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Australia’s ICT Industry

International respect for Australia’s information and communications technology prowess is turning the offshore tide – Suddenly, we’re the prime spot for call centres. But there is a hitch. We need bigger companies to really cash in on this reversal of I.C.T. fortunes.

Active ImageMeanwhile, our I.C.T. talents are notching up remarkable success overseas, but could notch up more (another hitch) with more lateral thinking about export markets. Joe Parkes reports.

It’s the quintessential export industry for small and medium-size enterprises: a multi-billion dollar foreign currency earner in which 90 percent of its exporters employ fewer than 10 people. The Information and Communications Technology (ICT) industry is also a dazzling showcase for the best of Australia’s skills in innovation, practicality and creativity.

Not only that, it’s full of surprises. At a time when the media bemoans the enthusiasm of Australian companies to ‘offshore’ their call centres to India, overseas corporations are beating a path to our door to establish Australia-based call centres that take advantage of the country’s practically unparalleled expertise in foreign languages, communications networks and cutting-edge technology.

"People think it’s all one-way traffic in Australian companies exporting their call centres to India,"says Sheryle Moon, CEO of the Australian Information Industry Association (AIIA). "But Japan is doing the same thing with us, sending their call centres to Australia because we have such a high proportion of Japanese-speaking people here, far higher than in Southeast Asia, Europe or America. We’re succeeding in attracting ICT business opportunities in areas we don’t always expect."

Far from being a feared competitor, even India is now a target for Australia’s innovative ICT niche products. The AIIA has signed an MoU with India’s leading ICT industry association, the National

Association of Software and Service Companies, to promote bilateral trade relationships, build alliances, and facilitate joint ventures among member companies of the two organisations. Already, almost all of India’s major banks are being driven by Australian-developed software and, in a novel twist, the company responsible for creating it, Sydney-based Financial Network Services (FNS), has been bought by the Indian ICT giant, TATA Consultancy Services.

All of India’s top ICT companies have branch offices in Australia, mainly in Melbourne and Sydney, according to Sumeet Kumar, senior ICT industry manager at the NSW Department of State and Regional Development. They employ more than 1,000 Australians in a range of pursuits, from call centre operations to data storage and application development work.

With all this action, you’d have to wonder if things could possibly get any better. Well, yes, they could. While Australia’s $5 billion annual ICT export performance is impressive, local industry continues to import around $19 billion worth of ICT products, mainly in software packages like Microsoft Windows. "Our disadvantage tends to be the size of our companies," says Peter Harrison, Austrade’s national ICT export services manager. "Of Australia’s 25,000 ICT companies only 2,500 are currently registered as exporters or are export-ready, and most of them are small. We really need more companies with up to 200 people on staff to tackle the big opportunities that emerge on the international ICT market."

He also thinks we lack a breadth of vision when it comes to choosing markets. "Around two-thirds of our exporters still regard the United States and Britain as their priority markets," he says. "But this interest is not based on enough market potential analysis." Britain, he says, is a very conservative, competitive and network-based market, and the US is both conservative and litigious. But exporter priorities may be changing. "There’s increasing interest in opportunities in markets like Singapore, Indonesia, the Middle East, Malaysia and India, where there are opportunities in the health, finance and transport industries. China’s interest in ICT products like smartcards is growing rapidly," he adds.

Sheryle Moon is a bit more laidback about our enthusiasm for the American market. "The United States, the largest ICT spender in the world, is still where many Australian companies are seeking opportunities," she says. "Australia has developed some important army and navy clients there who purchase highly specialised Australian-made niche defence systems." She makes special mention of Canberra-based Tower Software, which created a records management system to solve its own company records-management problems and went on to sell the process to the US Department of Defense. The company has since established successful contacts in Europe and Asia, servicing a variety of financial applications like electronic transfers.

But Moon also sees an important part of Australia’s ICT export future in Oceania and Southeast Asia. "It’s becoming clear this is the fastest-growing area of opportunity for Australian ICT exporters, especially among small and medium size enterprises," she says, before warning those companies new to export "not to re-invent the wheel". "Learn from the mistakes of other Australian companies that have been very successful in exporting," she urges.

ICT Assistance

There’s more assistance from Austrade, which has 67 ICT business development managers spread across its 140 offices worldwide, all focused on working individually with Australian companies to help boost exports.

The Australian Interactive Multimedia Industry Association (AIMA) has a national network of export assistance offices and is in partnership with a range of private and public sector organisations as well as organising delegations to markets like China, and participation in trade fairs. The Australian Services Roundtable comprises senior industry representatives from specialist firms in banking, insurance and securities, accounting, the law, engineering and architecture, health, education, the environment, energy, logistics, tourism, ICT, transport, food distribution, standards, media, entertainment, and culture.

