Predictions on what the future holds for the Sydney tech ecosystem.
Predictions on what the future holds for the Sydney tech ecosystem.
Do we have the right representation?
Predictions on the Sydney tech ecosystem and broader economy if we don’t take action
No silver bullet — solutions to explore
Why this is a pivotal point in time
Following on from my previous article on the lack of awareness overseas of the Sydney tech scene;
A hot topic right now is diversity in tech and the proven benefits of diverse teams. Different ways of thinking provoke better outcomes especially when building products for a diverse customer base.
So, do we have a diverse Government?
The Government are focused on growing the economy, led historically by the finance and mining sectors that have served us so well in the past however with renewable energy and fintech disruption there is a need to empower the future economy drivers (Atlassian, Canva, Appen, SiteMinder, Finder, VAMP, WiseTech Global, Ansarada, Safety Culture, Deputy, Cover Genius, Freelancer, Airtasker to name a few) BUT how when they have no voice and the tech industry isn’t at the forefront of the Governments’ plans? How long until we’re banking with an overseas company? At some point blockchain will be having a major impact too. Whilst Mike Cannon-Brookes leads the charge in trying to educate the Government he appears to be the only voice with any influence.
I met with a leading Australian VC recently and all bar one of their portfolio of companies were hiring, I’ve also met with a multitude of successful tech companies with aggressive growth plans, so where are these people going to come from?
Do you think the likes of Amazon, Facebook and Apple became who they are today by only hiring US citizens? There is an estimated 30-50% of migrants in the big tech hubs of Silicon Valley, New York and London. Look at the job creation by those tech giants, the revenue they bring in from overseas and how much tax did they contribute to the Australian economy last year?
Predictions on what the future holds if we don’t react.
The Global Talent Scheme gets reviewed bi-annually but due to its lack of uptake (6 processed so far, 6!) critical positions like product designers, marketers and managers will remain on the 2 year visa list. This will discourage people from relocating and companies hiring from overseas.
The skill shortage required to put Australian companies on the global map will continue, from engineers, designers, product managers to product marketing, data science, technical sales and most importantly; leadership capabilities on the big stage.
The shortage of tech talent will see the continuation of salary increases and movement in a version of musical chairs. When the going gets tough which it inevitably does at any company at some point, rather than stick it out and work through it, the lure of another great vision/mission, share options, pay increase, pool tables, beer taps, remote working etc will tempt people away. When will the music stop?
Company’s with resources (dedicated TA function and finances), a great EVP, a culture with substance and fast and effective hiring processes will win out. The smaller up and coming startups will struggle to compete. As the clock ticks, those startups will be forced to ship product slower or compromise on who they hire, impacting their culture, end product and in turn their customers.
Build it and they will come — giving the Sydney tech scene a hub like the one the Government has plans for at Central to Everleigh helps to give it an identity but that alone won’t have the finest talent around the world relocating here in their droves.
Too many companies will continue to hire experience over potential as the pressure to deliver maintains priority. Balanced teams of seniors and juniors won’t materialise impacting the future of the industry. There is the additional fear of investing in juniors only for them to get poached by ‘can’t refuse’ offers; loyalty only goes so far.
Lack of collaboration across Australian tech companies as the battle for talent intensifies (whilst not actually competing for a single customer or dollar of revenue!!). With a market of just 25 million people Australian tech companies go global very early in comparison to US and European counterparts. Surely there are lessons being learned as companies tackle new markets which require products to be adapted and sold differently?!
Tech talent shortage isn’t unique to Australia so how long before overseas hubs start targeting our own world class professionals?
An increase in overseas engineering hubs for Australian companies as they struggle to scale quick enough locally. Many already exist in India, Vietnam, Poland and the Phillipines, the trend is set to continue.
Founders and senior leaders won’t realise the impact of not being able to hire the right talent quick enough until it’s too late. Local competitors will innovate faster and absorb large market share, yet the bigger concern on a global scale is companies with access to talent beating Australian companies to the punch. Is this playing out right now with Israeli fintech Splitit taking on market leader AfterPay in the buy now pay later space?
