(QESP Editor’s Note: The following is an extract from a speech by Matt Barrie, Chief Executive, Freelancer.com at the 14 April 2016 Knowledge Nation summit.  The full transcript is available athttps://www.linkedin.com/pulse/speech-knowledge-nation-talent-matt-barrie)

 [I have been asked many times for the transcript of the speech I gave today atKnowledge Nation, a summit which aims to drive the implementation of the Australian Government’s National Innovation and Science Agenda so I am publishing here].

There is no other industry that can create such immense wealth and long term benefit to the world, with such capital efficiency as the technology industry. Today, the largest public company in the world, Apple, is a technology company. Apple’s market capitalisation is bigger than the entire US retail market sector. Its revenue of over $234 billion generates over US$2 million dollars per employee per year. And that’s just the company directly. Think of all the business, jobs, wealth creation and benefits to society that have come indirectly from using the company’s computers, mobile devices, software, services and products

The largest three companies by market capitalisation globally, as of March 31, 2016, were Apple, Alphabet and Microsoft. Facebook is sixth. Amazon is ninth. Together, these five companies generate over half a trillion dollars in revenue per annum. That’s equivalent to a third of Australia’s GDP or 70% of our gross national income. And many of these companies are still growing revenue at rates of 30% or more per annum.

These are exactly the sorts of companies that we need to be building.

With our population of 23 million and labour force of 12 million, there’s no other industry that can deliver long term productivity and wealth multipliers like technology. Today Australia’s economy is in the stone age. Literally.
By comparison, Australia’s top 10 companies are a mine, a bank, a bank, a mine, a bank, a bank, a monopoly telephone company, a bank, a supermarket and a superannuation company.

Our GDP of $1.6 trillion is 69% services. Our “economic miracle” of GDP growth comes from digging rocks out of the ground (mining, which used to be 19%, is now 7%), shipping the byproducts of dead fossils, and stuff we grow. Thanks to the global collapse in commodities prices together this is only 12% of GDP.
When global economic growth falters, the wealth from these industries will be destroyed as fast as it was created; it’s the nature of the commodities cycle.

There is an absolutely incredible opportunity before us right now. I can’t think of one industry that isn’t rapidly turning into a software business. We’re in the grips of a technology gold rush. I think by this stage quite a number of you are well aware of this gold rush.

And you’re also well aware that Australia is completely missing out.

Most worrying to me, the number of students studying IT in Australia has fallen by between 40 and 60% in the last decade depending on whose numbers you look at. Likewise enrollments in other hard sciences and STEM subjects such as maths, physics and chemistry.

This is all while we have had a 40% increase in new undergraduate students as a whole.

Women once made up 25 per cent of students commencing a technology degree, they are now closer to 10 per cent.

All this in the middle of a historic boom in technology. This situation is an absolute crisis. If there is one thing, and one thing only that you do to fix this industry, it’s get more people into it. To me, the most important thing Australia absolutely has to do is build a world class technology curriculum in our K-12 system. Instead we lump in a couple of horrendous subjects about technology in with woodwork and home economics. Yes there is a little bit of change coming, but it’s mostly lip service. Meanwhile, in Estonia, 100% of publicly educated students will learn how to code starting at age 7 or 8 in first grade, and continue all the way to age 16 in their final year of school.

At my company, Freelancer.com, we’ll hire as many good software developers as we can get. We’re lucky to get one good applicant per day. On the contrary, when I put up a job for an Office Manager, I got 350 applicants in 2 days.

But unfortunately the curriculum in high school pays lip service to technology and while kids would love to design mobile apps, build self driving cars or design the next Facebook, they come out of high school not knowing that you can actually do this as a career.

Now I won’t go into yet another boring speech regurgitating about what we need to do to fix the school system, neither will I talk about all the things we need to do to our universities, because so many other people have talked through this subject ad nauseum.

I’ve come to the conclusion that it’s actually all too hard to fix – and I came to this conclusion a while ago as I was writing some suggestions for the incoming Prime Minister on technology policy. I had a good think about why we are fundamentally held back in Australia from structural change to our economy to drive innovation.

I kept coming back to one thing.

The problems we face in terraforming Australia to be innovative are systemic. They are a result of regulatory duplication, confusion and duplication of responsibilities or the mindless populism of absurd policies of the State Governments. Knowledge Nation asked me to be put some controversial ideas out there. Well I think we should abolish State Governments.

How do you fix K-12 education in this country? It’s the remit of the bureaucracy of the State Governments. Trying to get them to all agree to modernise the curriculum is an exercise in futility. Or sadomasochism. I genuinely believe the Federal Government wants to fix K-12 education and understands the issues, it can’t.

(QESP Editor’s Note: The original transcript discusses how  State government methods of generating revenue discourage young, talented people from remaining in Australia. Also discussed is the migration of startup mentors Mick Liubinskas  and Hamish Hawthorne, – which also features in an Apr 11, 2016 blog by Chief Disrupter Anne-Marie Elias, see http://qesp.org/)

What about trying to attract more senior people to Sydney?

I’ll tell you what my experience was like trying to attract senior technology talent from Silicon Valley.

I called the top recruiter for engineering in Silicon Valley not so long ago for a Vice President role. We are talking a top role, very highly paid. The recruiter that placed the role would earn a hefty six-figure commission. This recruiter had placed VPs at Twitter, Uber, Pinterest.

The call with their principal lasted less than a minute; “Look, as much as I would like to help you, the answer is no. We just turned down [another billion dollar Australian technology company] for a similar role. We tried placing a split role, half time in Australia and half time in the US. Nobody wanted that. We’ve tried in the past looking, nobody from Silicon Valley wants to come to Australia for any role. We used to think maybe someone would move for a lifestyle thing, but they don’t want to do that anymore.

“It’s not just that they are being paid well, it’s that it’s a backwater and they consider it as two moves – they have to move once to get over there but more importantly when they finish they have to move back and it’s hard from them to break back in being out of the action.

“I’m really sorry but we won’t even look at taking a placement for Australia.”

This is what it is like trying to attract, incentivise and retain talent in a technology company in Australia.