One of the central areas of focus for this election season was how best to prepare Australia’s labour market for the seismic shift that the combination of the internet, ubiquitous computing and software proliferation is having on the global economy.
From banking to mining, the traditional sectors of employment in Australia are suffering significant job losses, and this trend is set to accelerate with technological advancement and new software creating new opportunities for everyone.
Worldwide, only one in four software developers work for software companies and 50% of the most chronically unfilled positions in Australia are technology-related.
With strong global competition to hire these skilled workers, talented technologists are optimising around their own happiness by choosing where they want to live, by seeking out employers that inspire, and by demanding increased workplace flexibility.
In today’s world, it’s the available talent more than incentives that bring technology-savvy employers and jobs into a country. If talent is the foundation of the great economies of the next century, then it is the beaches, surfers, mountains, art, culture, music, restaurants, neighborhoods, public transportation, and schools that play a critical role in making cities appealing to people who can choose to live just about anywhere.
For Australia, this is an advantage that must be leveraged. Sydney, Melbourne and Brisbane already attract workers from across the world with their beaches, warm weather and diverse cultures.
Sydney in particular is the 14th largest city in the world by GDP but the number five most popular destination for talent. Overseas job seekers are three times more likely to click on a tech-related job than any other advertised in Australia. For engineers with expertise in the java programming language, Australia already outranks the UK and Germany as a top destination for talent.
The smartest employers are following these technology workers to the places they want to live, setting up software engineering offices and remote innovation centers in the cities around the world with thriving communities of technical talent.
Australia’s Atlassian and Big Commerce, for example, both hire software engineers in or from far-away Austin to take advantage of the city’s booming population of technology workers. Likewise, Google has offices in Australia, allowing them to take advantage of the local software engineering talent.
With well-established paths of migration of skilled workers from Europe, the U.S. and Asia, the vast pool of workers knocking at Australia’s door offers an opportunity to strengthen the tech sector and grow the Australian economy.
But there are two sides to the story and while the beaches and diverse cultures provide are an appealing prospect, high housing costs and increasing cost of living threaten the future waves of talent to relocate to the antipodes.
This is where Australia must learn from the warning signals emanating from Silicon Valley and the Bay Area.
While the Valley is still the hottest market for tech talent globally, there is an increasing exodus among 30-41 year-olds who have cut their teeth in the tech industry and are looking to take their talents elsewhere.
Our data show that we have likely reached ‘peak Silicon Valley’.
The reason is simple – the Bay Area has the most expensive rents in the US and also highest among people ages 31 to 40.
The outward talent migration comes down to the fact that people are leaving to find better opportunities elsewhere or to settle down in more affordable areas where they can improve their quality of life. Cost of living and quality of life are inextricably linked.
When housing prices get too high, the talented and the mobile look elsewhere. Similar trends can be seen with migration of tech talent out of London, not to other UK cities, but to Berlin and other tech hubs.
Here is where Australia has an advantage as a leader in workplace flexibility. Employers are underestimating the interest from highly-skilled workers in flexible options. New technologies have given rise to new ways of working, and work is now no longer needs to be centralised in CBDs.
Over the coming decades, Australia has the potential to grow to become a major global technology center.
With the right policies and the right investment to secure Australia’s place as one of the world’s most attractive place to live, while keeping an eye on rising property prices, the best and brightest tech talent will continue migrate in their droves and build their lives creating economic potential for all Australians.