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Aussie tech firms could add $109b to economy

Date

Miles Godfrey

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"It's never a better time to be a tech entrepreneur": Alan Noble, Google.

"It's never a better time to be a tech entrepreneur": Alan Noble, Google.

Tech start-ups could add $109 billion to the Australian economy and create 540,000 new jobs by 2033, according to a new report commissioned by Google.

But that sort of growth – equivalent to a 4 per cent rise in GDP – will only be achieved if high schools start producing more computer science graduates with never-say-die entrepreneurial skills, experts have warned.

"A strong home grown tech sector is vital to future Australian jobs and wealth," Google Australia's engineering director Alan Noble said.

"It's never a better time to be a tech entrepreneur, but we need to act now so that we become a nation of creators and innovators."

There are currently about 1500 tech start-ups in Australia, with 64 per cent in Sydney, 24 per cent in Melbourne and the remainder in Brisbane, Perth, Canberra and Adelaide.

Those companies, mostly in the telco and media sectors, contribute 0.1 per cent of GDP and about 9500 jobs.

But consultants PwC said those totals could rise dramatically within 20 years if more children learned computer sciences from an early age, along with dogged entrepreneurial skills.

PwC's report, The Startup Economy, found the number of Australians graduating with computer science degrees had fallen by two thirds over the past decade, despite huge growth in the global tech sector and its often well-paid employment opportunities.

"This is not a higher education issue, it's about getting people immersed in that skill-set from an earlier age – this is a high school policy issue," said economist and PwC partner Jeremy Thorpe.

PwC's report also found Australian entrepreneurs had a considerably higher "fear of failure" than those in the US and Canada.

Thorpe admitted the failure rate among tech start-ups was high, but said 40 per cent of failed tech entrepreneurs rebounded and tried again, often very successfully.

That willingness to take another punt was crucial to building a strong Australian tech start-up sector, Thorpe said.

"What we need to see is more people take risks," he added.

"This goes back to culture – the culture of not seeing having a go and failing as the end game, but having a go and failing as one step on the road."

AAP

7 comments

  • What rubbish, unions will have you for dog meat on wages and conditions with labor enforcing anything they want, go offshore and enjoy union free conditions.

    Commenter
    no way with unions running the country
    Date and time
    April 23, 2013, 12:08PM
    • "Aussie tech firms could add $109b to economy"

      You can double that (or more) if Australia had a proper patent system - one designed to actually encourage inventors, rather than one contrived by third parties (neither inventors nor society, the two groups party to the patent 'agreement'), contrived totally without input from inventors, for an entirely different purpose - that purpose ends up killing many inventions, and the odd inventor.

      Look at the list of Oz co's bled dry by the pat. system - Permodrive, Metal Storm, Sarich, etc, etc, etc. If you know of others (been out of Oz since 1984) pls let us know at reform at iproag dot org.

      Inventors beware.

      Intellectual Property Rightful Owners Action Group.

      Commenter
      Stuart Saunders
      Date and time
      April 23, 2013, 12:23PM
      • Some other interesting points that came out of the report:

        - Australia has a good regulatory framework that benefits tech startups. This will come as a surprise to the whingers that usually post comments in threads like this about excessive bureaucracy stifling the success they are so sorely due. I've always had the impression that people like this would prefer to deny their staff normal working conditions, and pay them on commission. Damn that bureaucracy.

        - Investors are very risk-averse in this country (as we already know): only $7.50 per annum per capita is invested in tech startups, while in the US it's $75, and I think in Japan it was around $30.

        - 71% of tech startup founders in this country haven't studied Computer Science. This tells me that most start-ups here are actually non-innovative, lacking in genuine invention, and are based on web or mobile apps from some hand-waving, waffling "ideas man". We need to nurture tech students instead of these gasbags and entitled dreamers, and give skilled STEM workers the respect and recognition they deserve. But our corporations and esteemed captains of industry regard STEM workers as liabilities, selling them out to cheap offshore or flown-in scab labour.

        Commenter
        TheMagnum
        Location
        Sydney
        Date and time
        April 23, 2013, 3:37PM
        • Real manufacturing startups will not happen until land is realistically priced, ie, 30% of current prices. Negative gearing should be ended and taxes set so that income from property speculation and portfolios is made unviable.

          Instead all we have for "high-tech" startups are 30yr old school kiddies living in their parents house making apps for iphones.

          Commenter
          russell
          Date and time
          April 23, 2013, 7:43PM
          • What a pipe dream. Here's why:

            * Australian labour is too expensive. Not in salaries per se but associated costs like superannuation. This eats directly into start-up funds. It also makes competitive global pricing impossible.
            * Running costs are impossibly high. Things like rent and electricity.
            * Capital costs are impossibly high. Things like software and hardware.
            * Regulatory costs are impossibly high. Things like taxes and business controls.
            * Australia is a barren wasteland for VC's. It's marginally improving but is still woeful.
            * Australian business is extremely risk-averse. Which I always found strange considering the average Aussie's propensity for gambling
            * There’s far too much interest in mining, real estate and finance. As long as there is more money in these industries there will be virtually no interest in IT.
            * Australian talent gets sucked up by bigger fish overseas. Be it for better money, more opportunity or simply the “cool” factor.
            * There are no suitable feeder industries for the start-up sector. Transitioning from finance or government to a start-up doesn’t work. Ever.
            * Australia is a consumer of technology, not a producer. And that’s policy.

            Commenter
            Jimmy
            Location
            Not_Oz
            Date and time
            April 24, 2013, 4:43AM
            • Omg, OZ & IT used together? There is no single OZ it firm that has made it big on the world stage & there will never be one. Heard one needs to work hard

              Commenter
              No skills
              Date and time
              April 24, 2013, 8:04AM
              • "Australians graduating with computer science degrees had fallen by two thirds over the past decade"
                People who graduate don't get employed as they lack practical work experience and the number of graduate positions available are very few. There are people who have Masters in IT but unemployed. Unless this changes, not many would take up Computer Science.
                To start your own Tech startup, you need to have years of work experience which will give you the necessary skills and confidence.

                Commenter
                Kash
                Location
                Brisbane
                Date and time
                April 24, 2013, 8:31AM
                Comments are now closed