Founder and CEO of software firm Local Measure Jonathan Barouch said the focus from both major parties on improving education and training was great, but that businesses also needed immigration policy to be loosened and pathways to permanent residency to be opened up for skilled tech workers.
“Getting aussies into the industry requires both education – typically tertiary – as well as experience. Both of these are very hard to do in the short and maybe medium term,” Mr Barouch said.
“That still leaves us with the short-term problem of engineers, designers, product managers, data scientists etc I don’t think getting these folks in now will undercut Aussies getting in roles. We need way more skilled talent here than we have. I think pathways for permanent residency and easy access visas, that aren’t tied to the employer like the 457, would be welcomed.”
AirTree Ventures co-founder and partner Craig Blair said Labor’s job summit was a big opportunity to work with the tech sector on the goal of reaching a million tech jobs by 2025.
He said improving the Global Talent Employer Sponsored program and the Temporary Skill Shortage visa schemes would help companies like Canva, Go1, Linktree and Immutable fill highly technical roles while levelling up the broader workforce.
“This would work by specifically developing a pipeline of skilled tech workers and revitalising the targeted skilled migration program,” Mr Blair said.
“With an expanding bedrock of sought after tech companies, Australia is becoming a priority destination for many overseas, highly qualified tech workers.”
Bigger seat at the table
Tech company owners and investors had supported Labor’s plan to create a new $1 billion tech investment fund during the election campaign, and now offered advice on how it should be structured, while also calling on the new government to reframe the national conversation about tech disruption.
Mr Gauci had previously criticised the Coalition government for under-cooking its investment in key areas like artificial intelligence, and said it was now looking forward to dealing with the new government on policy areas including critical tech development like AI and quantum computing.
He said Mr Albanese should expand the portfolio of Industry and Innovation, occupied by Ed Husic while in opposition, to create a cabinet position incorporating government services and the digital economy portfolio that Jane Hume had run for the Coalition.
This would focus on areas including modernising service delivery, tech regulation, liasing with industry on quantum and AI strategy, improving delivery of industry incentives like the Research and Development Tax Incentive (RDTI,) skills development and consumer data right policies.
“The AIIA is calling for a prominent role for digital government services delivery and the industry and innovation portfolios to receive a senior position in Cabinet,” Mr Gauci said.
“The challenge we have seen from the former government was a large turnover of industry and innovation ministers which led to a lack of understanding and leadership in an important area of policy for the economy.
“We have worked closely with Ed [Husic] while in Opposition and look forward to working with him as Minister. He is well-known and respected by the sector and wants to get things done. What I would say to Ed – and he gets this – is that he needs to consult and work effectively with industry to ensure success. The government needs to be agile in its execution of policy.”
Mr Gauci said the recent funding commitments for the innovation sector, digital skills and critical industries were “extremely pleasing,” but warned that government funding had been held up by bureaucracy in recent years and needed to be effectively deployed to be useful.
Managing director of big money venture capital firm OneVentures Michelle Deaker said partnering with the industry in a fund of funds capacity, rather than setting up as a competitive fund would be the most constructive way to engage. OneVentures recently landed the mandate to manage the Victorian government’s $30 million Venture Growth Fund.
“Spreading the funds with a number of managers will ensure that we develop a vibrant ecosystem. We would also support some funds being used to support early developing and new managers,” Dr Deaker said.
She agreed it would be important to appoint a senior cabinet member to the innovation portfolio, after it had previously been considered a “lesser portfolio.” She lamented that Malcolm Turnbull’s Innovation agenda at the start of his Prime Ministership had been a missed opportunity for the country to invest in the future, when it was de-prioritised for political reasons.
“Innovation and the creation of new industries for our country’s future should be a priority for every government. The innovation ecosystem and VC industry will welcome Labor’s focus,” Dr Deaker said.
“Perhaps COVID taught us the importance of innovation because the technology sector saved the workplace and innovation in healthcare has saved millions of lives.”
R&D incentive changes
Should he continue in the portfolio as expected, Mr Husic has indicated he will look at making the crucial RDTI scheme more friendly to software-based start-ups. The industry has advocated for changes after a number of local companies were stung with huge repayment bills, after previously granted payments were rescinded.
Dr Deaker said the start-up software industry had been unfortunately caught up in abuse of the RDTI by larger industries.
“”Once our leaders can create a clear path to participation in innovation, through education, re-skilling, and transition pathways, we’ll have a much easier time bringing the nation along for the ride.”
— Cheryl Mack, Aussie Angels.
“Confidence would come back in if the RDTI was less stringent on the ‘R’ for young emerging companies – perhaps those under $20 million in revenue,” she said.
“For these young companies, it may not be ‘deep technology research’ but it is innovation, and they are trying to do something new in their approach.”
