Talent is the biggest challenge for Australia's future: Atlassian CEO

Mike Cannon-Brookes, co-CEO and co-founder of Sydney success story Atlassian, believes the country will find itself in a 'bad spot' if it does not invest in future talent.
Written by Asha Barbaschow, Contributor

When it comes to Australia's future, Mike Cannon-Brookes, co-CEO and co-founder of startup darling Atlassian, believes the biggest challenge the nation is facing is its lack of talent.

"I do think it's an important time for Australian tech. I think Australia has a place in the tech industry going forward -- well, it should have a place in the tech industry going forward," he said. "If we're not investing in technology we're completely stuffed as a nation."

As the world becomes more driven by technology, Cannon-Brookes belives that Australia is going to end up just consuming what everybody else around the world produces.

"We are 1 percent of the world's GDP today, which makes us 20th in the OECD in terms of size of economy; if we're not producing 1 percent of the world's technology in 10, 20, 30 years time, there's no way we can maintain that position," he said. "That puts us in a bad spot."

"Malcolm's trying hard, they're trying at a government level -- and we think that's great," he said.

"I think fundamentally it's about talent -- that's our biggest challenge in this country. Talent, training, and STEM education in high schools is critically important."

Cannon-Brookes said that Australia is behind many other developed nations when it comes to preparing children for the jobs they will need, and that if the nation does not employ some form of computational thinking in schools, he does not expect Australia to have the workforce in 20 to 30 years' time that it needs to have.

"In the UK, kindergarten through 12 do computer science education; various states in the US are starting to mandate computer science as one of the things you graduate with in year 12 as a mandatory subject like Maths and English," he said.

Under the federal government's AU$1.1 billion National Innovation and Science Agenda, the prime minister announced his intention to create an Entrepreneur Visa, which would allow those from overseas to live and work amongst Australia's tech industry.

Last month, the government begun the consultation process for the visa, releasing a discussion paper to tackle concerns including: Individual nomination procedure, third party backing, length of stay, visa extension length, and whether the individual should be given permanent residency if their innovations prove to be a success.

"It is critical for Australia's prosperity and growth that we not only tap into the best entrepreneurial minds in Australia, but we also make it easier for talent from overseas to contribute to this country's innovative future," Minister for Industry, Innovation and Science Christopher Pyne said at the time.

"We are also keen to retain those educated and talented people who have come to Australia and developed their knowledge base during their time in this country."

Cannon-Brookes believes bringing in overseas talent while the country waits for its own students to be trained up is crucial.

"We've got to be importing a lot of technical talent," he said. "We've got a lot of very talented engineers here. We always say at Atlassian that we don't have any experienced engineers.

"Most of our guys have come in for the first time. We're doing it for the first time and we realise that; most of the people we are hiring locally are very, very smart, great engineers, but they're all doing it for the first time.

"We're here as a business learning everything ... it's painful to just constantly be running through walls, so we've got to bring in as much overseas talent as we can -- and you know what, our lifestyle's pretty good here so they generally stay, they pay taxes for a long time, they have kids."

With Atlassian's 14-year anniversary just around the corner, Cannon-Brookes said his company feels as though it is still at the beginning of its journey.

"We always say we're trying to target the 'Fortune 500,000' -- that's our target market so it's that big in terms of the customers we're going after. How we think about the world vastly differentiates us from traditional enterprise software companies," he said.

"We have competitors that target the global 2,000 or something like that and we believe that the market is big and wide, and they think it's narrow.

"It shows how we think about things differently; you can see that in our business model."

Atlassian was listed on the NASDAQ in December, following the largest ever float in the US from an Australian company.

Prior to its listing, Atlassian was valued at AU$5.6 billion, but the heavily oversubscribed IPO saw the tech firm reach a AU$6.01 billion valuation.

Within the first 24 hours of going public, Atlassian's stock soared 32 percent, debuting at $27.67 and peaking at $28.50 before closing at $27.78.

The company's closing share price put its market value at nearly AU$8 billion.

"We had a pretty big year last year and it was pretty exciting," Cannon-Brookes said Wednesday.

"It was a bizarre couple of weeks, very exciting, exhilarating, but it was a much more patriotic climate than I think either Scott or myself thought it would be -- there were a few tears shed -- and seeing how excited people were here [in Australia] took us a bit by surprise."

In its first quarterly earnings report since IPO, the company posted second quarter non-IFRS operating income of $20.3 million with revenue of $109.7 million, an increase of 45 percent year-on-year.

Atlassian told shareholders at the time that after expenses, the company raised net proceeds to the tune of $431.4 million from its IPO. Prior to going public, the company had never raised external financing in its 13 years of operation.

In November, Atlassian said in its filing with the US Securities Exchange Commission that it intends to use the proceeds from the IPO for working capital, operating expenses, and capital expenditures, as well as to acquire other businesses, products, services, and technologies.

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