The Australian tech sector is of significant importance and value to our national economy, currently contributing circa $167 billion per annum and representing 8.5 per cent of GDP.
But is our government doing enough to not only support this sector, but what’s required to ensure it thrives and Australia is seen as a nation that’s innovative and a leader in tech?
For a country to become (and remain) competitive globally, innovation is crucial. A country’s innovation includes its government, fiscal and education policies, and innovation environment (innovation inputs) as well as its patents, technology, business performance, and economic growth (innovation outputs). The latest annual Bloomberg Innovation Index of 60 nations places Australia 19th in the rankings. South Korea, Singapore and Switzerland make up the top 3.
If Australia is serious about developing a thriving innovation ecosystem it must adopt a far stronger focus on the big picture and long-term goals of the country.
It has become ever difficult in both Australia (& New Zealand) to not only attract, but to also retain tech talent. A range of studies over recent years indicate in excess of 90% of businesses are facing skills shortage problems. This lack of available talent then goes on to create growth problems for many Australian businesses.
The pandemic saw high numbers of skilled workers on visas returning to their home countries, many due to the lack of support from our government. Despite our borders beginning to open up again, strict immigration regulations continue to make it difficult to attract tech talent from overseas. It’s not only a substantial fall on inbound talent that’s creating the issue. Home-grown Australian talent continues to be poached overseas with very attractive packages and incentives. Some will wonder if remote working opportunities could be leveraged to help resolve some of these talent pool issues, but many of these roles at the top end of the pool cannot be filled remotely due to data sovereignty requirements.
The issues faced by the tech sector aren’t all about a lack of immigration, attracting the right talent or keeping talent in the country.
Australia is pretty average when it comes to nurturing tech talent from year 12 through to university and other higher education. And, once in higher education, our student completion rate in tech is a major cause for concern. In 2020, 20,160 Australian students started tech degrees, but it is expected that a meagre 33% will complete them. Take this one step further too; 65%+ of people studying an Australian tech degree are international students, and greater than 50% of that group will leave the country as soon as they are trained.
Of all the Organisation for Economic Co-operation and Development (OECD) countries, Australia is training the least amount of its citizens for tech related jobs. Poland performs better than Australia at tech graduation figures annually.
Combine all of these issues and what we get is the result that Australia, at present, is depending on an impossibly small group of tech talent, unable to fill anything near the volume of roles and work available. And that talent tends to move around, a lot, constantly on the hunt for the next big thing, meaning an intellectual hole is left after their departure, as they leave with extensive institutional and technical knowledge. This high rotation of tech employees impacts technology teams as well as business leaders. Business leaders require the best talent to build great products and achieve competitive advantage, while technology teams face significant challenges luring and retaining the resources they need to build, scale, run and maintain their applications to a high standard.
The Australian government is seemingly addicted to the resources and construction sectors, often paying little attention to the tech sector. Historically our immigration system has favoured low paid workers, performing jobs everyday Australians don’t want to do, instead of starting to look at building significant talent pools in tech and offering pathways for permanent settlement for these highly skilled resources and their families.
At present, we are ill-prepared as a nation to not only embrace technology as a future key sector but to understand our lack of innovation in the space and what that does to the wider economy as a result. The tech sector received next to no assistance in the latest budget, despite experiencing one of the greatest skills shortages in history.
What Can The Government Do?
It is predicted that 1 million Australians will be employed by tech companies by 2025, if the talent exists in the country. Our government must support skills development in our existing workforce, along with looking at our education sector to ensure those looking to enter the tech space are being educated properly and appropriately with the right skills that employers need.
Our government could be doing much more on skills shortages in the short term, while fixing the education system over the mid-term. The skilled migration program needs desperate evolution. The GTES (Global Talent Employer Sponsored) visa process could be vastly enhanced for tech companies. And the TSS (temporary skill shortage) visa should be much more widely available to those in tech.
Tax incentives would also help fuel the sector further. Traditional tangible assets get a win through the instant asset write-off scheme but could also be considered for tech-led productivity such as software builds.
We can incentivise young people to study degrees that build pathways into the technology sector. We could be offering annual cash incentives to those with a high ATAR and choosing to study suitable degrees for each year of study.
With a range of immediate, near, mid and longer-term strategies, our government can not only help to resolve the skills shortages that exist in tech, but also boost our nations standing on the Bloomberg Innovation Index and change the reputation Australia has in the global tech community, becoming one that is highly attractive and desirable, and one that flourishes as a result of that enhanced approach.