From the stump-jump plough and the black box flight recorder, to Cochlear implants and Wi-Fi — Australians have a remarkable record in innovation.
But we are in danger of losing our status if our laws and policy settings do not keep pace with the speed of digital innovation.
The Australian government has a significant opportunity to do more to bolster its policies, processes and funding models so they can support digital innovations.
I point to a quote from the new member for Wentworth, Dave Sharma, who captured the fundamental issues we face in this space in his first speech to Parliament on 24 July 2019: “In 1967, the largest US companies by market capitalisation — and the main drivers of US prosperity — were General Motors, Standard Oil, Kodak, AT&T and IBM. Fifty years later, the top ranks of the Dow Jones index are dominated by technology companies: Apple, Alphabet, Microsoft, Facebook and Amazon.
“These companies are about data rather than goods, services rather than products, and spaces rather than places. A quick glance at the ASX20 suggests we’re yet to make this transition.“
We have a lot of good companies which employ technology in their operations; we don’t yet have a lot of good technology companies.
“In Australia, we have a highly skilled workforce, we have great research institutions and universities, and we have deep and sophisticated capital markets…it’s about capturing the jobs of the future, in areas such as quantum computing, cyber, artificial intelligence, space, clean energy, defence technology and automation.
“The nature of value creation is changing, and the Australian economy needs to keep up.”
Capturing new value creation models
There is substantial opportunity in the high export potential of regtech.
Global regtech spending is predicted to exceed $188 billion by 2024, up from $37 billion in 2019 — and Australia already has the potential to be a global player.
There are several initiatives that the current government can do to take advantage of these opportunities — such as taking a leading role in creating an ecosystem to facilitate the transfer of technological innovations across all sectors of the Australian economy.
A percentage of fines imposed as a result of the findings of the Hayne royal commission and other government agencies could be allocated to support regtech innovation dedicated to addressing the establishment of a viable and robust ecosystem.
The challenges in becoming a global player in regtech are significant, and they begin with the problems of domestic investment that are preventing Australian innovation from underpinning the global regtech transformation.
The government’s Accelerating Commercialisation program has a role to play and a reform in current funding allocation would be beneficial to regtech as it seeks to become a national growth sector.
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