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Strategic recommendation 4

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ISA recommends that Government facilitate access to, and attraction of, innovation skills and capabilities.

Australian firms often need to support their innovation investments with skills and capabilities in innovation beyond those available in the Australian market

Australian firms need access to the appropriate skills, talents and capabilities to plan for and boost their innovation investment. Australia has, for several years, used a form of temporary skilled migrant visa program to provide Australian firms with access to labour with specialised skill sets deemed to be in short supply.

The reliance of firms on temporary skilled migrants is not unique to Australia. Other advanced economies have used various schemes to source skilled labour from overseas, notably the H1-B visa, a mainstay of the US higher education, software development and IT industries. The UK has used tiered work permit programs; Canadian employers can also temporarily sponsor foreign workers as part of the global talent stream.

Analysis by the Office of the Chief Economist shows skilled migration provides benefits for firm performance through increased sales turnover and employment performance, compared with those firms that did not leverage specific immigration programs.[61]

Many firms demand certain niche skills and capabilities that simply cannot be found in the domestic market as the industry or ability to gain the experience does not exist in Australia. Facilitating access to these types of skills and capabilities from the global marketplace can assist in not only filling a capability gap within firms, but transferring skills and knowledge to the domestic workforce. More needs to be done to facilitate access to, and attraction of, these innovative skills and capabilities to business and to help build industry ecosystems.

Lessons learnt from early-stage commercialisation venture capital funds, such as Israel’s YOZMA (Hebrew for ‘initiative’), highlight the benefits of importing venture capital (VC) fund management expertise. Israel has managed to leverage overseas fund manager expertise to train and create a thriving domestic VC ecosystem after several failed policy attempts.

Examples of government-led initiatives

Example M. Access to international talent

ISA recommends that government continue to reduce barriers for businesses seeking to attract and deploy skills and talent not currently available in Australia. These skills could be easily accessible from international markets and help build domestic capabilities.

In addition to focusing on skilling our domestic workforce to be future-ready, businesses need to attract skills from overseas to fill shortages where those skills do not exist domestically. Technological advances such as big data, artificial intelligence, and the Internet of Things can enable companies to compete in new and very different ways.

The government has made a good start in this area with the Global Talent Scheme, which was made permanent in 2019 after a pilot phase. For example, Q-CTRL, a company at the forefront of quantum computing in Australia, has leveraged the scheme to secure access to talent in quantum science.[62]

However, continued vigilance will be necessary to ensure the design of the scheme appropriately balances the need for flexibility in responding to technology developments, with the robust requirements of all visa categories.

This challenge to maintain the appropriate balance is only likely to grow. Australia’s Digital Pulse 2019 [63] found that the demand for technology workers will grow in Australia by 100,000 workers between 2018 and 2024.[64] This demand is likely to come from all sectors. Although the pipeline of technology workers is gradually improving, the report highlights the need for skilled workers from overseas as an important source of technology skills for Australian businesses in the short term. Attracting these business-critical skills to Australia is an important step to developing an effective industry ecosystem.

Footnotes

  1. Rafi, B., & Talgaswatta, T. (2019). The characteristics and performance of 457 migrant visa sponsoring business. Office of the Chief Economist.
  2. Media releases global talent program
  3. Deloitte Access Economics. (2019). (external download) ACS Australia’s digital pulse 2019 – blooming today but how can we sustain digital workforce growth?. Website: ACS Australia’s digital pulse 2019 overview
  4. Over the last seven years, technology workers have had an average of 2.5% growth, which is higher than the 1.7% average for the rest of the labour market.