Where Australia’s tech sector is clustering: CSIRO and Tech Council Australia report

Australia’s tech sector is increasingly clustered, with fears it could have a flow on effect on housing availability. A new report has shed light on where Australia’s burgeoning tech industry is centred, and experts say it comes with a warning for Australia’s already competitive housing market.

The report from the CSIRO and the Tech Council of Australia was compiled to provide a geographic map of Australia’s digital centres. The report authors found the industry was unsurprisingly clustered in four major capital cities, but also identified 60 metropolitan suburbs and 36 regional towns. 

EIDA Editor: Some serious errors and omissions have been found in this report, see comments at the end of this abc.net.au/news story.      

They found that those specific clusters made up 62 per cent of all the tech jobs created in Australia.

They also analysed patent data and found that firms within capital city clusters were, on average, creating 63 per cent more applications than those outside them.

The report, titled “The geography of Australia’s digital industries”, was released as part of the tech showcase at federal Parliament House.

The researchers said they hoped their findings were a sign Australia’s tech landscape was thriving enough to prevent an exodus of local talent, but there are some concerns that innovation could come at a social cost.

Where are Australia’s tech jobs?

The researchers analysed workforce data from the Australian Bureau of Statistics, identifying areas with a higher proportion of workers in digital occupations.

Australians’ jobs are changing

Census data shows most Australian adults gained a qualification after leaving school, yet the nation still relies on migrants to fill skill gaps.

Australia’s capital cities are home to most of the nation’s tech jobs with billion-dollar companies – known as tech unicorns – like Atlassian, Canva, and Employment Hero based there.

Report lead author Stefan Hajkowicz from the CSIRO said the report reinforced existing research which has found that companies that cluster together grow faster and attract more skilled workers and greater investment.

“It’s no accident that if you look at Google, Microsoft, Amazon, have all put their headquarters very close to each other in Sydney,” he said.

“As these clusters form, the investment money gets attracted, which attracts more companies which attracts more workers which attracts more investment.”

The report said Sydney had 81 ASX-listed companies which employ 119,636 workers and a value of $52 billion on the ASX, while Melbourne has 62 ASX-listed companies which have 95,112 workers and a value of $203 billion.

Brisbane and Canberra are no slouch either, with 33,534 and 19,362 workers, respectively.

Regional areas like Daylesford in Victoria and Newcastle in New South Wales are also considered hotspots for certain types of jobs, like graphic designers.

What are the flow-on effects?

In the report, researchers said it was important to ensure the development of clusters was sustainable.

Hal Pawson, a housing expert at UNSW who was not involved in the report, said that when the tech industry took off in Silicon Valley, the area experienced an influx of well-paid workers who could afford to outbid locals, sparking “enormous turmoil” in the housing market.

But, Professor Pawson said the phenomenon wasn’t unique to Silicon Valley or major cities like Melbourne and Sydney, noting clusters in areas like Gold Coast, Sunshine Coast and Newcastle where lifestyle serves as a major drawing point for companies.

The report noted that while “the vast bulk of digital technology specialisations are in our greater capital cities … one of a few professions that defies this trend is graphic designers”.

“Whilst present in our cities, the ‘graphic and web designers, and illustrators’ profession is well represented in regional areas,” the report said.

In the report, CSIRO identified the beachside suburb of Burleigh Heads on the Gold Coast as a niche cluster for this profession, employing people in the industry at 3.2 times the rate of the national average.

Tech workers have also clustered outside of major capital cities in suburbs like Burleigh Heads on the Gold Coast.(ABC Gold Coast: Dominic Cansdale)

“It’s people in that demographic — many of whom don’t have kids either — and therefore are looking for entertaining things to do with their money and wanting to live in places where those entertaining things are available,” Professor Pawson said.

He said the tech sector differed from other industries in its tendency to agglomerate into geographic clusters.

“The desire of companies to cluster together with other companies doing similar sorts of things is stronger in this aera,” he said.

Hal Pawson says tech companies are more likely to cluster together, increasing strain on housing.(ABC News: Xanthe Gregory)

Australia not headed for a Silicon Valley housing crunch

The CSIRO’s Stefan Hajkowicz said while there was no data to suggest that the tech industry was impacting Australia’s housing market, international examples, such as Silicon Valley in the US, served as examples of how housing demand could increase when one city became the epicentre of a tech boom.

Cities in California’s Silicon Valley such as Palo Alto have struggled to balance their growth with housing affordability.(Unsplash: Mac Gaither)

“I know that’s a sensitive topic, but it’s an important one to look at,” Dr Hajkowicz said.

“Google put a billion dollars into affordable housing in Silicon Valley because for every one affordable apartment there are four people competing for it.

“We can look to the world and learn how to do this better … you don’t want that two-speed economy and society to emerge.”

Dr Hajkowicz said he hoped one of the benefits of the emerging industries would be retaining talent within Australia.

He said up and coming workers often felt like they had to go overseas to work in fields like artificial intelligence.

“For a while as soon as you got trained up by the Australian university system, you’re out to get a California salary but not just a California salary, the California opportunity,” he said.

“I think it’s time to put that one to rest in that we have the Silicon Valley equivalent here, you can make it in Australia, you can build your entire career in Australia.”

By:  Danny Tran

From:   https://www.abc.net.au/news/2023-08-01/csiro-tech-sector-australia-cluster-report/102670894       

EIDA Editor: The purpose of the report from the CSIRO and the Tech Council of Australia was to provide a geographic map of Australia’s tech centres. The report authors found the industry was ”unsurprisingly clustered in four major capital cities, but also identified 60 metropolitan suburbs and 36 regional towns”. The four major cities shown: are Sydney, Melbourne, Brisbane and Canberra. Adelaide was not included as a ‘major tech city’. The focus of attention was evidently focussed on the eastern states and ACT.  

Adelaide’s  “digital centres” are shown as: Adelaide City Central Business District, Payneham, Felixstow, Mawson Lakes, Payneham and Globe Derby Park.

The ‘total market capitalisation’ for the ‘tech sector’ in Adelaide is shown in this CSIRO report as $202 million. This is a seriously understated figure; Codan Ltd share price on 3/8/23 was $7.78 which gives Codan alone, a market capitalisation of $1.41 billion. 

See also:   https://www.forbes.com.au/covers/innovation/the-tech-hubs-youve-never-heard-of    

This article by Forbes, publisher of one of Australia’s most respected business journals expresses surprise at the inclusion of some unexpected ‘tech centres’ and non-inclusions. The report was compiled by CSIRO and Sydney-based Tech Council of Australia. Membership of The Tech Council of Australia includes prominent ‘creators’ of technology; Atlassian, Canva, IBM, Microsoft, Google, Telstra. Membership also includes many ‘users’ of technology; Carsales, Doordash, Seek, The Iconic (online clothing and beauty products) and Coinspot (crypto trader)..