Introduction
Australian policymakers are converging on a few challenging issues simultaneously. With a growing population and the tail end of an inflation outbreak, the housing crisis seems set to persist, affecting affordability for years to come. In this context, finding solutions to foster economic stability and growth is crucial.
One viable path to address these challenges is through high-productivity jobs that can boost incomes and curb inflationary pressures. This, however, demands a commitment to export-oriented technology, which has proven to be an effective economic driver in other regions, like Europe and the United States. For example, the United States has heavily invested in tech-based productivity improvements and cybersecurity frameworks that support startups in global markets. This commitment has enabled American tech firms to expand globally, establishing strong market positions in sectors like SaaS (software-as-a-service), cybersecurity, and advanced manufacturing.
However, Australia’s relatively small market size means we canโt rely solely on domestic demand. Our technology needs to be exportable, yet current export figures paint a sobering picture. According to the latest DFAT data, โtelecom, computer, and information servicesโ came in second last among export categories, contributing a mere 0.5% of total exports. This data signals a need for structural reform and strategic investment to make Australian technology companies globally competitive.
Instruction From Elsewhere
Europe has tackled similar issues with targeted policy interventions aimed at small and medium enterprises (SMEs) in technology. Through initiatives like the Digital Europe Programme, the European Union has offered grants and funding aimed specifically at enhancing digital skills, cybersecurity, and data infrastructure for SMEs. This support has enabled European companies to handle productivity bottlenecks, particularly in cybersecurity, which is crucial for businesses dealing with sensitive data in overseas markets. By contrast, Australian companies expanding internationally often find themselves grappling with these bottlenecks, as their existing infrastructure struggles to meet the demands of new markets.
For instance, Australian businesses increasingly rely on VPNs for remote work, especially those requiring access to secure, on-premises systems. VPNs, while necessary for cybersecurity, can hinder productivity by introducing latency issues, which disrupts tools like Zoom and Teams and ultimately impacts employee satisfaction. As seen in the US, companies have mitigated these issues by transitioning to more robust cybersecurity and data-sharing solutions that prioritise both security and user experience, reducing the need for VPNs in certain contexts.
Our experience indicates that challenger financial services firms are particularly vulnerable to these productivity challenges, especially as they handle vast amounts of data with stringent cybersecurity requirements. When expanding into regions like Southeast Asia, these firms often encounter unique infrastructure and latency issues.
In Summary
Companies that are trying to grow internationally while remaining competitive in the Australian market sometimes make mistakes by underinvesting in cybersecurity infrastructure, only to find it leads to productivity issues that negates the benefits, such as lower wages, of the markets theyโre expanding to.
US-based companies have addressed these problems through a combination of private-public investments in secure, high-speed data-sharing networks. Such investments allow them to operate efficiently across borders without compromising on cybersecurity.
Australian policy support for export growth should adopt similar approaches, emphasising targeted support for small tech companies with ambitions for international expansion. A focus on technology infrastructure, akin to the policies seen in Europe and the United States, would facilitate efficient and secure information sharing, enhancing Australiaโs competitiveness on the global stage. This approach could transform Australia into a technology exporter, with sustainable growth opportunities across diverse international markets.