Founder of Sydney-based quantum start-up Q-CTRL Michael Biercuk said the RDTI was an “exceptionally valuable program,” but that there was little doubt that it was ripe for abuse. He said the new government needed to approach the scheme differently, to make sure it was helping real upcoming innovators, rather than just providing financial benefits to well-established incumbent companies.
“I believe we need a final and abundantly clear conception of what’s in and what’s out in software development,” Mr Biercuk said.
“And I think government should be comfortable adding stricter research-activity and scale tests, so the benefits flow to emerging tech SMEs who are most likely to transform the economy and deliver prosperity broadly.”
Another suggested change from Square Peg Capital co-founder and partner Paul Bassat was to replace indirect support for start-ups via the RDTI with direct support at a similar funding level via grants.
He said this would likely be much simpler than the RDTI scheme and could be directed in a much more targeted fashion.
“The RDTI scheme has been administered in a complex and inconsistent way as it relates to software spend,” Mr Bassat said.
“The definition of eligible software spend is overly restrictive and has created enormous complexity and uncertainty over recent years.”
More positive innovation debate
Like other industry leaders spoken to by The Financial Review, Mr Biercuk was eager for the new government to take a more positive and inclusive tone when explaining the importance of its investment in tech to the general population.
He said Australians from all backgrounds needed to be shown that success in science, technology and innovation meant more jobs and better opportunities for everyone.
“In the last decade we’ve suffered two great tragedies in innovation policy. First, we’ve allowed science and technology to become a wedge political issue of Labor versus LNP and Turnbull versus Morrison,” Mr Biercuk said.
“Next, we’ve allowed “tech” to become synonymous with a handful of social media and e-commerce companies that accrue great wealth to a small slice of the population while using byzantine accounting tactics to avoid national taxation.
“Any change in government is a chance to hit reset on both fronts. But it requires more than government investment. It requires a change in the national conversation from all stakeholders … In quantum technology, of course we employ quantum physicists, but we also employ designers, marketing professionals, and accountants, and directly purchase locally machined custom hardware and locally manufactured electronics.”
Chief executive of tech angel investing operations firm Aussie Angels, and tech investor Cheryl Mack, said she was also hopeful that Labor’s election was a chance for tech and innovation to take a more prominent role in cabinet.
She said Mr Husic and Mr Albanese had to think carefully about how to bring more of the nation “along for the ride,” than had occurred under Malcolm Turnbull, and could not minimise the topic as had happened since.
“Considering our previous government felt that we should just be the best adopters of technology, rather than creators, it has been vastly underplayed since the Turnbull ideas boom era,” Ms Mack said.
“It starts with education, it won’t help to make promises about things people don’t understand in the first place. It also requires compassion and empathy, and understanding of the fear people have about tech and innovation.
“Once our leaders can create a clear path to participation in innovation, through education, re-skilling, and transition pathways, we’ll have a much easier time bringing the nation along for the ride.”
Mr Barouch said he believed both sides of politics had undervalued the impact of the technology sector on jobs and exports, as well as the importance of policy settings to drive local and foreign investment.
He was an active supporter at polling booths for defeated Liberal MP Dave Sharma in Saturday’s election, and is a member of the Liberal Party.
He conceded that innovation was a difficult political issue, saying industry and politicians had to get better at showing voters that it won’t kill traditional jobs.
“The new government has an opportunity to reset this narrative, particularly as the electorate has spoken about their desire to address Climate Change,” Mr Barouch said.
“I’d love to see the new government share their vision on how Australia could be a leader in green technology much like it has been in mining technology.”
Unlike the AIIA, Mr Barouch said it would be difficult to lump the digital economy and innovation responsibilities together with industry in a single government portfolio, because the areas involved were so broad.
“If we can’t have a Liberal Innovation Minister, I am okay with Ed Husic holding that position as my second choice,” he said.
“Under the previous Liberal government we had an Assistant Minister for Innovation which I think gave the role a full-time and dedicated member of government as it deserves.”
Tech Council of Australia CEO Kate Pounder meanwhile said she was looking forward to working with Mr Albanese and longstanding tech sector supporters in Labor’s ranks, including Mr Husic, incoming Treasurer Jim Chalmers, Tim Watts and Dr Anne Aly, on its plan to have 1.2 million Aussies in tech jobs by 2030.
“Australians want to see great, high-paid, secure jobs created here in Australia. And that is where the tech sector delivers in spades, being one of the biggest new sources of jobs in our economy,” Ms Pounder said.
“The Labor party took an ambitious technology platform to the election, and we were pleased to see the technology industry be such a significant feature of the campaign. Most importantly the incoming Prime Minister affirmed the Tech Council’s jobs goal for the sector.
“I am incredibly optimistic on the role of technology and innovation for Australia generally. I think we have a once in a generation opportunity to make Australia a tech powerhouse on the world stage.”