Turning Australia into a regional tech hub

The Tech Council of Australia (TCA) today launched a major report, Turning Australia into a Regional Tech Hub, which demonstrates the opportunities for Australia’s tech sector to grow by playing to its strengths.

Over the last three decades, Australia has created a strong and diverse tech sector that has launched globally successful companies, including Atlassian, Canva, Afterpay, WiseTech, SEEK, REA, Airwallex, Nearmap, SafetyCulture, Go1, Culture Amp, Employment Hero and more. Australia has also attracted some of the largest global tech companies and investors to our shores, helping to strengthen our local tech ecosystem.

“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”, Kate Pounder, CEO, TCA 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,” she said.

The report finds that five tech sector industries are already each worth > $30bn, and amount to ~72% of the Australian originated tech sector’s total value. These “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,” Ms Pounder said.

The report also highlights six ‘potential star’ segments that are on track to produce or attract Australia’s next globally successful companies, including Mining Tech, EdTech, Diversified Fintech, Gaming & eSports, Blockchain & Crypto and Augmented Reality / Virtual Reality.

A further 13 areas were identified as having high potential for Australia to become globally competitive, such as quantum, AgTech and Energy Tech, but need improved access to funding, skills or other strategic actions to help them grow.

Kate 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 start-ups overall. The standout areas are Mining Tech, where Australia has 8.2% of global start-ups, followed by Quantum Tech (3.2%), Lending Tech (3.4%), AgTech and Food Tech (2.8%) and Construction Tech (2.7%).

Australian VCs invest more in Business Software, PayTech and Diversified Fintech relative to global VC funding allocations. This has contributed to these areas becoming sources of comparative advantage for Australia, building on other factors such as their global sales models, their ability to scale quickly, access to cloud computing infrastructure, and strong local ecosystems and capabilities. Four Australian tech sector segments are also securing a strong share of global VC funding for their industry: Quantum Tech, Lending Tech, Energy Tech and Media & Design.

However, by comparison to global VC funding trends, Australia invests less in key areas such as Artificial Intelligence / Machine Learning and Life Sciences.

The report recommends three key actions to ensure Australia continues to create and attract global tech companies. They include 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 launch of the report coincides with the announcement of the Australian Quantum Alliance, an important new group within the Tech Council. The report shows that the world is betting on the success of Australia’s quantum sector, which attracts a 3.6 percent share of global quantum VC funding, much higher than our 1.6 percent share of GDP. Australia is also home to 3.8 per cent of global quantum start-ups.

The report has been authored by the Tech Council of Australia. The Tech Council would like to thank McKinsey & Company whose research helped inform this report, and acknowledge AirTree and Techboard for their contribution of data.

Media contact:
Sofia Polak
0434 275 449


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