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Where are they taking IT?

Where are they taking IT?

There is an election looming and politicians are out to impress. While the major parties have their respective IT pitches more or less nutted out, the Government has jumped the gun, announcing its Innovation Action Plan For the Future to back Australia's IT ability recently in Sydney. The plan throws $2.9 billion at initiatives designed to stimulate economic activity in the sector and was generally greeted with a hearty round of industry applause.

Yet the initiative appears to show an abrupt shift in the way the Government has approached the IT sector. Increased tax breaks for R&D, increased funding for IT, science places at universities and a scaling up of the Commercialising Emerging Technologies (COMET) program all point to a major reassessment of the Government's view on the economic importance of the IT sector.

Many in the industry are describing it as a hard fought victory, recognition which has come from years of intensive lobbing by industry groups such as the Australian Computer Society (ACS), the Australian Information Industry Association (AIIA) and individual companies.

Other major parties are similarly focussed on IT issues, with the Australian Democrats releasing an IT policy statement as far back as September 1998. Displaying some foresight, the statement dealt with a number of issues that have only recently been addressed by either of the major parties.

Entitled Vital: an Information Technology Vision for Australia, the statement contained measures aimed at encouraging higher participation in tertiary education, increasing R&D tax concessions, promoting private sector investment in research through taxation reform and the use of Government procurement to stimulate the IT sector. Vital also dealt with issues associated with privacy and Internet access and usage.

According to Natasha Stott Despoja, deputy leader of the Australian Democrats and the party's IT spokesperson, the health of the IT sector is of critical importance to the overall economy.

"We are very conscious of the role IT business plays in the current and future wealth of the country, and we are willing to back up this rhetoric by providing the sector with resources and incentives," Stott Despoja said.

Stott Despoja also invites industry representatives to lobby for Government support, saying that the nation's lawmakers need to have the issues explained before they can formulate coherent policy initiatives.

Whilst the ALP is yet to release a policy statement, the Shadow Ministry has made numerous policy platforms under the Knowledge Nation banner. The Labor Information Economy platform promises to take measures that will attract investment to the IT sector, stimulate exports, increase the emphasis on IT training and education and create the framework for an ongoing dialogue between industry representatives from the Government, education and private sectors.

Shadow Minister for Industry, Innovation and Technology Carmen Lawrence outlined the ALP's approach to the IT sector.

"We are approaching the sector from a number of angles. Our focus in on capacity building - that means providing both physical infrastructure and bandwidth - as well as the skills and income incentives," Lawrence said. "I believe the Government should operate not only as a purchaser of Australian technology, but as an advocate for the sector."

However, the devil is in the detail, and until a concrete policy statement is released, details remain thin on the ground.

Apart from their concerns regarding the deregulation of the telecommunications industry in Australia and their opposition to any further Telstra sell offs, the National Party has been fairly quiet on the IT front, preferring to take the lead from its coalition allies.

The Australian Greens have a policy platform for the Information Technology industry, however its principal focus is on providing IT resources to the general community. The party is interested in fostering further networking development to enable greater levels of telecommuting, and ensure access to IT resources through schools and libraries.

Winds of change

For many in the industry, the pomp surrounding the Government's announcement of its Backing Australia's Ability policy statement was itself cause for celebration and, according to ACS president John Ridge, the launch finally provided the industry with "serious recognition".

"The plan is the result of the work of three high-level ministers all providing a serious commitment to the development of the IT sector and recognition of its importance within the economy," Ridge said.

Rob Durie, executive director of the AIIA, believes we are entering a period of bipartisan recognition of the importance of the IT sector. He confirmed he had been consulted on IT issues by representatives of different parties.

"We are finally getting some recognition of things like the role IT plays in terms of overall economic growth across other sectors of the economy," Durie said.

However, both Durie and Ridge pointed out the difference between recognising the importance of the sector and understanding the sector's requirements.

"Achieving this kind of recognition has been hard fought," Ridge said. "A lot of people equate awareness with understanding. What we have discovered is that the industry itself has to become a lot more effective at delivering the message, we need to be able to explain our needs so that policy makers understand how to go about legislating for change."

Work to be done

Every hue in the political spectrum is promising to take steps to attract investment to the Australian IT sector. Grame Barty, managing director of Web development company Harvest Road, echoes the sentiments of many in the industry in pushing for a greater emphasis on the commercialisation of technologies developed in Australia.

"That is the real issue," Barty said. "There has to be a policy of supporting Australian industry to grow."

Under the mantle of the Department for Industry, Science and Resources headed by Senator Nick Minchin, the Government has announced a $40 million expansion of the Commercialising Emerging Technologies (COMET) program.

While not solely aimed at the IT sector, the program assists small companies to commercialise innovations by providing mentoring and business consultants as well as start-up capital.

However, the Government's expansion of the COMET program seems to be merely echoing the Democrat's calls for increased support for the commercialisation of Australian technologies in 1998.

