The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
How Should Australia Grow its Tech Sector? Charting a Digital Future
Tech Council Breakfast Event,
Parliament House
11 March 2026
Good morning everyone, and thanks to the Tech Council of Australia and Capital Brief for bringing together such an interesting group of policymakers, technologists and thinkers.
The tired old stereotype of innovation is a lone genius in a garret or garage. It’s a tidy tale that makes for engaging biographies and simple stories.
It is also misleading.
The reality is that innovation operates more like a team sport. A founder depends on engineers, designers, investors and early customers. Researchers exchange ideas with industry partners. Infrastructure providers support the digital backbone. Regulators set the boundaries of fair play.
Anyone who watched last weekend’s Melbourne Grand Prix race saw this in action. At the end of the race, the drivers stand on the podium. But each of them know that they’re only there because of the work of their teams.
In Formula One, around twenty mechanics change four tyres in about two seconds. If any one of them hesitates for half a second, the car loses position on the track. It’s the purest demonstration I know that performance comes from teamwork.
Successful technology sectors resemble strong sporting teams. They combine talent, coaching, facilities and well-designed rules.
So this morning I want to explore Australia’s digital future through that sporting lens. What does it take to field a winning innovation team?
The players
Every team begins with talent.
In the technology sector, the players are entrepreneurs, software engineers, product designers and data scientists – the people who convert ideas into firms and products.
Australia has produced several standout performers. Atlassian and Canva show that companies founded here can scale globally and compete with the best. Their success rests on curiosity, engineering skill, design capability, and a willingness to tackle large markets.
The player pool has grown quickly. Employment in occupations linked to ICT, software and database management has increased by more than 40 per cent over the past decade.
Demand for AI-related skills has expanded rapidly as well. References to these capabilities in job advertisements have more than tripled in ten years.
That pattern signals a structural shift. Technology skills increasingly appear across many occupations. Marketing teams use generative tools to analyse campaigns. Engineers rely on machine learning to optimise systems. Analysts build models that draw on vast datasets.
In other words, the tech sector no longer consists of a few people in hoodies writing code in dark rooms. It now includes designers, economists, lawyers, clinicians and public servants. The hoodie remains optional.
For policymakers, the implication is clear. Skills policy sits at the centre of technology policy. The digital economy rewards people who understand both code and context – engineers who grasp markets, product managers who grasp technology.
When the players improve, the whole team improves.
The coaches
Players develop faster with strong coaching.
In innovation ecosystems, the coaches often sit inside universities and research institutions. They train students and supply the intellectual momentum that feeds into new ventures.
Australia’s universities contribute heavily to this system. They produce research that informs industries ranging from software to biotechnology. They train graduates who later build companies, join start-ups or develop technologies within established firms.
Government provides additional support through research funding. Agencies such as the Australian Research Council and the Medical Research Future Fund channel substantial investment into research linked to emerging technologies, enabling a healthy trade in ideas across disciplines and countries.
The Next Generation Graduates Program supports advanced training in areas such as artificial intelligence and digital systems. These programs connect postgraduate researchers with industry projects so that ideas move quickly from theory to application.
Coaching matters because innovation rarely arises from a single insight. Progress emerges from tinkering: cumulative improvements and careful experimentation.
Anyone who has watched a talented sporting coach at work recognises the pattern: a small tweak to technique, a slightly better strategy, new nutrition, a few extra repetitions in training. Eventually the scoreboard moves.
In software teams, the equivalent involves a shared repo, a pull request, and a slightly heated argument about whether the elegant solution is worth the extra complexity.
The training facilities
Athletes train in stadiums, gyms and tracks.
Technology companies train in a different type of facility: digital infrastructure.
The modern digital economy relies on fast networks, cloud platforms and increasingly data centres – large-scale computing facilities that process and store enormous volumes of information.
As the saying goes, there’s no such thing as ‘the cloud’ – there’s just ‘someone else’s computer’.
Australia’s data centre sector contributes around $7.5 billion annually in value added.
Behind that figure sits a much larger digital ecosystem. Digital activity contributes roughly $160 billion each year – about 6.3 per cent of the Australian economy.
The infrastructure supporting that activity continues to expand. Capital expenditure on data centres and related equipment has reached billions of dollars annually, with additional projects in the pipeline.
These facilities perform the heavy lifting underpinning modern software services. Artificial intelligence models require enormous computing power to train. Cloud platforms host the applications used by businesses and households each day. Data pipelines move information between systems in milliseconds.
