Australia poised to miss the ICT boat

Australia's competitive advantage in ICT lies in a worker population that is highly skilled, competent, and highly productive, according to Ian Dennis of the Whitehorse Strategic Group. The wage of an ICT worker in Australia also compares favourably to those in the US or Europe - at least from a company point of view, he added. There is also a developed infrastructure and stable business environment.

Dennis and other industry leaders were speaking at a forum on "Tackling the ICT Trade Deficit," held in combination with the Australian Labor Party's national conference.

Despite the nation's advantages, Australia's AU$14.4 billion trade deficit in ICT remains a sore point with both the ALP and the Australian Computer Society, although the federal government is unconcerned by the large figure.

The forum generally agreed Australia has the ability to become a world leader in ICT, but fails to commercialise on technology developed in the country. This technology is consequently consistently lost to businesses overseas. "We have talent, we have IP [intellectual property], we don't know how to commercialise it and retain the companies in Australia," said Peter Kazacos, founder of outsourcing specialists Kaz.

David Barbagallo, chief technology officer of Mincom, told the conference "we can't maintain the investment levels unless we retain the profits in Australia". He also warned Australia had a limited window of opportunity to capitalise on its advantages.

"Our skill base and innovation advantage is a passing phase," said Barbagallo, and claimed there were 10 million Indians in IT and 300 million people in China under 18 learning English. "We have to be an export oriented nation."

The forum said Australian small-to-medium enterprises had to partner with multinationals to break into foreign markets. The government also had a role to play, speakers said, re-airing the age-old complaint that the federal government does not purchase enough IT from Australian companies. Brand Hoff, managing director of Tower Software said only 25 percent of federal government IT purchasing was undertaken with local companies, compared to an average of 55 percent of all IT purchasing undertaken within Australia.

Barbagallo said there was no cultural consideration within the government to buy Australian IT. "There are deeply held biases - both subconsciously and consciously - that actually inhibit [purchasing IT from Australian SMEs]," he said. Another issue was the "unlimited liability" clause can be included in government contracts, which tends to eliminate smaller players.

Rob Drury, the executive director of the Australian Information Industry Association, said one of the main problems with commercialising technology in Australia was the nation's tax laws. Things such as capital gains tax discouraged personal investment in start-up companies, according to Drury. It was suggested that if the government gave similar tax concessions to investing in start-up companies as they do to investing in property there would be more research and development and more commercialisation of that research in Australia.