Jon Johnston, managing director of integrator Centari Systems, is one of many in the channel who gazes longingly at tax breaks for IT investment provided by Governments in the US and Ireland. "The thing about IT is there are no geographical issues - you can attract the investment anywhere as long as you provide the right economic conditions," Johnston said. "Look what has happened in Ireland in the last 12 months. They went from being the basket case of Europe to being a model economy."

While the Government's innovation statement announced increased tax concessions for already profitable companies engaging in R&D, so far there is no indication of tax breaks for investors in the IT sector.

Although the ALP's IT policy stance has not been fully defined, according to Lawrence a Labor Government would aim at increasing private and public investment in IT local industries.

The Democrats policy statements outline plans for tax reform aimed at encouraging investment and stimulating the sector. They have also outlined plans for the establishment of an office to "research new investment and industry opportunities".

The ACS's Ridge believes the measures outlined in the Government's innovation statement would lead to an environment which encourages industry investment. However, he believes all parties should be taking a more creative approach to stimulating the market. "I'd like to see things like the Government encouraging super funds to invest more heavily in technology," Ridge said. "In fact, the Government itself should show some leadership in this area."

Government procurement

One area which remains a bone of contention within the sector is the extent to which the Government should use its own procurement to stimulate market growth. With the sector still reeling from the Federal Government's recent outsourcing debacle, the innovations statement steered away from any reference to Government procurement. Nonetheless, the industry is still pushing for the Government to open up more opportunity to local industry.

Harvest Road's Barty outlined how important it is for fledgling companies to have access to Government contracts.

"If you can sell to a Government department, you can sell to any large corporation," Barty said. "A lot of the major international IT companies got started on Government contracts in their own countries. The Government does not have to accept sub-standard technologies, it is just a matter of sourcing their requirements here before they go looking overseas."

While the Government is doing its best to ignore procurement issues, opposition parties have spotted a weakness and are milking the issue for all it is worth.

Carmen Lawrence told ARN of plans to address industry concerns regarding Government procurement. "We are critical of the way the outsourcing excluded Australian companies," Lawrence said. "We are keen for Government procurement to become a way to encourage local industry to invest in R&D and innovative work that might be too risky for the private sector."

Government procurement is also an issue in regional areas, where channel players have long been eyeing off Government work denied to them because it requires a national or statewide tender.

Joe Droguets, director of Townsville-based Agire Networks, pointed out that regional channel players miss out on Government business because of the centralised approach. "I would like to see Federal and state governments review central purchasing policies to give regional IT companies a go," Droguets said.

Skills shortage

The Government intends to attack the skills shortage on two fronts, through increased education funding and an emphasis on the skilled migrant program. Despite welcoming the measures, many in the industry are concerned the Government has not gone far enough.

The AIIA's Durie is one of many who would like to see more done. "We are talking about a shortage of 30,000 and the Government has responded with 2000 university places a year, across three years," Durie said. Furthermore, opposition parties point out the announcement of increased funding comes after years of budget cuts to universities, TAFEs and the CSIRO.

Maree Lowe, managing director of Sydney-based OEM and integrator ASI Solutions, would like to see more opportunities for the private sector to work with universities and other research bodies. "The future of the industry lies in the Government's long-term strategies for education and research facilities like the CSIRO," Lowe said. "There must be a commercial outcome at some point. These institutions should be seeding areas for future development in the IT sector."

While Lowe is concerned that most research should have a commercial goal, she also believes there should be more of a focus on training and upskilling people, rather than just providing more under-graduate places at universities.

The Democrat's Stott Despoja is adamant that the present Government needs to make science and IT a more attractive career option by offering HECS concessions and taking a more holistic approach to improving IT skills.

"Computer literacy is going to be as necessary as learning to read. The Government should be looking at opportunities in the school system," Stott Despoja said. "They also need to look at how to go about implementing improvements in IT skills."

However, education is not limited to universities. Alan Greg, executive director of Adelaide-based software development company Prophecy believes the industry should play a greater role in the direction taken by education bodies.

"Addressing the skills shortage isn't about providing for the skills we require today, but about having some idea about what the market place is going to look like in the future," Greg said. "The industry needs more of an incentive to train staff on-site and upgrade their skills as required."

Riding the wave

Policy shifts aside, it appears the tide is turning for the IT sector. The time and energy that has been put in to lobbying Government is finally beginning to pay off as all the major parties turn their attention to IT-related issues.

With an election on the way, for the next few months at least politicians from all walks of life will be open to suggestions from their constituents and interested in talking to business leaders.

ACS's Ridge believes the current level of interest in the IT industry is the result of the industry itself becoming significantly more competent in its approach to Government leaders. "We have often managed to make the Government aware of the industry, but now we are finally making them understand what is required to foster the industry," Ridge said.


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