Australia will fall further behind, as Daniel Petre commented recentlywe are currently on par with the state of Ohio for VC investment as US$1bn was invested in Australia in 2018; just a tiny US$76bn behind California. Why would the likes of Sequoia Capital continue to invest in Australia if companies can’t deliver due to skill shortages?
Apple generated AU$9bn revenue last year in Australia (up $900m from 2017) but their tax bill shrunk $19m to $164m. The outflow of capital will continue as the likes of Amazon enter our economy, they will create jobs but negatively impact Australian retailers. Yes but we always have coal…….
Don’t give me problems, give me solutions!
The Future — let’s think sustainable
Open the doors of Australian tech companies to young kids giving them a window into a career in tech from an early age as opposed to waiting until it is too late.
Invest more time and resources into attracting females into tech as well as retaining them in the industry by providing return to work options post maternity leave, female friendly environments, flexible working hours for dropping and picking up children (the last point applies to men too!!)
Invest more into building channels for people to transition their careers into tech (General Assembly and Academy Xi have been instrumental). There are many bright and gifted young people in careers like investment banking who, given the chance to apply their talents to creating value through technology would jump at it.
Cross-skilling the future is critical to long term sustainability. Implementing sponsoring criteria that allows hiring of highly skilled overseas professionals only when hiring a quota of local junior talent in unison. A significant proportion of migrants arrive and then return home at some point, without knowledge sharing their impact will stop when they depart.
Partner programs. Ask any tech company if they’re interested in an Aussie returning home and they’ll bite your hand off. Overseas experience is highly regarded, why not invest in a partnership program with the UK? Invite overseas graduates who’d rather a year or two getting work experience with Australian tech companies as opposed to picking bananas in Bundaberg whilst consuming litres of goon (wine in a box) into the late hours. Equally young Australians will benefit too from a reciprocal agreement returning home with valuable experience.
Build awareness. Build a brand.
Give the Sydney tech scene an identity, create a window into the lifestyle Sydney has to offer and the innovative companies where local and overseas talent can visualise themselves.
Support and enable.
Re-establishing the R&D grant but police it better, as opposed to companies with billion dollar profits looking for loopholes to exploit. Let’s make sure the money is finding its way to those who need it.
Rethink the Anti-encryption law that is going to hurt innovation and handicap Australian tech companies.
Continue the great work by startup hubs and incubators in supporting the entrepreneurs of tomorrow, helping them bring their ideas to life.
Build a better support network for Australian tech businesses tackling growth in overseas markets. Encourage and facilitate cross collaboration between Australian founded tech companies.
Support the meetup community that underpins the emerging tech scene in Sydney through financial support and by driving awareness to attract newcomers.
Simplify visa eligibility and speed up the process. It’s a huge life decision for anyone relocating to the other side of the world, let’s remove any uncertainty around visas.
Incentivise Tech hubs outside of the city, affordability is an issue, equally many professionals would rather live away from the city but without the journey time so they can spend more time with their family.
Embrace overseas success and invite them to our shores. If a country with little mining experience discovered valuable resources, would it not be wise of them to seek the rich history and experience of Australian miners to extract it?
Amplify our success, tall poppy syndrome is a problem, being proud of our achievements and telling the world should be a growing mentality we all support.
This isn’t a doomsday prediction, I believe Australia is at a pivotal point in deciding its future. Having grown up in the UK and then spending the last decade in Australia I am proud to be a citizen of both countries. I feel Australia can not only learn from the mistakes that Britain has made but from what they have achieved in building a tech hub that has attracted investment, businesses (Corporation tax 19% dropping to 17% in 2020), talent and harnessed innovation which will stand it in good stead regardless of the Brexit outcome.
Australia is leading the world in many ways from banking and payments to healthtech, the platform is there for Australia to shine on the global stage if we make the right choices now. Successful companies of the past with wide moats got disrupted (Kodak/Blockbuster/Nokia), countries are no different. Whilst we are an island in a remote part of the world don’t think for a second we’re safe clinging to our banking and finite mining resources to guide the future of the country, disruption is happening right now and actions must be taken!
TechLifeSydney is working to bring awareness to the masses of the Sydney founded disruptors, driving positive change through industries around the globe.
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