Australia has seen its technology sector spawn a number of advancements in artificial intelligence (AI), fintech and cleantech, among others.
The country’s characteristically resilient economy — which has not experienced a recession for 27 years — has provided a sturdy backdrop for its growing tech sector. As economies worldwide face uncertainty, Australia’s job market continues to defy global trends.
In fact, in July, Australia added over 41,000 new jobs, almost triple the amount anticipated by economists, Bloomberg reported. In turn, companies at the international scale are paying attention.
For instance, in April, Google (NASDAQ:GOOG) launched its inaugural commercial drone delivery system in North Canberra, Australia. The service — called Wing — delivers food, coffee and retail items by drone to residences. Orders are placed through a mobile app.
Similarly, Japanese tech conglomerate Softbank (OTC Pink:SFTBY,TSE:9984) began investing in Australia in 2016 through the acquisition of AI and robotics firm ST Solutions. Its flagship robot, Pepper, is designed to greet customers in 21 languages using emotional response analytics. Pepper is at the forefront of Softbank’s robot innovation initiatives.
As these large tech companies invest in Australia, a handful of Australian unicorns have also garnered attention. According to CB Insights, there are 300 unicorns globally, and three of those — Canva, Judo Capital and Airwallex — reside in Australia.
Design startup Canva, for example, is estimated to be worth US$2.5 billion. It has over 15 million monthly active users and 80 percent of Fortune 500 companies use its services. In May, it acquired both Pexels and Pixabay, broadening its stock photo subscription model service.
As Australia’s tech sector grows, the Investing News Network is taking a look at the top tech trends and future outlook for that nation’s burgeoning tech sector.
Australia tech outlook: Top tech trends
Underpinning Australia’s current tech ecosystem are its advancements in three core sectors: fintech, cleantech and gaming.
According to Deloitte, the fintech sector in Australia is both maturing and scaling at a steady clip, making it ripe for investment. In its “Technology Fast 50 2018” report, Deloitte highlights AfterPay Touch (ASX:APT), MATE Communicate and Superloop (ASX:SLC) as the top technology companies in Australia.
For its part, EY reports that 60 percent of Australians use fintech applications, with adoption rates rising 27 percent since 2017.
When it comes to cryptocurrencies, Australian exchanges CoinJar and Coinspot allow users to buy and sell digital assets. In August, Gemini, the Winklevoss-run exchange, also launched its services in Australia, offering users the ability to exchange bitcoin, bitcoin cash, zcash, litecoin and ether.
Emerging as a leader in the cleantech sector, Australia is making strides in wind and solar power as well as energy storage. In early 2019, the city of Melbourne began using wind to power 100 percent of its municipal infrastructure, such as universities, town halls and street lights.
As part of a 10 year agreement, members of the Melbourne Renewable Energy Project will purchase 88 gigawatt hours of wind power annually from Pacific Hydro; the deal resulted in the creation of nearly 150 new jobs. According to Fast Company, this new business model has spurred renewable energy contracts from several large corporations in Australia.
As Australia makes formative moves in renewable energy, it is also showing explosive growth in the gaming and esports sectors. According to a report from the University of Melbourne, in 2018 there were an estimated 300,000 spectators for esports events alone.
Since then, Fortnite: Battle Royale has emerged at the 2019 Australian Open as the most popular esports event of the year. Additionally, esports companies such as Esports Mogul (ASX:ESH), Emerge Gaming (ASX:EM1) and privately held iCandy Interactive have arrived in Australia.
As the esports sector continues to expand, it has attracted international partnerships. In 2018, Riot Games, publisher of League of Legends, partnered with the Australian Football League and brought an esports event to the Margaret Court Arena in Melbourne, a stadium that seats 4,000.
Australia tech outlook: What’s ahead
Looking ahead, Deloitte has made seven predictions for the future of tech in Australia. With major sectors such as esports, AI, 5G and quantum computers leading the way into the future, Deloitte states that interoperability with cloud networks will drive tech adoption.
According to the Australian Computer Society, an additional 100,000 jobs in tech will be in demand between 2018 and 2023. This represents an annual growth rate of 2.3 percent, rising almost twice as fast as the rest of the Australian workforce during this time.
In light of this, the capital markets are starting to recognize demand. In July, ABC News reported that the Australian Stock Exchange aims to become an epicentre for tech listings. Currently, technology listings make up under 3 percent of the exchange, with the majority being commodity and agricultural companies. The exchange has been working to shift this trend. Over the past few years, it has focused on recruiting more late-stage tech companies to access greater pools of capital.
Underscoring this growth are key economic factors. According to the Organization for Economic Co-operation and Development, non-mining investment, government funding and a low unemployment rate are key pillars that are supporting the Australian economy as a whole.
While the foundation is projected to remain strong into 2020, the capital markets are also providing a supportive backdrop for the tech industry.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.