As Australian politicians debate how to spur the economy and where to direct government investment, they could do worse than to listen to the stock market. Economists have long considered it a leading indicator; it’s essentially a bet on the future. So what is the market saying?
That market is fairly shouting that one part of the economy holds more growth potential than any other. And yet it’s a sector that’s been hardly mentioned in this election campaign: Technology.
Just looking at the past year, investors have pushed up the ASX 200 index about 4 percent. Not bad, but hardly a ringing endorsement of Australia’s economic future. In that same span, the ASX’s Information Technology sub-index has surged 27 percent. No other industrial sector of the market comes close. Even Health Care, the next fastest segment, only grew at one-third the pace.
With this in mind, we wanted to explore how the next government could ensure our most promising economic sector gets the attention it deserves. We spoke to some of our 700 app partners. They make software that integrates with Xero to serve small businesses. These partners range from brand-new startups to those attracting international investment, such as workforce-management app Deputy.
One common thread ran through their responses: We need a Minister for Technology.
“We need someone who can plan for the next 50 years,” said Spotlight Reporting’s chief sales officer, David New. “I’m not kidding.”
We couldn’t agree more. A Minister of Technology would ideally transcend politics and be appointed for the duration of a government, similar to the PM’s special adviser on cybersecurity. If there’s one thing both sides agree on, it’s the need for jobs that will create our increasingly automated, digital world – regardless of who resides at the Lodge.
If Australia’s digital economy were an industry, it would be larger than agriculture, transport or retail, according to Deloitte. It’s time to recognise that with a dedicated person in Canberra who is essentially a chief technology officer for the nation. We believe the prime minister should appoint a passionate, senior tech leader who wants to give back. Someone who can identify the big issues of the day, own a national Australian tech strategy and attract overseas companies.
Success here would strengthen our economy and, importantly, deepen the talent pool. And a tech minister could ensure that the high-growth companies with global customers, like Atlassian, don’t move offshore due to lack of opportunity here.
This minister would speak for the whole country and offers assurance about federal policy in the tech sector. He or she could offer clarity around the R&D tax incentives (and create more incentives), and push for investment in STEM education.
Follow the sun
With today’s cloud-based technology, Australia’s geographic isolation is less of an obstacle to attracting overseas companies. In fact, it can be an asset to those that “follow the sun” with their operations, working at a 24/7 pace.
Sydney, Melbourne and Brisbane have already figured this out. They’re competing to attract and nurture tech companies. Melbourne bills itself as Tech City while Sydney claims the biggest tech startup ecosystem in Australia. Brisbane meanwhile pitches itself as the upstart: “Sorry, Sydney and Melbourne — here’s why Brisbane is better.”
When we look at our landscape, with its golden hills, eucalyptus trees and mild climate, it’s hard to miss a passing resemblance to California. There’s no reason we can’t build a Silicon Valley here. If Silicon Valley were a country, it would be the richest on earth, with residents producing nearly US$130,000 per capita in annual GDP. That’s the kind of environment we want to create in Australia.
There’s a real opportunity for the next government. The benefits of appointing a Minister for Technology would accrue not just to investors, but to the youngest generation of jobseekers who are navigating an increasingly digital landscape. If we miss this chance, others countries will undoubtedly seize it. Let’s shape our future for the benefit of every Australian.