Lobbying group The Tech Council of Australia (TCA) wants to compete with Singapore, China and Japan to make Australia the regional tech hub for the Asia-Pacific region, bringing global players to the country.
A new report commissioned by the TCA, Turning Australia into a regional tech huboutlines the existing strengths the country has in building large tech companies such as: Atlassian, Canva, WiseTech, SEEK, REA and others. Outposts founded by global tech companies and investors also bolster the local tech ecosystem, says TCA CEO Kate Pounder
“This report shows how the technology sector can play a significant role in the growth of Australia’s future industries, which is a key focus of the government’s Jobs and Skills Summit,” she said.
“2.3% of the world’s tech unicorns ($1 billion + companies) are already founded in Australia, even though our global share of GDP is just 1.6%. Through better understanding and by focusing on our relative strengths, Australia can create and attract more globally businesses, create thousands of new jobs and truly make Australia a leading region technical hub.”
The report recommends three key actions, including a clear vision of Australia’s comparative advantage to stimulate public and private sector involvement; improve Australia’s fundamental policy institutions in areas such as skills and talent, investment and regulations that will help all segments thrive; and take action to tackle the sector specific market failures in high-potential areas that affect their growth, such as funding shortfalls.
The report finds that five sectors of the technology sector are already worth more than $30 billion each, accounting for approximately 72% of the sector’s locally created total value.
Those ‘leading’ areas are business software, biotech, medical devices, media & design and paytech.
“The strength of these segments shows that the software industry has been one of the most successful new industries to emerge in Australia in decades,” said Pounder.
The report picks six “potential star” segments as paths to success, including mining technology, edtech, diversified fintech, gaming and esports, blockchain and crypto, and augmented reality/VR.
A further 13 sectors have great potential to become globally competitive, including quantum, agtech and energy technology, according to the report, but need better access to funding, skills or other strategic actions to help them grow.
Quantum is one of the sectors identified by the Government of NSW and the former Federal Government as the top priorities for support.
The TCA report shows that the world is betting on the success of the Australian quantum sector, which picks up 3.6% share of global quantum VC funding, much higher than our 1.6 percent share in GDP.
Australia is home to 3.8% of global quantum startups.
The report also delved into where Australian venture capital is placing its bets, with regard to global venture capital financing allocations, and enterprise software, paytech and diversified fintech stand out.
Pounder said the report also sheds new light on which segments of the technology sector are most successful at raising finance and creating new businesses.”
There are 18 segments where Australia’s share of global start-ups is greater than its overall share. The notable areas are mining tech, where Australia has 8.2% of global startups, followed by quantum (3.2%), lending (3.4%), agriculture and food (2.8%), and construction (2. 7%).
Four Australian technology sector segments also ensure a strong share of global VC financing: Quantum, Loans, Energy and Media & Design.
But there are areas where Australia is lagging behind global investment trends, including artificial intelligence/machine learning and life sciences.
The report’s launch coincides with the TCA’s launch of Australia’s Quantum alliance.
The Turning Australia into a regional tech hub report can be downloaded here.