AUS
NZ
UK
CA
USA
IND
Summary
- The government will spend AU$1.2 billion as part of digital economy strategy.
- AU$100 million has been earmarked for honing digital skills of tech workers.
- AU$124.1 million is set to be spent on artificial intelligence.
- IT shares roar
In his Federal Budget speech, Australian Treasurer Josh Frydenberg said that the Scott Morrison-led Liberal Party government would be investing AU$1.2 billion in “Australia's future through the Digital Economy Strategy”. The move has sent the ASX-listed technology shares soaring.
Of this allocation, the most glaring announcement was the Government’s plan to spend AU$100 million in a bid to boost the digital skills of Australian citizens to “meet the needs of the modern Australian workplace”. The government also committed to spend AU$124.1 million on artificial intelligence (AI), including a National Artificial Intelligence Centre led by CSIRO Data 61.
To put it simply, the Australian Federal Government is planning to spend 8.33% of its digital budget for making Australian tech workers future ready. It is also allocating another 10.3% of the AU$1.2 billion digital budget towards AI – classified as an emerging technology in the IT/ITeS parlance. Perceived as gamechangers, the emerging technologies include cognitive robotics, artificial intelligence, and machine learning among others.
This, according to experts, is a significant development. Most tech companies across the globe have been battling a huge issue on the human resources front in the past few years – the skills gap for the emerging technologies.
As the companies have moved to have more focus on things like artificial intelligence and machine learning, there has been an increased demand for workers with these skills. However, there has been paucity in supply of resources on this front, as curriculums across the globe are still not covering the new and emerging technologies.
This skills gap, in turn, leads to the escalation in the salary costs of the tech companies. The human resource experts suggest that a person with expertise on emerging technologies has been, at an average, earning 25% more than his/her peers from the traditional IT space.
The government’s focus on boosting Australians’ tech skills might also help reduce the costs for the Australian companies, in the long run. Till now, the IT companies have majorly taken upon themselves to reskill their workers on the emerging technologies. A policy thrust towards it is obviously a gamechanger.
Investors, meanwhile, seem to have endorsed the government’s plan on tech spending. Even as the ASX200 is down by 80 basis points, the ASX’s IT sector index – ASX 200 Information Technology – is up 2.016%. The shares of top information technology companies are rallying: Afterpay Limited (ASX:APT) is up 2.12%, Xero Limited (ASX:XRO) is up 1.71% and WiseTech Global Limited (ASX:WTC) is up 1.52%.
