Govt commits $6m to foster Australia's own Silicon Valley

The Federal Government has committed $28 million to promote “high-tech jobs” in the transport, financial services and digital sectors.

The funds will be used to set up three research and industry partnership groups, with matching funds to be drawn from industry.

The Creative Digital Innovation Partnership has already signed up IBM Australia, the Commonwealth Bank and NICTA, and will receive government funding of $6 million to 2016-17. It will also be supported by the University of Technology Sydney, Australian National University and the University of Melbourne.

In a statement, Innovation Minister Kim Carr said the aim was to create a globally recognised Australian digital hub, rivaling Silicon Valley.

The hub will be based at Ultimo, which the government said is already home to 240 tech startups.

NICTA Queensland Research Laboratory director Simon Kaplan said the Digital Innovation Partnership would focus on digital transformation, helping organisations develop different business models, and embedding technology skills and learning across all sectors, not just ICT.

“Every sector of our economy needs to transform because of the rise of IT,” Kaplan said.

However at a recent Australian Information Industry Association event on digital transformation, Hills Holdings chief executive Ted Pretty said it was up to industry to tell government what was required to help it be successful.

“I don’t want to be told that I have to innovate in a precinct,” Pretty said.

“I don’t want to be told that I have to fit under a government policy around coalescence.”

Kaplan said different people would engage with the precincts in different ways, but said it was vital universities and industry worked together to ensure what was built outlasted any particular government funding cycle.

“I think he’s absolutely right that innovation should be part of the bedrock of a country and not something that happens occasionally when he government decides to drop a little bit of money on top of it.”

Kaplan said there was already an existing concentration of tech startups and digital industry businesses running from Sydney’s Redfern to Pyrmont.

“The precinct is about doing what we can to foster those kinds of concentrations because interesting stuff comes out from the serendipity that happens in those kids of environments.”

The Financial Services Innovation Partnership is being led by big data technology specialist SIRCA and has the goal of creating 30,000 high-value jobs and making Australia a leader in financial services technology.

SIRCA strategy and innovation director Paul McCarthy said Australia’s financial services sector was lagging other countries on exports, despite the sector’s success stories being strong on technology.

“It’s our biggest industry, it’s an important employer, but when it comes to exports we're rubbish, it’s half a percent.

“So in an increasingly globalised world we’ve got a very valuable but very insular industry.”

McCarthy said while some Australian financial services innovation centred on business models, a lot of it related to technology, presenting a significant opportunity for the sector.

A group of businesses, universities and state governments plan to match the Government’s $15 million investment in the initiative, which will see a "Financial Services Exports Lab" established in Sydney with 50 researchers and students focused specifically on financial services industry innovation and exports.