Dr John H Howard, 19 December 2024
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The assessment of national technological capabilities demands a perspective that extends beyond technical specifications to encompass innovation systems, economic structures, and policy frameworks.
From this standpoint, Australia's technology landscape reveals many notable achievements and some significant strategic vulnerabilities.
Australia's Platform Technology Challenge: Beyond Digital Applications
The relationship between platform and application technologies fundamentally shapes national innovation systems and economic resilience.
Australia has demonstrated notable global successes in application-layer software and digital services. This focus on applications and consumer-facing solutions is deeply embedded in Australia's startup ecosystem, where founders and investors predominantly gravitate toward building the next user-friendly app or digital service—a pattern reinforced by our successful tech unicorns and celebrated in startup accelerators, pitch competitions, and innovation hubs across the country.
However, the nation faces a strategic challenge in developing foundational platform technologies—the underlying digital infrastructure, such as cloud computing systems, operating systems, and semiconductor technologies that enable broader technological innovation.
This distinction matters because platform technologies typically create deeper economic moats and support entire ecosystems of innovation built upon their foundations. Understanding this gap requires examining not just individual company success stories but the broader structures that enable sustained technological development at a national level.
This success in consumer-facing solutions masks a deeper systemic weakness in Australia's national innovation architecture. The country remains heavily dependent on foreign-developed platforms for its digital backbone. This dependency extends across critical sectors, from cloud computing and artificial intelligence to quantum technologies and advanced manufacturing systems.
While recent ecosystem data from Startup Muster shows growing interest in deep technology development among Australian startups, there remains a significant gap between application-focused innovation and the development of fundamental platform technologies.
Understanding and addressing Australia's platform technology gap requires examining development through an innovation systems framework—one that reveals the complex interplay between research capabilities, investment patterns, institutional frameworks, and policy settings.
This systemic perspective illuminates how these elements collectively shape our national technological capabilities and points toward the strategic interventions needed to strengthen our platform technology foundations.
Understanding the Technology Divide
Platform technologies serve as foundational infrastructure that enables innovation in entire ecosystems. Consider Amazon Web Services (AWS): this platform provides the computing architecture that powers countless applications, from streaming services to digital banking systems.
Similarly, OpenAI's GPT platform has spawned thousands of AI-powered applications across industries. These platforms represent more than mere technological tools; they constitute the fundamental architecture upon which modern digital economies are built.
The value of platform technologies lies in their ability to create network effects and enable innovation at scale. When companies like Microsoft, Google, Apple, or Intel develop new platform capabilities, they create opportunities for thousands of developers and businesses to build novel applications.
This multiplicative effect distinguishes platforms from applications and underlies their strategic importance in the global technology landscape. This distinction extends beyond technical architecture to encompass fundamental differences in development requirements, risk profiles, and market dynamics.
Application development typically requires lower initial capital investment, offers clearer paths to monetisation, and can leverage existing technological infrastructure. These characteristics have made application development particularly attractive in the Australian context, where venture capital tends to favour shorter development cycles and clearer return horizons.
Building Platform Capability: From Past Success to Future Potential
While selective, Australia's history in platform technology development demonstrates our capacity to create foundational innovations that enable broader technological advancement.
Moving from these foundations to sustained platform leadership requires a comprehensive implementation strategy addressing three critical dimensions: investment in long-term capital formation, specialised technical talent development, and enabling infrastructure establishment.
Success in each dimension demands new approaches and institutional arrangements that specifically target the unique challenges of platform technology development.
Implementation and delivery of capability will require a multi-pronged approach.
Investment
Achieving leadership in platform technologies requires fundamental changes to Australia's investment landscape.
This investment framework must recognise the unique characteristics of platform technology development. Unlike application-layer investments, which often show clear revenue potential within two to three years, platform technologies typically require sustained investment through extended development and adoption cycles.
Establishing a dedicated and sizeable Platform Technology Investment Fund to provide patient capital over seven to ten-year horizons would address these characteristics. The fund should operate alongside directed R&D tax incentives that specifically reward investment in strategic platform technologies.
Superannuation funds could play a crucial role, aligning their long-term investment horizons well with platform technology development timeframes. Additionally, establishing specialised investment vehicles that combine public risk underwriting with private sector expertise could help bridge the gap between research breakthroughs and commercial platform deployment.
