Australia suffers from an outdated "fear of failure" mentality that impedes risk-taking and must be shaken off if the country is to create the jobs of the future, according to Prime Minister Malcolm Turnbull's new innovation czar.

Industry, Innovation and Science Minister Christopher Pyne will on Tuesday announce Bill Ferris, regarded of the father of Australia's venture capital industry, as the new chair of Innovation Australia. The government is preparing to release a major innovation statement – encompassing changes to tax breaks, university research funding and the role of the CSIRO – early next month.

"There's a fear of failure we could do with a little less of": Bill Ferris is to be the new chair of Innovation Australia. Credit:Josh Robenstone

Mr Ferris told Fairfax Media that a cultural shift is needed for Australia to compete with Silicon Valley and other areas overseas where start-up companies are booming.

"There's a fear of failure we could do with a little less of," Mr Ferris said.