In sporting terms, data centres resemble high-performance training complexes. They are full of specialised equipment, they consume large amounts of energy, and outsiders occasionally look at them and wonder what exactly is going on inside.
There is also an energy dimension. Data centres draw significant electricity, and their demand will grow as digital workloads increase. That dynamic links technology policy to energy infrastructure and clean power.
In other words, the stadium lights matter almost as much as the players on the field.
The rules of the game
Every competition relies on rules that shape how teams interact.
In economic terms, those rules are competition policy and regulatory frameworks.
Technology markets often display strong network effects. A platform that attracts more users gathers more data, improves its services and attracts more users again. Economists describe this as increasing returns to scale.
Such dynamics create large rewards for successful firms. They also raise barriers for newcomers.
Well-designed competition policy ensures the contest remains open. New entrants can introduce better products. Consumers benefit from choice and innovation.
Australia’s competition framework has long supported dynamic markets. The challenge in digital sectors lies in applying these principles to new forms of market power: control over data, talent, platform access and digital ecosystems.
Think of it as refereeing in a fast-moving sport. The rules must remain clear and the field open enough that a talented newcomer still has a chance to score.
The team’s fitness and strategy
Even strong teams require strategy.
For the digital economy, the strategic question of the coming decade centres on how organisations deploy artificial intelligence and advanced computing tools.
Technologists describe many of these systems as general-purpose technologies. They influence numerous industries rather than a single sector.
Economic history provides useful lessons. When electricity spread through factories in the early twentieth century, productivity gains appeared slowly. Firms first replaced steam engines with electric motors. Bigger improvements arrived later when production lines were redesigned around electric power.
A similar pattern may be happening with AI.
Research suggests AI tools already improve productivity in tasks such as software development, management consulting, marketing and customer service. These gains arise when workers integrate AI systems into their workflows, instead of being replaced by it.
Complementary investments play a crucial role. Firms invest in data architecture, cloud infrastructure and employee training. New business models emerge. Organisational structures evolve.
The Productivity Commission estimates AI could raise Australia’s multifactor productivity by around 2.3 per cent over the next decade, equivalent to an increase of about $116 billion in GDP.
These gains depend on adoption across the economy, particularly among small and medium-sized enterprises. Many firms begin with narrow applications – automated document analysis, predictive maintenance or demand forecasting – and expand from there.
If this were a sporting analogy, AI resembles a new training technology. Early adopters gain a performance edge. Others soon follow. Eventually the teams still using last decade’s equipment begin to wonder why everyone else suddenly seems faster.
Support from the league
Teams also rely on the institutions that organise the sport.
In Australia’s technology ecosystem, several organisations perform that role. One of the most prominent is the Tech Council of Australia.
Industry bodies such as the Tech Council bring firms together to share knowledge and advocate policies that strengthen the sector. They help coordinate efforts across companies that might otherwise operate in isolation.
In effect, they help the league run smoothly.
Government policy complements these efforts.
The National Reconstruction Fund allocates investment toward critical technologies.
The AI Adopt program helps small and medium-sized firms integrate artificial intelligence into their operations.
The National AI Centre serves as a hub helping industry to adopt AI responsibly.
Together, these initiatives aim to accelerate technology diffusion across the economy.
Economists often emphasise a distinction between innovation and diffusion. Innovation produces new ideas. Diffusion spreads them widely. The productivity payoff arrives when the second process succeeds.
Industry collaboration speeds that diffusion. When firms share knowledge and standards, the entire league becomes stronger.
And while tech companies enjoy fierce competition on the field, they usually agree on one thing off it: debugging the same problem alone is a terrible use of time.
A strong team
Innovation succeeds when the whole team works together.
Talented players develop new products and companies.
Universities and research institutions coach the next generation.
Digital infrastructure provides the facilities where technologies operate.
Competition policy sets rules that keep markets dynamic.
Businesses integrate new tools such as AI into their strategies.
Australia possesses many of these elements already. The challenge lies in strengthening the connections between them so that ideas travel faster from research to start-ups, from start-ups to scale-ups, from scale-ups to global markets.
If we succeed, the outcome will extend far beyond the technology sector. Productivity growth strengthens living standards. Digital tools improve services in health, finance and education. New firms generate jobs and export opportunities.
In sporting terms, Australia has the players, the coaching and the facilities to compete at the highest level.
Now comes the task of running the playbook well.
I am delighted that today’s event brings together people who shape that playbook.
And I am particularly pleased that we will hear shortly from Professor Christopher Yoo, whose work on digital regulation and technology governance has informed debates across the world.
Professor Yoo, we look forward to your insights.
ENDS