Rupert Taylor-Price, Founder and CEO of Vault Cloud
Australia’s Greatest Innovation Opportunity: IT Sovereignty
Rupert Taylor-Price, Founder and CEO of Vault Cloud
Fostering innovation in our local technology sector can only lead to a safer,
stronger, more prosperous Australia.
The COVID-19 pandemic has woken up Australians to our vulnerability as an island state that is heavily dependent on global supply chains for everything from video-conferencing capabilities to vaccines and personal protective equipment. We are in an excellent position to drive innovation and commercialisation of our domestic capability and uplift local industry, but urgent action is required across government investment, policy, legislation, and tax reform.
We must better prepare ourselves for such macro events, be they future pandemics, geo-political warfare or the impact of climate change. Bolstering our local IT sector is critical not only for economic growth but also our national security. Cyber is the new frontier of warfare and Australia’s fleet is quite small compared to other countries. Imagine if foreign bad actors were to gain control of our power stations or aviation systems? It could make COVID-19 look quite trivial in comparison, and these are real and growing concerns.
A tremendous economic opportunity
The technology sector is equivalent to Australia’s third biggest sector, just behind mining and banking, contributing $167bn to our GDP (around 8%). Jobs in the sector have grown twice as fast as average employment over the last decade, making tech a critical pillar of our economy.
However, while Australia ranks well for technology ideation and adoption — for example, most Australian businesses now use cloud services such as Vault Cloud – we are seriously lagging behind when it comes to innovation and domestic production. A report by Accenture for the Tech Council of Australia into the economic contribution of Australia’s tech sector found that Australia ranked 36th out of 38 in the OECD for its ICT trade balance. We can certainly do much better.
Historically, there has been a tendency to look overseas, even when the Australian solution is actually better. We don’t seem to embrace our local technology, despite the fact that our procurement arm is enormous, and this has stifled innovation. Government investment in the industry seriously lags behind other nations at only 8%, compared to over 80% in the US. The industry would like to see 30% as a minimum benchmark.
Building Australia’s Silicon Valley
We have all the right ingredients to be a global powerhouse when it comes to IT innovation – an advantageous geopolitical position, a well-educated and relatively affluent population, political stability, and a skilled and creative workforce. There is absolutely no reason why Australia shouldn’t have its own Silicon Valley, with all of the economic growth that would entail. Furthermore, it would secure our ability to attract the best international talent into the future, rather than risk losing our best people to overseas opportunities.
A growing number of Australian companies have developed beyond the start-up phase to become internationally competitive while supporting economic growth and jobs at home. Among these success stories are well-known companies such as Atlassian and Afterpay and emerging firms such as Willow, Culture Amp and AgriDigital. Many more are waiting in the wings for their chance.
The answer lies not in blocking global innovation and technology – such as in the case of Huawei – but in lifting up the capability of Australia by proactively addressing challenges.
So, how do we do this? What’s required is leadership, capital, tax reform, legislative changes, policy making, and the proactive use of government buying power. We need to better balance the needs of our sovereign capability with leveraging the benefits of global innovation.
While all these represent major challenges, bolstering innovation in the Australian technology sector is pure opportunity. It can only create a safer, more prosperous Australia that has greater domestic capability, more jobs, and a booming economy. Success follows success.
Getting asked what we look for in deals is one of the most common questions I get as an investment manager.
The Small Business Association of Australia is dedicated to supporting SMEs, acting as their voice to government and helping them connect, grow, and prosper well into the future.
Sensibles may sound like science fiction, but this revolutionary technology is making waves in aged-care facilities, and has the potential to transform health monitoring at scale.
Alice Springs and the deserts of Central Australia don’t sound like a food basket, but they are for businesswoman and bush foods innovator Rayleen Brown.
A new report aims to lay the foundations for a deeper and more meaningful and equitable relationship between Indigenous and non-Indigenous Australians in the mining transition sector.
If the health and medical research sector in Australia is to move forward, it must address gender equity, diversity, and inclusion- which means making the sector a safe and inclusive workspace for all.
A ground-breaking sheep technology system is bettering the businesses and lives of Australian sheep breeders thanks to a revolutionary combination of software, hardware, and support never before combined into one cohesive unit.
ANCA took an early view to look beyond Australia’s shores whilst developing advanced manufacturing technologies now viewed as ‘business as usual’
As Australia grapples with a critical skills shortage, many are now encouraging young people to embrace a career in the trades, where a wealth of opportunities awaits.
