Calling all gaming developers. Your country needs you. Now!
It’s an unusual (digital) call-to-arms but Jane Hume, the Federal Minister
with responsibility for the Digital Economy, argues that aspiring tech
titans should focus their coding wizardry on gaming software.
“That’s the one where we see real potential,” the Minister explains, during a wide-ranging interview to
discuss Australia’s future as a digital economic powerhouse. To illustrate
this point, Senator Hume cites the gaming industry’s global revenues –
around $250 billion annually – and the fact that Australia’s share is a
modest $145 million.
"Yet the technology in the games industry is very compatible with other
areas where we already have a competitive advantage, such as film, which is
going gangbusters,” Ms Hume says.
There’s another compelling reason to back the gaming industry: it inspires
young Australians.
“We talk about getting kids into STEM and they roll their eyes and say,
‘how boring’ and then you say, ‘well you could actually be a games
developer’. And they go, ‘oh, can we?’.”
Aside from inventing the next Minecraft, there is a mountain of work to be
done if Australia is to become a “leading digital economy” by 2030, as the
Prime Minister has predicted.
Senator Hume admits to being excited by the challenge.
“As the Prime Minister says, every business is now a digital business,” she
says, using the following examples to emphasise this point: “Some people
talk about bringing retail online, and how they pivoted during COVID; some
people think about how Australia Post now sends you a text message saying
your parcel’s about to arrive; some people think of drones flying over
agricultural properties, doing the stuff that used to require taking a
satellite picture of your property, then telling you which of your fields
and paddocks needs different irrigation.”
There’s no doubt the pandemic has been a boon for online retailers and
digital platforms, such as eBay, Kogan and Amazon. At the same time the
tech sector has expressed some reservations about an increase in regulatory
oversight−Despite these concerns, the Minister is adamant that Australia
has got the regulatory settings just right.
“We are a safe and trusted partner (for the tech sector) and one of the
reasons that we are is because the environment which we are creating, in
which tech can flourish, is a considered environment."
Yes Minister, but surely, you’ve heard grumblings from the tech sector?
“When a company has been operating in an environment in which they are not
necessarily comfortable, they will complain that we are overregulating,”
she responds. “But I actually think that if you have a well-developed
regulatory environment, not an over-developed regulatory environment, it
actually allows for the digital economy to flourish much more, particularly
for smaller organisations who might be hesitant about adopting digital
technology.”
Not surprisingly, these “smaller organisations” are a key focus for the
Government. Senator Hume believes there’s a massive dividend for Small and
Medium-sized Enterprises (SMEs), citing e-invoicing to illustrate this
point.
“There’s something like 1.9 billion invoices issued every year in
Australia,” she says. “If we transition to e-invoicing, that will save $20
per transaction, which is just mind blowing isn’t it?”
More broadly, she says, the pandemic has been a catalyst for change. A
report by McKinsey estimated that Australia, at the height of the pandemic,
vaulted five years forward in consumer and business digital adoption in
just eight weeks.
“SMEs have had more growth in three areas − web presence, use of digital
payroll tools, and digital stock control – in the last year than the
previous ten years combined,” she enthuses. “There is a momentum here that
is quite extraordinary. The question now is, how do we build on this?”
It’s a good question. For every Atlassian and Canva, there are scores of
failed start-ups and Australia’s risk-averse culture has been blamed for
holding back this homegrown tech sector. The perennial issue of lack of
funding remains front of mind for Senator Hume who argues private capital
has a major role to play in supporting the next generation of tech titans.
Mind you, she’d also like to see more support from the $1.5 trillion-plus
superannuation industry.
“There is an argument to say super funds tend not to invest in that smaller
technology [business] because they can’t see the benefit in something that
is so small scale; that it doesn’t add all that much to their portfolio,”
she said. “But, at the same time, if they don’t invest in that small scale
stuff, well then they’ll miss out on the ride.”
To drive home this point, she adds: “At one stage, Canva was really small,
but those foundation investors are laughing all the way to the bank now −
and I imagine the super funds wish they were a part of it.”
With a background in the financial sector (Senator Hume worked for NAB,
Deutsche Bank and Rothschild Australia before entering the world of
politics), the Minister is well versed in the intricacies of funding
small-scale investments.
“The eco system here has not really had that organic leaning towards risk.
We are quite a risk averse capital market, but at the same time I think now
we are seeing a change in that,” she says. “All you have to do is look at
the BRW Rich List. Five or six years ago, it was full of
people that were in property; now it’s full of people who are in tech.”
Just months out from a federal election, Minister Hume is keen to talk up
Australia’s potential to become a global powerhouse, mentioning quantum
computing and RegTech where, she says, we are ranked No 3 in the world.
Then there’s Artificial Intelligence (AI), a truly revolutionary technology
which is developing at a blistering pace and forecast to be valued at
hundreds of billions of dollars within a few short years. But – and here’s
the geopolitical rub – AI is also contributing to the growing tech divide
between China and the United States.
The recent AUKUS announcement – the strategic alliance involving the US,
Britain and Australia – is only going to exacerbate what Canberra insiders
call the ‘digital curtain’ dividing western democracies from authoritarian
regimes like China.
So, how does the Minister see the future when it comes to working with
Chinese tech firms such as Didi, WeChat and Alibaba? Does AUKUS put an end
to these Oz/Sino alliances?
Senator Hume chooses her words carefully: “I think there are already plenty
of cases where Chinese and Australian tech work together, but it always has
to be done with an awareness of sovereignty, and an awareness of the values
that are associated with tech.”
The Minister cites AI as a prime example: “We want to be part of a global
conversation that ensures that AI is used ethically and responsibly and
inclusively; that there’s a set of ethics’ principles involved that
respects human rights like privacy and autonomy, and that there is
transparency, so that you know when you are dealing with AI, as opposed to
the person. There should always be human oversight and accountability.”
Further, she says: “And that is why it is really important that Australia
really leads the way in things like establishing AI ethics principles or
data sharing standards.”
The challenge for the Australian Government is that Chinese tech firms are
required to comply with their national security laws which means they’re
forced to hand over sensitive consumer data, if ordered to by China’s
intelligence agencies. This is the prime reason why Chinese tech giant
Huawei was banned from Australia and the US, and why British
parliamentarians recently called for a country-wide ban on ride-share
company DiDi.
Why then would you have any confidence that your data won’t end up in the
hands of some Government official in Beijing? The Minister replies: “I
think that would find China increasingly isolated in the global community.
We are so globally connected and that is why it’s really important to be
leading the conversation setting those data standards, setting those AI
ethics principles; it’s really important that it comes from Australia, that
has a unique set of values.”
Finally, is there an argument Minister for putting up barriers to Chinese
tech firms given they are at the behest of their Government?
“There was always going to be a level of due diligence that was going to
take place with companies from countries that might not share our values,”
she says.
“As far as blanket bans from Government, that is probably more in the realm
of Home Affairs, rather than (myself).”