpower, she maintains.
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