Sunday, September 7, 2014

Australia can build a trillion dollar ICT Industry

"A grand vision that can benefit several generations of Australians and help the astute political leader win consecutive elections by capturing the imagination of the nation"

February 2013 - By Dinesh De Silva
This was sent to the two major political parties in the 2013 election.

The background

Australian technology professionals are known around the world for their creativity and high standards of professionalism. Our ICT businesses have been known for innovation and maturity in service delivery. However, unlike our nations closest allies, the US, we are not known for having a booming ICT industry, or as an incubator for some of the finest innovations the world has seen. We have simply resigned ourselves to being consumers of technologies built in the US and other countries.

A clear case in point is Stephen Conroy’s 2020 Vision for ICT where the emphasis is on being world class adopters and consumers of technology. Clearly lacking is a vision to help build Australian technology firms and talent to create enterprises that will lead the world in the digital economy, taking advantage of the nation’s significant brand equity and creative talent.

As a nation we continue to depend on a mining lead economy. How long can we do so? Our ICT Industry, if structured correctly, can give our nation another significant source of revenue. It can be a double digit contributor to the national GDP. 

Australian's are amongst the greatest users of technology in the world and we now need to convert the use into creation. Our country is blessed with an abundant source of creative talent, world class engineering schools, some of the best software developers in the world and a highly respected Australian brand globally. Where are we lacking?

Why are we not creating greater value and impact globally as we do in other fields of achievement at an individual or national level? Hugh Jackman, Nicole Kidman, Adam Scott, Elle Macpherson, Mark Webber are just a few Aussies who have conquered the world in their fields. Our firms, BHP, Rio, Fortescue, Leightons, Macquarie Bank, Billabong are all well known global brands. Where is the equivalent in the field of ICT? Google, Facebook, Amazon, Apple, none have Australian origins. This is despite our economy, been one of the best performing economies for decades and our currency outperforming the best. There has to be a reason. 
This paper outlines the problem and more importantly proposes a simple solution.

The problem

We have under performed due to two significant reasons.

1) Lack of political vision and government policy to build the ICT industry as a major vehicle of national revenue with a focus on double digit contribution to the nation’s GDP.

2) Business models of Australian companies that are constrained by their dependency on Australian resources.  

This document focuses on Political Leadership and Government Policy.

Consistent governments have failed in the area of policy to provide a holistic environment and the required support structure for individuals, small and large business to focus on software and ICT innovation. A host of sporadic, “knee-jerk” initiatives rolled out on their own by consecutive governments, with the hope of boosting innovation has not helped.

In addition to the government, our Industry must take its share of blame. The composition of the board of AIIA - the country’s foremost industry association for ICT - is a case in point. Its board is predominantly built around local market CEOs of global ICT powerhouses and Australian companies that are serving the national market with products and services mostly developed overseas. With such a structure how can Australia build its own global power base in ICT with vision to take on world markets? Over the years we have evolved as such due to our nations inwardly focused nature. Many of our firms and their inventions in the hundreds are either bought out and some adopted or stolen before maturity by larger international players. For example, Google and others have bought several Australian inventions and Microsoft was successfully sued by Australian Inventor Ric Richadson for $300M+ for using his inventions. These are the luckier examples, but how many others die at inception with no funding or lack of support.  

What other nations do

The US is the best example for having a climate of innovation. Silicon Valley is perhaps the most successful "Industrial Cluster". As a result, Silicon Valley has created TRILLIONS of dollars in value and wealth to the American people. It has spawned hundreds of global super powers from mere tech start-ups! The likes of Apple, Yahoo, Google, Cisco, Adobe, eBay, Intel, HP, Sun, and the list continues...

Silicon Valley is not the only ICT cluster in the US, but it is the most successful. There are many others that help create the much needed ecosystem for  global powerhouses such as Amazon and Microsoft among others.

Even nations like Ireland, India & Costa Rica have set up IT clusters and industrial frameworks to ride on the growth of Information Technology. Indian Companies such as Infosys, TATA, WIPRO and hundreds of others have benefited by concerted national focus on IT when the government of India put in place an ICT policy which led to them becoming the outsourcing nation of the world. Today, they are global IT Conglomerates with revenues in billions of dollars. Smaller and mid-sized Irish and Indian companies are winning significant business around the world. India today is no more the "cheap” source for software developers, but have some of the best software houses in the world. Sadly, Australia cannot boast of even one company generating a billion dollar revenue as a global ICT business.

