Australia’s sovereign technology industry to power our economic recovery

This article originally appeared in The Australian

Since Australia’s pandemic lockdowns, the Commonwealth Government has called on Australians to support our local tourism industry by encouraging domestic travel to counter the huge drop in overseas visitors, most recently via its tourism stimulus package.

It’s a natural response and something Australians can easily get behind. As the pandemic response continues and the global economy remains uncertain, our sense of mateship is filtering into other industries. We’re starting to realise we must take greater control of our destiny if we are to uplift local industry, create jobs and grow our national wealth.

The Government has developed its blueprint for re-energising the nation, laying the foundation for a stronger economy that includes a greater emphasis on sovereign manufacturing, local or nearshore supply chains and more robust sovereign capability development. Local cloud computing and cybersecurity capabilities should now be an important part of this push for stronger sovereign economic resilience.

Tipping the tech industry’s scales

As our economy increasingly digitises, cloud has become a central theme of economic and political discourse. Cloud technology, which is now equally available to homes and businesses after years of strong Government investment into NBN, was essential in keeping Australian businesses operating throughout 2020.

Before the pandemic, Australia’s cloud industry was already rapidly growing. COVID-19 has supercharged that growth, but, if home is where the heart is, when you look at the facts behind where our data lives, our hearts have been in the wrong place. The estimated $1bn plus industry is largely dominated by five foreign providers.

Not only does this reduce Australia’s share of the pie, it creates additional risks to our cybersecurity and data protection. We need to be mindful of where data is stored, who can access it, and the jurisdiction or jurisdictions to where the companies providing our cloud services are subject, a point made clear in the recent Hosting Certification Framework championed by Minister for Government Services Stuart Robert.

Foreign cloud providers – usually multinational corporations – use their global footprints to provide support services in multiple regions24/7/365. This means after-hours services to Australian customers are likely to be provided by ‘follow-the-sun’ support staff located outside of Australia, and less cleared to Australian Government standards.

The imperative to drive stronger sovereign economic resilience means there is impetus to level the playing field, improve our cyber security and data protection posture and bring our sovereign data home. This is incredibly timely with the ASIO recently declaring nation-state espionage will surpass terrorism as the greatest threat to Australian security by 2025.

Secretary of the Department of Home Affairs Mike Pezzullo also recently said that “over the next few years we’re going to see more data coming back onshore than we thought would have been the case because of data sovereignty and privacy”.

This increasing sovereignty focus recently saw the launch of a new Canberra data centre hub, which will combine Oracle’s cloud services for Commonwealth agencies with a locally run central data hub, reducing the Government’s risk exposure to data stored offshore.

A cornerstone to wider economic recovery

Coupled with the priorities detailed in the October Budget and the resulting ‘We make things in Australia’ mantra, local cloud companies have the chance to underpin our economic recovery and help power the Government’s sovereign economic policy agenda to generate growth.

A vibrant, growing and highly capable cloud industry and stronger focus on cyber security will enable other sectors, vital to Australia’s recovery, to supercharge our economic recovery. Cloud is a horizontal market that traverses every other industry in Australia, creating a multiplying effect by getting it right.

Some of the focus areas of the Government’s sovereign manufacturing policy – notably resources and defence – are high-value cybercrime targets. Further, a lack of digitalisation within manufacturing has contributed to its decline in recent years. Better adoption of cloud and digital technologies can help correct manufacturing’s course, just as it has done in other industries.

Just as the Government ‘s Security of Critical Infrastructure Legislation has put a renewed focus on the importance of protecting our critical infrastructure, that protection should extend to include its data. Data in these environments has become as important as the infrastructure itself, as proven by the recent attack on a water treatment facility in the US.

Cloud services affect every point in every supply chain – in medical and defence manufacturing, food/agriculture, energy, utilities and more – and should be treated just the same as the products and services created by those critical industries. A sovereign digital supply chain supporting these industries will reduce risk, increase Australian digital capability, and create the jobs our economic recovery needs.

Multinational cloud providers will still play a vital role, particularly as hybrid cloud becomes more prominent and help drive our IT services market to $23 billion by 2023. There is an opportunity for these companies to uplift the local sector, as the Oracle cloud ecosystem has been designed to do.

To do this, multinational corporations should consider a close partnership model where mutual benefits to them and Australian industry are enabled, creating a stronger, more profitable Australian industry.

Urgency is needed as this is not a position we’ll naturally arrive at; Government should guide its frameworks and further legislation as they mature towards sovereignty and technology regulation strategies, and industry bodies tasked with promoting Australia’s domestic technological capabilities should do their part and help support local companies’ position.

The Government’s commitment to this vision for Australia and its combined market power as the largest spender on ICT will help. It can further enable businesses with sovereign procurement of cloud and cybersecurity services to continue to build momentum for Australia’s technology sector.

Should that happen, industry will follow by investing more into local technology infrastructure, jobs and skills development. As a nation, we’ve pulled together before. It’s now time to do it again.