Calling out the state of Australia’s home-grown IT sector


On the eve of CeBIT Australia, the article by Asher Moses in today’s Sydney Morning Herald (“Children of the Revolution”,  http://bit.ly/L5XEFB) provides an insight into why Australia is probably not a tech-savvy country.

It’s worth a read, even if you read this from somewhere other than Australia.

Also today, Australian Federal Opposition communications spokesman Malcolm Turnbull calls for multinational IT companies to pay more tax in Australia (today’s Australian Financial Review, “Make Google Pay More Tax: Turnbull”, http://bit.ly/JITNDs).

Methinks he misses the point, and the Government, too. Turnbull is quoted in Moses’ article in the Herald as asking people to contact him with policy ideas to boost home-grown IT companies. I doubt calling for larger tax contributions per se sends the right message. The call for appropriate income tax from multinationals is a conversation about appropriate offset tax contributions, something that every IT multinational operating in Australia is well aware of. The ATO is good at working with these organisations to rectify any oversights that need fixing, and everyone moves on.

And Turnbull’s opposition position on the National Broadband Network (NBN), that it’s unnecessarily expensive and unnecessarily over-engineered (I simplify here), doesn’t help.

But I think the point about IT in Australia is more subtle. The industry, and those seeking to make their mark, simply won’t wait for policy to catch up. Unless the opportunities are immediately right for home-grown development, they will go elsewhere (per Moses’ article) and for a number of reasons, not just reasons of investment.

My former employer, software company Altium, is now based in Shanghai for reasons of market opportunity, that opportunity being that China is set to become a world design hub, not just a world manufacturing hub. Why stay in Australia?

And there’s cultural thread running through this argument too, a subtle complacency that allows us to continue to rely on primary and natural resources because they continue to deliver economic growth each year, and perhaps an assumption that we sort of don’t quite deserve to develop successful IT companies here.

But that fundamental economic model is based on driving mining efficiency to an ultimate point of maximum return, and a reliance on contracts with other parties. Once the efficiency has been achieved, there’s nowhere else to go. Once the customers for the ore have had their fill, there’s no-one left to turn to.

IT is unique in requiring just one thing: clever minds. There’s no national barrier that hems such minds in, and there’s no barrier to exporting the products created by these minds. None of the businesses described in Asher Moses’ article relies on much physical infrastructure. And they have chosen to base themselves elsewhere not because of market size (they are all tapping a global market) but the sense that Silicon Valley will support them with finance and that elusive, intangible can-do vibe.

So it’s about the willingness to take risks, the perception of the advantages of one environment (Silicon Valley) over another (Australia) based on the reality that sits underneath.

Those working in IT in Australia just know that it’s easier and quicker and better to develop ideas and businesses somewhere else.

Which is a shame. To those who are building IT businesses here, please stay!

About alansmithoz

Head of Strategic Business Communications at Australian social analytics technology company Digivizer, with a background in corporate public relations and marketing. I do what I do because I believe communications can make a difference.
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