The success of such reforms depends on close coordination between the public and private sectors. Government investment should act as a catalyst, de-risking early-stage platform development while encouraging private sector participation through matching funds and co-investment opportunities.
Building Platform Technology Talent
Platform technology development requires a fundamentally different talent profile than application development.
While Australia has successfully cultivated expertise in building consumer-facing applications, developing platform technologies demands deeper technical capabilities in distributed systems architecture, platform scalability engineering, API design, network protocol development, and complex systems integration. Building this specialised talent pool requires a coordinated approach across education, industry partnerships, and immigration policy.
Higher education institutions should create advanced programs encompassing the full spectrum of platform engineering—from fundamental architecture and security to systems programming and protocol development. They should also cover platform business dynamics and network effects.
TAFE and other advanced technical institutions should create targeted programs focusing on platform operations and technical integration. These institutions are uniquely positioned to deliver accelerated learning through innovative approaches such as specialised micro-credentials, technical apprenticeships, and intensive industry-aligned training programs.
Immigration policy reform presents an immediate opportunity to accelerate the development of our platform capability. A dedicated Platform Technology Visa category could attract individuals with demonstrated experience in platform architecture at scale, core technology development, and complex systems integration. This targeted approach to immigration would complement domestic talent development while providing immediate access to critical platform development expertise.
Infrastructure Support
Physical and digital infrastructure forms the foundation for platform technology development. Establishing a national portfolio of connected research facilities for quantum computing, biotechnology, and advanced manufacturing would provide essential resources for platform innovation. These facilities should operate as collaborative spaces, enabling interaction between researchers, developers, and industry partners.
The National Reconstruction Fund is positioned to invest in foundational infrastructure across quantum computing, renewable energy, biotechnology, semiconductors, and space, fostering the conditions for platform ecosystems to emerge. The recent investment in Quantum Brilliance's diamond-based quantum accelerators has significant potential to serve as an enabling layer for scalable quantum platforms.
Measuring Progress, Performance and Impact
Evaluating Australia's progress in platform technology development requires metrics that capture immediate outputs and systemic transformation. They must span technical achievement, market adoption, and ecosystem development.
Quantitative indicators should track the following:
Development and international adoption of Australian platform technologies across priority sectors
Revenue and royalty streams from platform licensing,
Growth in platform-specific patents and intellectual property, particularly in quantum computing, energy systems, and advanced manufacturing
Reduced dependency ratios on foreign platforms in critical infrastructure, especially in cloud services, AI foundations, and data management systems
Investment flows into long-term platform development projects, including public and private capital.
Qualitative measures should assess ecosystem maturity through:
Emergence of platform-focused startups building on Australian-developed foundations
Growth in specialized technical talent across priority platform domains
Development of supporting research institutions and commercial partnerships
Success in attracting and retaining platform technology leaders
Evidence of network effects and innovation clusters around Australian platforms
These metrics should inform policy adjustment and investment priorities, ensuring Australia's platform technology strategy remains responsive to technological change and market opportunities.
Charting Australia's Technology Future
Developing Australia's platform technology capabilities requires more than just recognising the challenge—it demands a fundamental shift in approaching technological innovation.
Success will require long-term investment horizons extending beyond typical venture capital timeframes, strategic policy frameworks prioritising deep technical development, and a reimagining of technological leadership within our innovation ecosystem.
This shift must encompass our research institutions, investment community, and policy frameworks to create an environment where platform technologies can emerge and scale alongside our proven strengths in digital applications."
Success in this transition will require a coordinated effort across government, industry, and academia. Policymakers must provide the regulatory framework and initial funding to catalyse development. Industry leaders must commit to long-term investment in platform capabilities. Academic and training institutions must adapt to produce the specialised talent required for platform innovation.
The path ahead is challenging, but the opportunities far outweigh the costs of standing still. As global technology competition accelerates, countries that lead in platform technologies will drive the future of innovation and set the agenda for economic growth.
Australia has a unique opportunity to build on its strengths and take bold steps toward developing the platform capabilities critical for long-term technological sovereignty and economic prosperity. By acting decisively, Australia can secure its place as a leader in the technologies that will shape the future, ensuring resilience and competitiveness in an increasingly dynamic global landscape.
This is the last Acton Institute Innovation Insight for 2024. We wish all our supporters every enjoyment and happiness over the Christmas-New Year holiday season and look forward to reconnecting in early January.
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