A new report launched by the Tech Council of Australia (TCA), Microsoft and LinkedIn has shown the important contribution that investment by US tech companies make in Australia’s thriving tech ecosystem.
The report – entitled Harnessing the hidden value: How US Tech workers boost the growth of Australia’s tech ecosystem – was launched on Wednesday, with a keynote speech from Australia’s Ambassador to the United States and former Prime Minister, Dr Kevin Rudd AC.
The report highlights the economic importance of the investment relationship between Australia and the US. US investment contributed more than $1 trillion to the Australian economy in 2021, the highest investment in Australia by any trading partner.
This trading relationship is likely to strengthen in the wake of major new alliances, such as AUKUS and the QUAD. This in turn is likely to bring greater jobs and skills benefits to Australian workers and the economy.
US tech firms are large direct employers, with 100,000 people employed by these firms in Australia. US tech firms also bring access to a higher proportion of experienced tech workers, which is the single biggest area of skills shortage in Australia’s the sector. For example, only 1% of people working in the tech sector in Australia have experience in a scaling-up firm, compared with 17% in Singapore. Gaining access to globally experienced talent therefore helps Australian firms to grow globally.
Australian firm workers also benefit from having more experienced workers. The report also finds that when an early – mid career worker can work alongside an experienced worker it lifts the productivity of a more junior Australian worker by 2.6% because of the extra coaching and training they receive.
Finally, the report shows that each year 4000 experienced workers leave US tech firms in Australia to work in tech jobs in local companies, other industries or to found new companies.
Skilling programs and pathways predominantly produce entry level workers which means this will not solve the problem in the short and medium term.
However, Australia has been home to US tech companies like Microsoft, LinkedIn, Google, IBM and AWS for many decades, and they are playing an important role in the Australian ecosystem.
This research shows that US firms act as talent incubators, fast-tracking junior workers and providing the skills necessary for new companies to scale globally.
This is because US tech firms support globally experienced talent. For roles that require experience, not simply skills, there is a 6% productivity bump to having a person with experience in the role. This results in skills transfer and uplift to junior workers who are 2.6% more productive than workers who are not surrounded by experienced tech talent. In addition, they produce spillover effects outside of the firm, and to their customers and suppliers
TCA CEO Ms. Kate Pounder said that technology is an increasing focus of the Australia-US alliance and continued strengthening of these ties will offer economic and strategic benefits to both nations.
“The US and Australia have always shared a close alliance. This report highlights how that relationship directly boosts productivity, as well as grows jobs and skills in Australia’, said Ms. Pounder.
“The alliance is also important to creating jobs and opportunity in Australia. We have a shared goal with the Australian Government of having 1.2 million people in tech jobs in Australia by 2030. To achieve this, we need to reskill 300,000 Australian workers, and train 160,000 younger Australians to work in tech jobs. This report shows Australian workers will have access to more job opportunities, and a better coaching and training experience, due to the investment that the US-Australia alliance is facilitating.”
According to Matt Tindale, LinkedIn’s Managing Director for Australia and New Zealand, US tech-alumni have been crucial to developing Australian tech talent.
“Based on our experience in the Australian tech sector, we know that US tech firms play a significant role in bolstering our industry. They equip their employees with sought-after skills that are in high demand in the talent marketplace.”
“According to our Economic Graph data, around 4,000 experienced local workers transition annually from US tech firms to Australian businesses. This diffusion of skilled professionals contributes positively to our local economy by enabling Australian companies to stay competitive in the global market, drive innovation, and expand their operations.” Mr Tindale said.
The report reveals that 80% of those Australians employed by US tech firms who leave, move on to home-grown companies, start-ups or the public sector. All up, each annual cohort of US tech alumni that take up roles in Australian firms contribute $613 million in value added to the economy.
Belinda Dennett, Microsoft Australia’s Director of Corporate Affairs, says “The report shows that US tech firm workers pass on knowledge and skills even without leaving their positions. Whether it is in working with their Australian business customers, with Government, mentoring and supporting startups or through their volunteer hours supporting not for profits – the spillover effect and tech uplift is happening across the economy.
“Microsoft has been part of the Australian tech ecosystem for over 40 years and we have long recognised the contribution our people make. This report demonstrates the skill transfer goes beyond just the tech sector and helps put a value on that contribution” Ms Dennett said.
The report also outlines the impact US tech organisations have on the rest of Australia’s economy, with CEO of the Business Council of Australia, Jennifer Westacott, AO saying “This research shows that overseas investment is critical to create jobs, boost productivity and encourage innovation in Australia. We need to get the settings right to encourage and enable overseas investment if we want to be a top 5 digital economy by 2030.”