Tech sector says it could be worth $207ba year by 2030 – The Australian Financial Review


The tech sector has armed itself with a new report showing it could contribute up to $207 billion a year to the economy by 2030, as it battles for a more favourable policy approach from the government.

That figure would represent a 70 per cent mark-up from what the industry contributed in 2018 – $122 billion, according to the report – but it would only come to pass if the Morrison government engaged in a raft of reforms.

“Our current policy environment is a legacy of a previous era with fragmented and overlapping responsibilities across multiple government departments,” the report, titledAustralia’s Digital Opportunity,said.

The report, which the Digital Industry Group commissioned from research house Alphabeta, was chiefly critical of the size of the local technology sector and investment in it.

Alphabeta  said research and development spending as a portion of gross domestic productlanguished far below the average of other OECD nations.

At 1.9 per cent in 2015, the most current comparative figure, it is less than half that spent by other countries like Israel and South Korea.

The report put this down to an R&D incentive structure containing “a lack of clarity on how software development fits into this general definition”.

“The fast-paced, iterative software development process makes it difficult in some cases for these projects to comply with these R&D tax incentive requirements.”

The new ‘Australia’s Digital Opportunity’ report has argued for a more pragmatic and co-operative approach to tech regulation. Shutterstock.com

Alphabeta said the R&D incentive structure should be overhauled to provide tax benefits to companies who invent and turn a profit with new technologies they copyright.

The firm argued for a federal R&D grant program too.

Consistent regulation

Meanwhile, Alphabeta also warned against an overzealous approach to regulation after thecompetition watchdog’s scathing report into digital platforms and the use of consumer data.

“If new regulation is not well-designed, it can diminish the significant benefits the technology sector presents to consumers and the wider community,” the report said.

The report called on the government to harmonise the legal framework around digital technologies with other jurisdictions like the European Union and the United States.

It said Australia did not offer copyright safe harbour protections that are standard in those jurisdictions.

In the US, those protections allow right holders to notify online platforms of copyright-infringing content and give a time frame for the platform to take it down.

Moreover, Alphabeta said local laws and regulation lagged behind the status quo on data privacy rights, tax regimes to encourage investment and incentives for early-stage start-ups during testing.

Skills shortage

The skills shortage in the sector also came under fire from Alphabeta, with another report also putting it in focus on Thursday.

The Australian Computer Society annual digital digest report said there were not enough skilled workers to fill a coming jobs boom.

ACS said that an additional 100,000 tech workers were required by 2024, and the body’s president Yohan Ramasundara said it would be a challenge to fill this demand.

“Australia’s future prosperity in an increasingly digitised world will depend upon ongoing investment in emerging technologies and further development in the digital skills required to build, deploy and apply them,” he said.

While the ACS report was light on solutions, Alphabeta floated changes to the skilled migrant visas and increasing a visa category for entrepreneurs.

Alphabeta also said reduced barriers to offering employee share schemes would help attract workers to the industry.

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