This is a seminal moment in time for Australia.
Technological disruption is accelerating and impacting every industry without regard to social consequences. Industries that account for almost a third of Australia’s GDP today are on the firing line, challenged by companies using technology to leverage their global scale, access new datasets, erase industry boundaries and invent new industries.
Unless we act now, these shifts have the potential to stall Australia’s economic growth, render whole industries uncompetitive and lead to increasing long-term unemployment across the nation. It may sound alarmist, but Australia needs to face reality. The choices we make this month and this year will impact our generation and the ones to come, in other words, our prosperity and place in the world.
Over the last 12 months, there have been some positive changes in public policy and new funds allocated for high-risk technology based investments. Australian technology startups have made progress. But compared to what’s happening in the rest of the world, Australia is falling behind. We must do more, and do it quickly.
This past year we have seen many talented Australian entrepreneurs make the gut wrenching decision to leave family and friends and move to Silicon Valley. They do it because they cannot find enough people in Australia willing to invest in their technology, and because the environment in Australia is still not conducive to building large scale, technology based companies. Thankfully there are some world-class technology based businesses that are being spawned domestically, but there are not nearly enough of them.
During our lifetime, every industry and every business will evolve to become a technology and data-driven business. The tech entrepreneurs who have left Australia, and their equally talented counterparts still in Australia are the key to our future. They are part of the solution to the problems we are experiencing from this digital disruption.
Platform Economics is the term for the new structure underpinning data-driven businesses which is unlike anything we’ve experienced before. Platform economics fuels the growth of Apple, Google, Amazon and most other global companies. The value of these companies is derived, in large part, from the structured data the platform produces and the insights gained by analysing these data sets. Every industry will need to migrate to a platform in order to survive. Platform businesses are global, scale driven and have “winner take all” dynamics. A recent report published in the US noted that the leader in these new sectors typically captures 76% of that market’s value. There aren’t any second chances and Australia is about to be shut out if it does not make immediate changes in its support of technology-based businesses.
Developing countries throughout the world are responding with speed and conviction by implementing policies and programs to stimulate and support high-growth technology-based businesses. They are retooling their workforce by developing entrepreneurial skills. China for example just announced a $6.5B fund for new technology-based ventures. Obama has come out and declared a national goal – for the USA to be the world leader in Artificial Intelligence and machine learning, which will touch every industry in the US in coming years. Australia needs to do the same and it needs to create the conditions that will spawn new billion dollar technology based industries and businesses.
Australia is unique and needs to play its own game. Rather than trying to be another Silicon Valley, Australia needs to identify what economic levers work in other countries, decide which are applicable to Australia, and then shape these to accelerate Australia’s economy. We need strong, coordinated leadership that cuts across industries and political ideologies.
We are not the only country facing these disruptions, but how we choose to respond is entirely in our hands. Technology-driven change is exponential. If Australia passes the point of no return, it could easily be relegated to a derivative economy.
Australia is full of incredibly talented people. We have world-class academics, applied research and enterprise institutions. As a nation we have a will to succeed. We can change our destiny – if we take action now and focus our efforts on making the required changes – in thinking, priorities, policies, and behavior.
This Crossroads Report 2015 is a credible, action-oriented plan that identifies structured programs that will help ensure we get to where we need to be. It is a combination of original thought and identification of effective initiatives that have been proven to work elsewhere in the world. This Crossroads Report 2015 is also a call to arms, to everyone to get involved in shaping the solution through constructive conversations, debates and by holding politicians and stakeholders accountable for concrete action.
I hope that the Australian private and public sectors realise the severity of Australia’s current situation and will effect the necessary structural, societal and cultural changes needed. We are a country with incredible creativity, resilience and fight, but too few realise our economic future is in jeopardy. This is a critical moment in time. We cannot accept the status quo, but must make changes to support technology-based businesses and create a brighter future for ourselves, our country and the next generations.