Lobby group The Tech Council of Australia (TCA) is looking to take the battle up to Singapore, China and Japan in making Australia the regional tech hub for the Asia-Pacific region, attracting global players to the country.
A new report commissioned by the TCA, Turning Australia into a Regional Tech Hub, outlines the existing strengths the nation has in building major tech companies such as Atlassian, Canva, WiseTech, SEEK, REA, and others. Outposts established by global tech companies and investors also strengthen the local tech ecosystem, TCA CEO Kate Pounder argues
“This report demonstrates how the tech sector can play a major 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 ($1Bn+ companies) have already been founded in Australia, even though our global share of GDP is just 1.6%. By better understanding and focusing on our relative strengths, Australia can create and attract more global companies, create thousands of new jobs, and truly turn Australia into a leading regional tech hub.”
The report recommends three key actions, including setting a clear vision of Australia’s comparative advantage to drive public and private sector engagement; improving Australia’s foundational policy settings in areas like skills and talent, investment and regulation that will help all segments flourish; and taking action to address sector specific market failures in high-potential areas that are impacting their growth, such funding gaps.
The report finds that five tech sector industries are already each worth more than $30 billion, and amount to around 72% of the sector’s locally created total value.
Those “headstart” areas are business software, biotech, medical devices, media & design, and paytech.
“The strength of these segments show that the software industry has been one of the most successful new industries created in Australia in decades,” Pounder said.
The report picks six ‘potential star’ segments as pathways to success, including mining tech, edtech, diversified fintech, gaming & esports, blockchain and crypto, and augmented reality/VR.
Another 13 sectors have high potential to become globally competitive, according to the report, including quantum, agtech and energy tech, but need improved access to funding, skills or other strategic actions to help them grow.
Quantum is among the sectors identified by the NSW government and former federal government as key priorities for support.
The TCA report shows that the world is betting on the success of Australia’s quantum sector, which attracts a 3.6% share of global quantum VC funding, much higher than our 1.6 percent share of GDP.
Australia is home to 3.8% of global quantum startups.
The report also drilled down into where Australian venture capital is placing its bets, relative to global VC funding allocations, and business software, paytech and diversified fintech stand out.
Pounder said the report also sheds new light on which segments of the tech sector are most successful at attracting funding, and creating new companies.”
There are 18 segments where Australia’s share of global start-ups is higher than its share of startups overall. The standout 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 tech sector segments are also securing a strong share of global VC funding: quantum, lending, energy and media & design.
But there are areas where Australia lags global investment trends, including artificial intelligence/machine learning and life sciences.
The launch of the report coincides with the TCA’s launch of the Australian Quantum Alliance.
The Turning Australia into a Regional Tech Hub report can be downloaded here.
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