Irish ICT and software companies enjoy tremendous government support. On the invitation of the Irish Government, I once addressed around 70 leaders of the Irish Software industry on the "Australian ICT Market Place" in Ireland. A few of us were invited to Ireland as guests to provide expert opinion and local knowledge on entry into different markets around the world! These initiatives give invaluable insights to entrepreneurs taking on the world. I was impressed how the Irish government agencies were set up to assist in the growth of these technology companies, from start-up capital, to office space, to management training to international marketing.

What’s required

Firstly we need a grand vision that can capture the imagination of our nation - a vision and a political willingness that can win not one but consecutive elections to a party that can articulate and act upon the vision.

People of Australia love a grand vision. Whether we like it or not, Labor’s vision of the NBN effectively helped them win not one but two elections. It certainly tilted the balance for Julia Gillard in Labor’s second term and gave Kevin Rudd a much needed boost in Labor’s first term.To implement this vision, we must focus on the big picture and get the best in the world to help the government to set the nation up for success. The type of global experts who have done this beforeand have the profile to get the year of a nations leaders.  It must be done as a holistic exercise similar to setting up the NBN but implemented much more professionally to tighter measures by these global experts who have experiencing building industries and global brands.

In this paper I will not focus on transactional policities like employee share ownership schemes, or importance of teaching coding in schools. The best in the world of advising our nation’s leaders and policy makers on how to implement the structures and policies of a national vision are:

1) Prof. Michael Porter of Harvard Business School and author of Competitive Advantage of Nations, who works with multiple governments in helping set up Industrial Clusters and national frameworks for competiveness of industries.

2) Blue Ocean Strategy Institute (BOSI), lead by Prof. Chan Kim and Prof. Renee Mouborgne of INSEAD Business School who have helped South Korea over many years to build world beating brands and businesses in Samsung, Hyundai, Kia and LG, to name a few. They now work with the leaders of Singapore and Malaysia. Vast strides Singapore has made recently is case in point.

If we can set up a BOSI in Australia with a focus of achieving our grand vision working with Prof Kim and team, they will help create the structure and much needed road map along with a time table and action plan for  what our nation must do.

The Malaysian BOSI which I have visited is staffed by about 30 of the best PhDs in each of the key disciplines needed for that nation’s vision. I believe Australia can significantly benefit working with the likes of Michael Porter and his team or the BOSI team headed by Professor Kim. For the purpose of the exercise I will refer in this paper to this initiative as building a Australian Strategy Institute for ICT (AUSSII).

It will take effort to woo the above mentioned experts as both Prof Michael Porter and BOSI are extremely selective on the assignments they undertake. I cannot however see why a nation like ours would not be able to attract them if we are deeply committed to the cause.

Immediate Action

1)   Form an Advisory Board with selected Australian business & economic luminaries to build a 2030 technology vision that has Australia as one of the major creators of technology.
2)   Ensure the advisory board has the required access to political leaders and officials.
3)   Agreement to divert the required funding, e.g. 10% of NBN funding to creation of an ICT lead economy.
4)   Select well respected organisations, as mentioned above, to advise the nation. They should be accountable to the advisory board in the agreed upon timeframe.


The vision articulated above will benefit several generations of Australians to come. It is also a grand vision that can be built upon the existing investments already committed on the NBN and help win consecutive elections for a visionary political leader.

The investment in a AUSSII will be minute considering the investments we are making on NBN, yet the benefits will be far greater.

An AUSSII lead strategy can help multiple industries as a spinoff. For example, while we are going to fund the automotive industry, we could focus on a program of technology creation to help Australia build the most technically advanced motor vehicles in the world or to strategically identify our niche in the global automotive industry.

With political willingness and strategic action, we can build a multi hundred billion dollar, if not a trillion dollar ICT industry around the investments made on the NBN and develop Australian invented technologies to take to the rest of the world.

Dinesh is CEO NexGroup & Co-Founder SalesNgin.Com. He lives in Sydney with his three beautiful kids and his partner in business and life Saadia. Dinesh has provided strategic direction and leadership to from government to large & medium technology businesses for over 15 years . He is a specialist in business growth,  an accomplished speaker & provides Media opinion on his latest pet topic "helping small and medium business take on the online world".
Keynotes,Media Opinion 61-2-80033342 :Twitter @dineshdesilva

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