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Australia’s Economic Future Rests in High-Tech Innovation

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shutterstock_110678570The end of the mining boom poses significant challenges to Australia’s economy and its labour market. According to arecent story in CIO, many tech leaders and industry observers believe that the answer lies in technical intellectual property. Some have suggested that building a strong tech sector is the best way to counter the end of the resources boom.

Foreign investment and exports

Australia should work towards building up its $800-million exports in the software sector to match the billion-strong numbers of the mining sector. That’s according to Dean Economou, technology strategist at NICTA, Australia’s Information and Communications Technology Research Centre of Excellence.

Economou points to the US’s Unitrends, which recently acquired Yuruware, a cloud-based disaster recovery software program developed by NICTA. He suggests that the acquisition was an example of valuable exporting of local IP know-how, and the growing of local jobs rather than a brain drain.

Economou emphasises the fact that the Yuruware software team will remain in Australia. Unitrends’ strategy has been to continue its expansion into the Asia-Pacific region, which meant that a local office, complete with technical-support and development teams, would prove to be invaluable.

Economou notes that the US company is still employing Australians and investing in the expansion of the local operation, even while it looks to exporting the software. Australia has a well-trained and educated labour market that’s conducive to a technology sector that could be fully realised with enough foreign investment.

The importance of the cloud

Cloud-based technology is also important for delivering services and products to a global market. The scalability and cost effectiveness of the cloud allows Australian enterprises to set up platforms that can quickly service international markets, so that businesses can sell to anyone in the world.

High-tech manufacturing

While many observers have focused on software development, high-tech manufacturing could be another important sector to foster. According to Geoffrey Spinks, an expert on electromaterials science, the country has all the skills and capacity required to build a niche manufacturing, high-tech sector that adds jobs to the economy.

As an example, Spinks listed Cochlear, the hearing-implant manufacturer that commands 70% of the global market. Spinks has argued that a vibrant innovation system that encourages research and development of products such as biomedical devices, nanomaterials, and other high-tech, high-value products could drive this new and emerging sector.

Cultivating a start-up culture

According to a recent report by PwC and commissioned by Google Australia, Australia could have as much as 4% of its GDP (or $109 billion) powered by high-growth companies in the tech sector by 2033.

That would equate to 540,000 jobs. Currently, high-growth tech companies account for just 0.2% of Australia’s GDP. Fostering a start-up culture that encourages entrepreneurialism and venture capitalism would support a strong tech sector.

Innovation

Innovation will be key to realising a tech sector that could replace the mining industry. An example of a local tech company successfully pursuing innovative products is HubCare. HubCare produces software that connects families with education, government, and other essential support services through a single Internet-based portals. Users can access numerous agencies through the one portal, to manage their information, services, and access.

According to CEO Ruby O’Rourke, HubCare offers a unique solution that hasn’t been seen anywhere in the world. The system solves a number of problems simultaneously, by making it easier for the government to connect with the citizen and simplifying the process of accessing different government services from the user’s end.

HubCare can operate a stand-alone identity authenticator for all public services, but it has integrated analytics and machine-learning features that can be used for different applications. For example, the technology can be used to identify high-risk children that may need the attention of child-care protection agencies.

Challenges

While examples such as HubCare and the Unitrends purchase of a local company might highlight Australia’s potential, there remain considerable challenges for building a high-tech economy. According to Jeremy Liddle, Australian president for the G20 Young Entrepreneurs Alliance (G20 YEA), Australia has a risk-averse culture and currently ranks 16th for innovation.

A study by G20 YEA and Accenture found that as many as 10 million extra jobs for young people could be added by reducing barriers to entrepreneurship, which include lack of funding and skills shortages. Improving access to funding for young entrepreneurs, says Liddle, will be vital.

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