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Over the past year, the technology industry in Australia has seen growth that has outpaced the expectations of citizens and analysts alike, fed by startups tapping into the nation’s underutilized labour force and reskilling them via the wide availability of online courses in the marketplace. The burgeoning sector is reshaping an economy long dominated by old-line industries like mining and manufacturing. For a while, it seemed that the sky was the limit, but now a slew of legal and regulatory changes imposed by Parliament threatens to undercut much of the progress made in recent years. Here’s what’s happening to Australia’s tech sector, and what the results may be.

New Encryption Regulations

In December, Australia’s Parliament passed a bill that would compel technology companies to create a backdoor into their encrypted communication services. In the run-up to the bill’s passage, nearly every major global technology firm came out in opposition to the new law, arguing that it was unnecessarily vague and broad. The fear was that it would create fatal flaws in encryption that malicious actors would then exploit. Recently, tech industry group StartupAUS asked the government to reconsider the law, in a submission to Parliament backed by big-name players Atlassian, Canva, Blackbird Ventures, and others. They insist that the law is loaded with the potential for harm to the local industry, and could create unintended consequences beyond what lawmakers intended.

Tax Incentive Crackdowns

The encryption bill isn’t the only recent government-dealt blow to the tech sector. Around the same time, the government began a crackdown on technology businesses that take advantage of a tax scheme meant to fuel research and development. Some of Australia’s biggest tech firms have been issued demands for repayment of previously claimed tax breaks, amounting to millions of dollars in clawbacks and fines. Already, the move has caused business groups to warn that it could prompt a mass exodus of tech R&D operations from the country, harming future growth.

The End of the Innovation Ministry

In another sign of waning support for tech, the government also eliminated the minister of innovation from the cabinet. That robs the tech industry of high-level advocacy in the government, which some fear will allow for even more harmful changes to occur. So far, industry leaders have decried the move, and analysts see it as yet another blow to the nation’s short-lived and poorly-received innovation agenda of 2015.

What’s Next

Judging by the steady drumbeat of bad news for Australia’s tech sector, it seems as though much of the optimism generated over the past few years has dissipated. It’s still too soon to tell how badly the government’s recent moves will affect the sector as a whole, but the outlook isn’t exactly great. That isn’t good news at a time that the broader Australian economy seems to be slowing, and will need growth engines like the technology industry to keep it afloat. Unfortunately, for Aussies who depend on the new innovation economy, only time will tell.

Following a rash of doubt cast over Huawei’s intentions as a potential global supplier of 5G technology, Australia is in the first steps of pushing out its own 5G network in an attempt to bring the country up to speed both literally and figuratively. It’s almost certain to lead to a push for an increase in productivity and hiring in the IT workforce and those ramifications may push further than the world of telecommunications. 

Huawei’s Corporate Suspicions

Australia’s push for its own 5G network is just one part of a larger overarching tale of global suspicion thrown at Huawei, a Chinese corporation overseeing the deployment of 5G in China with offers to send their technology abroad for testing and future infrastructure integration. Yet many doubt the intents of this deployment, claiming the Chinese government will use Huawei’s integration to spy on other countries, leading to Australia to outright ban Huawei from their 5G network. New Zealand is currently arguing the merits of banning Huawei from the network as well. 

Huawei has disputed these claims of spying on behalf of the government, but the United States is joining into the push against foreign 5G networks over fear of potential security vulnerabilities. Prying deeper into the forces behind these vulnerabilities is a rabbit hole outside of the scope of its technological impact on Australia, but this sort of foreign distrust will lead to greater demands put on Australia’s workforce regardless of how long the ban remains in place. 

It’s already well known that Australia isn’t producing enough IT specialists to meet demand, a common problem through the tech sector in nearly every country. The tech industry is projected to require as many as 100 thousand graduates within five years, yet 2017 only produced 15,530 graduates and postgraduates. Considering the scope and manpower required for implementing and maintaining a new mobile network alone, those numbers could rise even further. 

The Mobile Network Arms Race

Chasing after mobile broadband speeds are a well-documented development that has come to a head over the past decade with domestic policy heavily shaping its progress. Progress may have been slowed by corporations being excluded from these developments yet finding a middle ground that appeases tech giants and politicians alike is a battle that will likely continue for decades to come. 

The Australian government has yet to respond to rising needs in the IT sector through grants or public initiatives, leading the field to face a potential stagnation in talent. Having government backing in financial incentives or even simple awareness can shift how citizens choose to shape their careers, leading to booms and busts accordingly. It’s especially strange to see such a push for a new technology without support to back up these requests for an Australian-oriented network. 

In the meantime, Telstra has pushed out their first live 5G connection in an effort to both test the requirements for a full network and demonstrate its capabilities to those interested in the technology. It’s a significant change over 4G, with China being well ahead in the race and showing no signs of slowing down. Networks of this type are poised to drastically change how wireless connections will be used and developed through the coming years, promising a near quantum leap in the scale of the Internet of Things and globally interconnected devices. 

Mobile speeds are reaching a point where cell phones are one of the least intriguing uses of increased transfer rates, making the shift to 5G a business-oriented move that could heavily shape cultural developments as well. Its lack of backing by public figures is only made that much more baffling by the slow response from those with the means to push it into a state ready for public adoption. We’ll reach the 5G revolution sooner or later, but without the education necessary to implement and maintain the network, it’s looking like it’ll be later than it should.