In 2016 I published a blog article titled Moonshots for Australia: 7 For Now. It’s one of many I have posted on business and innovation in Australia. In that book, I highlighted a number of Industries of the Future among a number of proposed Moonshots. I self-published a book, Innovation in Australia – Creating prosperity for future generations, in 2019, with a follow-up COVID edition in 2020. There is no doubt COVID is causing massive disruption. Prior to COVID, there was little conversation about National Sovereignty or supply chains. Even now, these topics are fading, and we remain preoccupied with productivity and jobs! My motivation for this writing has been the absence of a coherent narrative for Australia’s business future. Over the past six years, little has changed. The Australian ‘psyche’ regarding our political and business systems is programmed to avoid taking a long-term perspective. The short-term nature of Government (3 to 4-year terms), the short-term horizon of the business system (driven by shareholder value), the media culture (infotainment and ‘gotcha’ games), the general Australian population’s cynical perspective and a preoccupation with a lifestyle all create a malaise of strategic thinking and conversation. Ultimately, it leads to a leadership vacuum at all levels. In recent years we have seen the leadership of some of our significant institutions failing to live up to the most basic standards, with Royal Commissions, Inquiries and investigations consuming excessive time and resources. · Catholic Church and other religious bodies · Trade Unions · Banks (and businesses generally, take casinos, for example) · the Australian Defence Force · the Australian cricket teams · our elected representatives and the staff of Parliament House As they say, “A fish rots from the head!” At best, the leadership behaviour in those institutions could be described as unethical and, at worst….just bankrupt! In the last decade, politicians have led us through a game of “leadership by musical chairs” – although, for now, it has stabilised. However, there is still an absence of a coherent narrative about business and wealth creation. It is a challenge. One attempt to provide such a narrative has been the Intergenerational Reports produced by our federal Government every few years since 2002. The shortcomings of the latest Intergenerational Report Each Intergenerational Report examines the long-term sustainability of current government policies and how demographic, technological, and other structural trends may affect the economy and the budget over the next 40 years. The fifth and most recent Intergenerational Report released in 2021 (preceded by Reports in 2002, 2007, 2010 and 2015) provides a narrative about Australia’s future – in essence, it is an extension of the status quo. The Report also highlights three key insights: 1. First, our population is growing slower and ageing faster than expected. 2. The Australian economy will continue to grow, but slower than previously thought. 3. While Australia’s debt is sustainable and low by international standards, the ageing of our population will pressure revenue and expenditure. However, its release came and went with a whimper. The recent Summit on (what was it, Jobs and Skills and productivity?) also seems to have made the difference of a ‘snowflake’ in hell in terms of identifying our long-term challenges and growth industries. Let’s look back to see how we got here and what we can learn. Australia over the last 40 years During Australia’s last period of significant economic reform (the late 1980s and early 1990s), there was a positive attempt at building an inclusive national narrative between Government and business. Multiple documents were published, including: · Australia Reconstructed (1987) – ACTU · Enterprise Bargaining a Better Way of Working (1989) – Business Council of Australia · Innovation in Australia (1991) – Boston Consulting Group · Australia 2010: Creating the Future Australia (1993) – Business Council of Australia · and others. There were workshops, consultations with industry leaders, and conferences across industries to pursue a national microeconomic reform agenda. Remember these concepts? · global competitiveness · benchmarking · best practice · award restructuring and enterprising bargaining · training, management education and multiskilling. This agenda was at the heart of the business conversation. During that time, the Government encouraged high levels of engagement with stakeholders. As a result, I worked with a small group of training professionals to contribute to the debate. Our contribution included events and publications over several years, including What Dawkins, Kelty and Howard All Agree On – Human Resources Strategies for Our Nation (published by the Australian Institute of Training and Development). Unfortunately, these long-term strategic discussions are nowhere near as prevalent among Government and industry today. The 1980s and 1990s were a time of radical change in Australia. It included: · floating the $A · deregulation · award restructuring · lowering/abolishing tariffs · Corporatisation and Commercialisation Ross Garnaut posits that the reforms enabled Australia to lead the developed world in productivity growth – given that it had spent most of the 20th century at the bottom of the developed country league table. However, in his work, The Great Reset, Garnaut says that over the next 20 years, our growth was attributable to the China mining boom, and from there, we settled into “The DOG days” – Australia moved to the back of a slow-moving pack! One unintended consequence of opening our economy to the world is the emasculation of the Australian manufacturing base. The manic pursuit of increased efficiency, lower costs, and shareholder value meant much of the labour-intensive work was outsourced. Manufacturing is now less than 6% of our GDP , less than half of what it was 30 years ago!
