Nitro founder Sam Chandler is weighing growth options since their latest funding round
A couple of years on from the exciting "innovation agenda" announcements, it feels like the Federal Government of Australia today knows farming and mining better than they do technology.
That's why April's skilled visa reforms incited widespread backlash from business leaders across the country, with my fellow technology entrepreneurs among the most vehement denouncers.
I remain hopeful the government will provide sensible revisions to the approved occupation list for 457 workers in its July 1 update, so Australia's burgeoning technology industry isn't further handicapped in the global war for talent. But in many respects the damage to our recruitment image is done.
The 457 changes have already made Nitro think twice about its growth options as we hire aggressively following our latest funding round. In an industry where access to top technically-skilled people can make or break a business, I question whether the government's positive steps towards building a vibrant local technology sector in recent years have stumbled, and resulted in a horrendous own goal for Australia's innovation policy. I am not talking about low-skilled IT jobs, by the way, where concerns have been raised that some employers used the 457 system to recruit foreign workers at below-market rates. Efforts to prevent that type of abuse are a good thing. But we must not throw the proverbial baby out with the bath water.
The talent that we would hire at Nitro, like at other startups, is high-skilled, world-class talent, that is mostly extremely expensive, and can work anywhere they want. It is not cheaper for us to recruit that talent from overseas. The suggestions by Malcolm Turnbull and others that companies would somehow prefer to hire overseas talent are puerile at best.
In every city Nitro has an office, we would always prefer to recruit locally, because it is demonstrably more cost effective. There are no relocation costs or delays. There are no visa costs or delays. Executives are not pulling children out of school. And so on. Locally is where we and every employer start the search for high-skilled talent. It is common sense.
According to figures taken from the Department of Immigration, 457 visas have been granted to more than 9000 software and applications programmers since 2014. The Australian Computer Society's Digital Pulse 2017 report predicted that Australia will require an additional 81,000 ICT workers by 2022, but the rate of domestic STEM graduates simply can't keep pace.
It appears that many roles broadly classified as IT or technology, such as 'ICT support and test engineers', have been axed from the local skills list, although some workers are still eligible – albeit potentially faced with more significant constraints and costs.
Additionally, the paths to permanent residency have generally been reduced or complicated. Highly-skilled workers who can live and work anywhere in the world will soon doubt the appeal of Australia over other options. While we're discouraging world-class entrepreneurs from choosing Australia to grow their technology companies, New Zealand has launched a Global Impact Work Visa aimed specifically at recruiting and supporting entrepreneurs. The contrast is stark.
The biggest issue is uncertainty. While policy remains unclear and government support for the technology industry is perceived to be weakening, startups large and small will simply shift their talent acquisition focus to other parts of the world.
Take Nitro. We have offices in the US, Europe and Australia, meaning we can choose where we hire top talent. Given the political situations in the US and Australia today, we are likely to focus more of our talent growth in our Dublin, Ireland office, where the immigration system is stable and the government is pro-technology.
Thanks to decades of smart tax policy by the Irish government, and a deliberate focus on foreign direct investment and skilled immigration, both aimed at the technology industry, Dublin is fast becoming the thriving tech ecosystem of any innovator's dreams. Yes, Google, Facebook, LinkedIn and many others may have set up there for tax reasons.
But their presence, and all those who came before them – Intel, Apple, Microsoft, to name just a few – has created one of the world's greatest technology talent pools. Start-ups like Nitro – and Dropbox, and Etsy, and dozens of others – are flocking in close pursuit as we look to recruit the world's best from the world's biggest.
How many other companies are making these same decisions? How many tens of thousands of technology jobs will be found in Ireland and other countries – and not in Australia – a couple of decades from now?
The Australian government, if it cares about jobs for Australians, now and especially in the future, needs to do better. The Australian technology landscape has come a long way since Nitro was founded in Melbourne in 2005, and there is a lot we should be proud of. The past 12 months have seen an influx of $900 million in venture capital, a far cry from the dismal domestic funding landscape of Nitro's early years. The recent budget also shows a commitment to Australian fintechs, open data and equity crowd-funding laws– all of which strengthen the entire tech ecosystem.
But talent is the cornerstone of success in tech. Take the US$8 billion success story that is Atlassian as an example – a quarter of their Australian team is apparently on 457 visas. If we're a nation that's truly dedicated to innovation, we need to have clear, logical plans for attracting global technology talent, and a political and policy environment that creates certainty so companies can invest with confidence. While that doesn't exist, too many technology jobs – that could have been Australian jobs – will go elsewhere. And that's every Australian's loss.
Article by Sam Chandler, published at Financial Review, on June 27, 2017.
Sam Chandler is founder and CEO of Nitro, a maker of document creation software.