Austrade adds to the mix with financial support from the Export Market Development Grants Scheme and programs like its Export Coach online modules where new exporters wanting to learn the nuts and bolts of export can log on for a thorough briefing. The export finance and insurance specialist, EFIC, has a new finance product—EFIC Headway—that provides security to a bank to enable it to lend additional funds to SME exporters without requiring additional security; in essence, a guarantee from EFIC to a bank.

The US, too, provides enthusiastic backup and support for ICT exporters. Kumar says the US has strategic tie-ups with international regions and Sister City relationships that they use to leverage new opportunities for exporters, organise independent market visit programs and trade shows, and run new exporter programs.

NSW is organising a series of new clusters—groups of like-minded companies in an industry group—working towards expanding exports. "Australia excels at providing high quality total software packages," he says. "It is one of our most attractive attributes."

Digital Technology Revolution

Want to make an ICT exporter’s mouth water? Tell him that the United Nations telecommunications agency estimates there are now about two billion people around the world talking, texting, photographing, MP3-ing and filming with their mobile phones every minute of the day.

The UN reckons personal digital technology is expanding at a revolutionary pace and that’s music to the ears of a consortium put together by AIMIA with the m.NET Corporation, Kukan Studios, and Yahoo! (with support from AusIndustry) that is
developing a new program called the Mobile Content Export Navigator Project. The sole purpose of the two-year research initiative is to help Australian ICT companies develop portable content for distribution to mobile phones and other handheld media devices, and to assist them in taking it to overseas markets.

Conference and exhibition organisers, Association and Communications Events, is also organising a major forum—Mobile Content Australia 2007—on March 27 to 28 at the Sydney Convention Centre, to help producers target higher profits through the distribution of customised content to mobile platforms. The organisers say mobile content "is the hottest new area in media" and the forum is aimed at 3G network carriers, content developers and owners, operators, third-party information providers, and video, internet and broadcasting content providers.

Male Dominated ICT Industry

Women have been fleeing the technical professions with most of the impact being felt in ICT. The effects of this desertion are having a very negative impact and the situation is not being helped by the fact that, while female students are shining in maths and science, they are resisting moves into the male-dominated ICT industry.

The Australian Information Industry Association’s (AIIA) Sheryle Moon says that in 1998 about 20 percent of the ICT workforce was female but this had fallen to round 19 percent.

"We don’t understand all the reasons for this, but one cause has been that women like me have moved from the ICT shop-floor to management, while others have moved out of organisations that produce ICT services," she says.

Girls leaving Year 12 generally had better scores than boys in maths and science but when they went to university they applied that ‘intellectual horsepower’ to other pursuits.

"It’s not just ICT, participation by women in architecture and research is at an all time low," Moon says. "Science and technical industries are all suffering from not being able to attract women to the industry."

AIIA and the Australian Computer Society, the national association for IT professionals, are chairing a group set up by the Federal Government to implement the recommendations of advisory committees in 2006, which examined work skills with a view to changing the image of the ICT industry among students, as well as addressing curriculum issues and ways to make the industry more flexible and attractive for women.

Case Study: Driving Success

Active ImageThe path that leads to export success can start in the most unlikely places. In the case of Brisbane-based transport technology specialists, Vigil Systems, it was alarm in newspaper headlines about the lack of skills among young drivers on Australia’s roads. By a roundabout route, it led the firm’s founders, Ian Haynes and Bob Gibson, to develop Vigil’s Intelligent Transport System (ITS), VigilVanguard, designed to train all types of professional drivers, including bus, taxi, fleet and mine-site drivers, during on-road training sessions.

At its core, ITS is a cost-effective alternative to driver simulator technologies which delivers unbiased reports of drivers’ skills. It is proving a winner with many of the biggest publicly listed passenger land transport companies in the world—like Singapore’s ComfortDelgro, which has a fleet of 35,000 vehicles, Hong Kong’s Kowloon Motor Bus, the Toronto Transit Commission, and the Washington Metro.

Vigil Systems’ success in the extremely competitive US market recently saw it win one of the top two awards in Deloitte’s American ‘Rising Star’ honours. One highly satisfied customer, Mark Anderson of the Los Angeles Metro system, says transit authorities throughout the US are adopting the company’s VigilVanguard system. The company had taken its innovations a step further by introducing a complementary driver risk management system called VigilManager, which collates, stores and manages information on individual bus operator performance to predict and prevent accidents. "Interest among transit authorities in the US is already strong with Los Angeles Metro, the second-largest US transit authority, now using VigilManager," he says. Vigil says its ‘behind-the-wheel’ driver training tools are now the most popular risk management systems among Californian transit authorities, and Vigil Systems believes the ITS program has the potential to become the standard for driver training systems all over the world.

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