Can Australian Tech rescue the uncertain future of the economy? Part 1

With arguably the most important federal election in decades now over, I can’t but help lament over Prime Minister Morrison’s opening line in his speech, “I’ve always believed in miracles” and whether this is the current psyche for our country?

Before I get too deep into this, let me start by assuring you this is not yet another opinion piece on the state of our economy or politics in Australia, I think we are all tired of those. Rather it’s a timely opportunity to open a collective dialog on how we can think bigger about plotting our way to a more secure future.

However let’s start with some perceptions. People will say the Australian economy has done relatively well over the past few decades. Low unemployment and a sizeable increase in household wealth fuelled by rocketing house prices have made us feel pretty good about things right? Looking at the broader economy, we don’t ride off the sheep’s back as much as we used to as we’ve managed to diversify our output with growing services industry’s, not even the subdued resources sector hasn’t plunged us into disaster. As we Aussies like to say, “she’ll be right mate!”.

However as I look beyond the horizon of our big brown country, and across the oceans to the countries and continents I frequently visit, I find myself pondering the question “Will it really be right?”.

While we did manage to escape the worst effects of the Global Financial Crisis (GFC) ten years ago, there are a number of inconvenient truths that have been haunting our delicate economy. Almost three decades of rising house prices has not only left us with a great deal of our wealth locked up onshore, but high household debt and a tenuous property bubble.  After years of annual economic growth (GDP) around the 4 per cent range during the 1990s, for much of this decade we’ve had a 2 in front of it with negligible productivity improvements. Even recent figures showing a budget surplus aren’t anything to crow about as a bump in resources export have fortunately coincided with a reduction in local consumption. And there are now troubling signs that unemployment could be on the rise at a time when wage growth is persistently sluggish.

Taking a worldwide perspective, in a recent report by IMD on international economic competitiveness, Australia ranked 18th out of 63 economies, lagging in key areas such as tax rates, cost of living and even digital skills, which we consider ourselves quite good at, coming in at a surprising 44th place.   Looking deeper, we trailed countries with similar dynamics to ours like Canada, Ireland and Netherlands.  Even smaller neighbours like Singapore and Hong Kong have more compelling attributes in their economies.

I am no economist, but it seems obvious to me that as Australians, our path to sustained prosperity is far from assured. More than that, its apparent doing what we’ve done in the past is no sure bet to securing our future, and only real big picture thinking and deliberate actions are going to get there.

For the past 22 years, I’ve been fortunate to live in the fast moving microcosm of technology where I have witnessed and been involved in this industry reshaping economies and preforming the most amazing feats. For the past 15 of those years, I’ve travelled around all the corners of the United States and Asia, the epicentres where most of this has been happening.  I’ve watched Silicon Valley rebuild itself from the aftermath of the dot com crash into creating some of the most worlds most innovative companies. I’ve seen India’s stellar rise onto the world stage as Tech amounts to almost 8% of their GDP, creating millions of jobs and a rising middle class. I have worked with companies of all sizes, from consulting traditional multi-national companies break into new emerging markets to mentoring young start-ups launching their ideas to challenge old companies.   I have even tried it myself, building and launching my own start up, AirActive from scratch right here in Australia rolling up my sleeves and learn just what it takes.

What I have come to learn is that countries who have worked out how to connect and orchestrate their education sector, sources of financial capital and government institutions together in a self perpetuating way are the ones creating the most compelling economies today. 

Working deeply with organisations around the world which have made this happen, and speaking to colleagues and professionals in these same areas here in Australia, I am of the firm belief that we have all the necessary ingredients here today. As a proud Australian, I believe if we can codify these parts of our economy, coordinate them better behind a larger united purpose, and put some oomph into it, much like the interlocking gears of a machine, we can get moving in the right direction.

Starting with our world class tertiary education sector which produces tens of thousands of highly skilled technical labour each year, feeding them into an engine of entrepreneurialism will not only create streams of new and exciting jobs, but stop them from fleeing to other countries for opportunities. While we are not short on entrepreneurialism, these engines need capital to grow and lets face it this has been in short supply. By better educating those with sources of money where to invest in tech will help tap vast reserves of money currently locked up in traditional assets to fuel more ideas to commercialisation. Redeploying various pools of capital including high net wealth individuals and large managed funds like superannuation into early stage investment vehicles will act as a good kickstarter for startups, while consciously attracting more foreign investment into VC’s will help create the financial tailwinds necessary for companies with traction grow and go global just like our tech unicorns Canva and Atalissian. For both these things to happen, we need Government to think long term to establish the credibility and confidence for the economy to invest. Beyond looking to Canberra for more funding and tax breaks, we need all levels of government to look at broader ways in which they can contribute collectively.  For example, local governments should look at how they can create or repurpose community spaces into affordable places for new tech companies to get off the ground. State governments can crowdsource solving city and societal challenges by not only releasing more data, but incentivising and diverting budgets to local tech talent.  Federal government can do more to advertise Australia to the world not only as a great place to visit, but one to live and work, attracting world talent and even our own expats to come back.

Sure this isn’t easy, it will require us to challenge long held beliefs, look further afield for alternatives to our shortfalls, and must be an ensuring mission rather than a series of quick wins.  But most of all, as my good friend Glenn Gore says, it going to require a little bit (or more) Bravery.

Over the next few blogs, I plan to delve more deeply into all these areas looking at what other countries are doing that we can adopt or iterate on, share my personal experiences working with commercial and government organisations as they sought to tackle challenges and even propose a few thoughts of my own.  I ask that you don’t just like or share this post with others, while it will help garner more attention please leave your prospective ideas in the comments.  Our objective should not be to surface our inhibitors and blockers, but to draw the collective wisdom and ideas of this intelligent community to generate dialog of forward thinking ideas, debate them and maybe inspire some more urgent action. Rewiring our trajectory will take people from all walks of life, therefore we should not just hear from the technologists. I want to encourage those in education, finance, economics, government and others to slate their thoughts.  No matter how long you’ve been living in Australia, your perspectives are valuable.

In today’s world, Tech and the economy are inextricably linked to the long term wellbeing of established countries.  Australia is no different, one needs the other and now is the time to not only bring this into the nations psyche, but harness ideas into a concerted way. If we get this right the payoff will be huge, we will not only lift productivity back to healthy levels, but create jobs for our current generation and the next. We will export our companies to the world instead of our smartest people to build a more valuable economy.  And we will create new channels of revenue to invest in social services and infrastructure to secure the prosperity for generations to come.

Disclaimer: The opinions reflected in the piece are my own and not reflective of the views of my employer.