Aussie tech needs an attitude adjustment, not subsidies, says Mike Cannon-Brookes

Mike Cannon-Brookes says Australian tech companies need governments to ‘just get out of the way’, after the industry was left empty-handed in the federal budget.

Mike Cannon-Brookes says the tech industry is an exporter, just like mining or agriculture, yet it often doesn’t get treated as such.

Australian tech companies don’t need subsidies, they just need governments to “just get out of the way”, argues billionaire Mike Cannon-Brookes after the local industry came away empty-handed from Jim Chalmers’ federal budget.

Australian spending on research and development has barely budged since the pandemic, despite the eruption of artificial intelligence, threatening to derail the federal government’s ‘smart economy plans’ as it slides down OECD rankings.

The federal government tapped Tesla chair Robyn Denholm to lead a review aimed at overhauling research and development incentives.

Despite the increased focus from the government, Treasurer Jim Chalmers did not mention AI once in the federal budget, prompting one tech entrepreneur to say there was more funding for pandas than tech founders.

But as Australians head to the polls to have their say, Mr Cannon-Brookes – who co-founded Atlassian that is now worth $US49.2bn ($80.5bn) – says Australia’s tech sector does not need any subsidies. It needs an attitude shift.

“We have to fight on a world stage. We don’t need a subsidy. We don’t need any of this sort of stuff, right? Any business is going to need to meet the competitive market at some point, probably very quickly, and learn to compete and to win,” Mr Cannon-Brookes told The Australian.

“We do have an ability to compete on a world stage. I think the best thing we can do in Australia is really understand our successes, champion our successes.”

TechnologyOne chief executive Ed Chung has also said Australian tech companies don’t need handouts, arguing businesses should “open minds, not palms”.

He said he was surprised at how little other Australian companies invested in R&D despite the benefits.

TechnologyOne chief executive Ed Chung.

Atlassian is building a 40-storey headquarters at Sydney’s Central Station, becoming the anchor tenant for Tech Central – a $1.4bn development.

The precinct will act as an incubator for other tech companies, with the aim of aiding Australia’s shift towards a smarter economy.

Mr Cannon-Brookes – who has said previously that Australia’s economy is too focused on “digging stuff out of the ground and exporting it” – says the opportunities tech presents were poorly understood by local policymakers and investors.

He said tech was no different to manufacturing and traditional forms of exporting.

“I remember sitting down with politicians and explaining to them 10 years ago that we’re an exporting manufacturer. They’re like, ‘No, you’re not’.

“I’m like, ‘Yes, I am. I manufacture stuff. It happens to be software that comes out of people’s heads, and people and talent are my ingredients. I don’t have steel or iron or anything that goes into them. I don’t use much electricity compared to everybody else. I have to run a few laptops, which turn out to be super efficient, but I manufacture stuff and then export it’.

“Well, north of 90 per cent of our sales are overseas. That’s the definition of exporting. I pay a bunch of people here who create a product that is fantastic, and I sell it overseas. I’m a manufacturing exporter.”

Construction is underway on global software giant Atlassian’s 39-storey headquarters, which will anchor the Tech Central precinct and spearhead NSW’s innovation engine.

Despite his explanation, Mr Cannon-Brookes said it still created confusion.

“They asked ‘where’s your factory?’ I’m like, ‘I don’t have one’. Or (they asked) ‘where’s your shopping?’ I’m like, ‘I don’t have that either, I use the internet’.”

And here’s the punchline. When policymakers asked Mr Cannon-Brookes how they could help the tech sector he replied: “just don’t screw it up – for any of us”.

“Just get out of the way, and I don’t mean that in a bad way. Literally, Australia’s technology is huge. It’s a fantastic, great industry full of really smart people. We’ve got a great education system on a world level – university, primary, high school education. We graduate amazing technical talent in this country for our size.

“How can we just allow them to create all sorts of businesses? We’ve got lots of examples right over the last 10 to 20 years, and we punch well above our weight.

“Think of us as a 25 million person state in America. Where would we rank for technology companies created on a world scale and export – whatever ranking you want to pick: billion dollar business, billion dollars in revenue … I think we’d rank pretty high of the 50 states in America. We’re pretty damn competitive.”

Atlassian co-founder Mike Cannon-Brookes.

And just like Australia got rich from exporting sheep in the 1800s, then iron ore and other resources in the 20th and 21st centuries, Mr Cannon-Brookes believes tech can become an economic powerhouse for Australia.

“I think we just talk ourselves down too much in terms of what we’ve done. I love that we have lots of great technology businesses that are exporting in all sorts of different industries in different ways.

“We want them to be global businesses, right? We want them to take on the world. We’ve always exported sheep, wool – figured out we could grow sheep, shear it, put it on a wooden boat and send it back to England and Europe. Great.

“I’m doing the same thing. I take a piece of software, and I shear the sheep kind of and I put it on a sort of boat and I send the boat through the internet. And guess what? The world gets it at the other end, whether that’s Japan, Korea, Germany, America, Canada, Brazil.

“We have customers in 200 territories. The boat arrives. The software didn’t degrade on the way there. This is great. I’m an exporter. We need more of these in Australia. It makes our economy run.”

Originally published as Aussie tech needs an attitude adjustment, not subsidies, says Mike Cannon-Brookes