Rays of sunshine to be seen breaking through Australia's tech gloom

There are those who would say that Canberra's 'Ideas Boom' innovation strategy, intended to boost Australian tech, has been a failure. Recent and highly unpopular surveillance legislation has added fuel to this argument. But continuing investment from overseas runs counter to this narrative.

Things ought to be pretty grim in the tech business Down Under by now. The federal government's 2015 push to boost the industry has run into headwinds, particularly over the R&D incentives it brought in, which in some cases have led to retrospective reviews and complaints that the system is too troublesome to be worthwhile. Meanwhile restrictions on skilled migration visas have led to further complaints that companies can't hire the staff they need. Australia is also failing to educate and train enough home-grown tech talent, with mostly non-STEM graduates coming out of the universities - and half the nation's graduates educated elsewhere.

Add to this the international condemnation attracted by last December's Telecommunications and Other Legislation Amendment Assistance and Access 2018 (or AAA18) law, which compels Australian companies and individuals to cooperate secretly with the Australian Security Intelligence Organisation (and thus perhaps with its "Five Eyes" allies and 300+ overseas partner agencies) and the climate might have seemed gloomy indeed.

But in fact, it's very possible to suggest - with due caution - that things haven't been panning out that way.

R&D incentives too troublesome? Not for some

Big international firms have found the R&D tax breaks not only worthwhile but irresistible. IBM, Microsoft, Agilent, Thales and NEC all have research labs in Melbourne. Melbourne University has participation from heavyweights like Cisco, Ericsson, Telstra and Bell Labs. KPMG has ranked Melbourne as having the most attractive R&D location costs in the Asia Pacific region.

Beyond R&D, Telstra alone has invested A$900m and more on cloud infrastructure just in the Melbourne region. Big tech names like China's Pactera and US-based Eventbrite have placed Asia-Pac headquarters in Australia in recent years - and these were joined in 2016 by Slack, one of the hottest names of recent years. According to Slack's announcement that it would set up in Australia:

"We like Melbourne for lots of reasons … it's a place that brings together people of all nationalities and creeds".

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