NBN not enough to save Australia's IT future: Atlassian co-founder

Summary:Australia’s AU$29.5 billion national broadband network rollout will not be enough to save the future of the nation’s IT industry, according to Atlassian co-founder, Mike Cannon-Brookes.

The multi-billion dollar rollout of Australia’s national broadband network (NBN) will not, by itself, successfully support the future of Australia’s information technology sector, according to Atlassian co-founder, Mike Cannon-Brookes.

For Cannon-Brookes, Australia will never become technologically competitive on the global stage if the government does not also invest in and support IT and computer science education at school and tertiary levels.

"It’s good having a really good highway network, [but] if you've got no vehicles, no trucks, no truck drivers, what's the point of having a really good highway network?" said Cannon-Brookes in an interview on Channel Nine’s Financial Review Sunday program on 25 May. "The number of people coming out of our computer science programs compared to the job market is vastly under what we need to be competitive.

"The biggest problem the government has at the moment is it doesn't understand technology broadly.

"Technology is going to be the major of change over the next 25 years, as it has been over the last 25. If we're not participating as a country in creating that technology change, we're going to be purely a consumer of overseas technology, we're not going to have the wealth created here," he said.

Cannon-Brookes' comments come only weeks after the federal government announced in its 2014 Budget that it would scrap funding for the National ICT Australia research agency by the end of 2016.

The government also slashed AU$111 million in funding for the country’s leading science research entity, the CSIRO, and moved to scrap at least eight programs designed to support research and development, technology innovation and startups, including Commercialisation Australia, and the Innovation Investment Fund.

Cannon-Brookes, along with Atlassian co-founder, Scott Farquhar, are two of Australia's highest profile technology startup wunderkinds, with their company estimated to be currently valued at around $3.5 billion dollars and claiming over 800 employees around the world.

In 12 years, the software company has gone from a credit-card funded two-person startup to one of the fastest growing technology businesses in the world. While the company claims that around 50 percent of its staff is still based in Australia, Cannon-Brookes and Farquhar are looking further afield to find employees with the skills needed to feed the company’s expansion.

According to Farquhar, the company recently opened an office in Vietnam. The decision was motivated by Vietnamese school education programs that see computer science education introduced to most students early on in their education.

"In Vietnam they teach computer science in every high school," said Farquhar in an interview on ABC Local radio's Sunday Profile on 23 May. "In ten, 15, 20 years' time the entire populace will be IT literate and the Australian government would do well to implement that kind of thing here. We're graduating too few people here in technology. There are less and less people graduating each year that we can recruit."

The Atlassian co-founders also expressed disappointment with the government's decision to make no changes to its upfront tax on employee options and shares — a useful tool for startups looking to leverage skilled employees.

"There are a lot of things we need to do to make Australia more competitive on a global technology footprint," said Cannon-Brookes, in the ABC interview. "I think employee share schemes is a small one of those in the long term, but in the short term, it's a very big one, and I'm very disappointed to see that not get up, because it's a huge barrier to companies. More than anything, that will make those early companies leave, I fear."

Farquhar said, "there are many startups around Australia that don't have millions of dollars a year that they can pay to the government in order to give their employees shares, and I think that's a net loss for Australia."

While Atlassian still claims a solid employee-base in Australia, it is clearly working to spread its team further afield, making the move to reposition its corporate headquarters to the United Kingdom for better tax treatment.

In February the Australian Federal Court approved the move , after the company sought leave at the end of 2013 to move its head operations and shares to the UK in a bid to build its global profile and potentially look at a public listing in the United States.

In January, communications minister Malcolm Turnbull downplayed the move , saying that it had been exaggerated. In a Facebook Q&A he conducted while at Facebook's headquarters in mid-January, Turnbull said, "that 'move' is rather exaggerated; it does not involve moving their team or their business there as it happens, more of a corporate move.

"But you are right in saying we need to do more to encourage innovative companies in Australia, it is a keen matter of interest for me — an obvious area is rectifying the anomalous treatment of employee shares and options in [Australia]," he said.

Topics: Start-Ups, Australia

About

Leon covers enterprise technology and start-ups from ZDNet's Sydney newsroom.

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