Working in large US firms reduces ‘brain drain’ by enabling Australian tech graduates to fast-track their skills development onshore, according to an analysis of US tech companies’ economic contribution that noted productivity bumps when skilled workers train their peers.

That economic contribution – which includes $1.2 billion in annual productivity benefits each year from the 102,000 Australian workers employed at large US tech firms – is tied to the relatively high demand for experienced workers in Australia’s tech industry, the Microsoft-LinkedIn-Tech Council of Australia (TCA) co-authored report found.

“US tech firms play a significant role in bolstering our industry [and] equip their employees with sought-after skills that are in high demand in the talent marketplace.” said LinkedIn ANZ managing director Matt Tindale.

“Diffusion of skilled professionals contributes positively to our local economy by enabling Australian companies to stay competitive in the global market, drive innovation, and expand their operations.”

Analysis of LinkedIn data showed that the average Australian technology job requires four years’ experience, compared to 3.1 years for workers in other professions – and global scale-up US companies, TCA CEO Kate Pounder said, are a rewarding training ground in which around 18 per cent of Australian technology graduates are already getting that experience.

Ongoing close ties between the US and Australia “directly boost productivity, as well as [growing] jobs and skills in Australia,” Pounder said, noting that the alliance produces $5,000 of additional economic value per worker, per year and gives Australian workers “access to more job opportunities, and a better coaching and training experience.”

“When Australian firms can get access to one globally experienced workers, it has a multiplier effect for the Australian business because it helps them take on the world from home,” she said.

“It also means more Australians get access to global skills and experience to help develop them in their career without having to leave Australia.”

Rather than leaving Australian employers to seek globally relevant experience in overseas roles – an ongoing issue that has contributed to Australia’s chronic ‘brain drain’ in a time when technology workers are more important than ever – the analysis found that experienced tech workers produce 6.1 per cent more economic value for Australia than their inexperienced peers.

Transferring that experience to junior peers can boost the productivity of junior workers by 2.6 per cent on average, the analysis found, with around 4,000 experienced “US tech alumni” and providing additional benefits when they leave US tech firms and bring their skills to Australian companies, startups, or the public sector.

Whether through relationships with business customers, mentoring and supporting startups, or supporting not-for-profits as volunteers, the report found that this group of workers contributes $613 million to the economy.

Around 800 individuals leave US tech firms to start or scale new firms in Australia, creating 150 new startups per year, the report found.

Still room for improvement

Although Australia’s ICT sector has benefited from the transfer of globally relevant skills within US companies, overall it still has a long way to go: Australia’s tech sector contributes just 3.8 per cent of national GDP, the report notes – well behind that in comparable countries such as the US (10.2 per cent), UK (8.1 per cent), and Canada (6.8 per cent).

Increasing that figure remains a goal of industry development bodies, who are working hard to increase the profile of the ICT industry amidst efforts to boost the size of Australia’s ICT sector to 1.2 million employees.

“Boosting the number of tech jobs in our workforce is not a ‘nice to have’,” Minister for Industry and Science Ed Husic recently said after lauding figures that showed the sector grew by 8 per cent last year alone – despite mass layoffs.

Those jobs “are incredibly vital to building stronger, competitive Australian businesses in the long run,” Husic added. “Workers with tech skills are highly sought after for well-paying, secure jobs.”

Yet Australian workers are still far less likely to work for large US scaleups than workers in other countries: just 1 per cent of Australian tech sector workers have experience in a scale-up firm, for example, compared to 17 per cent of tech workers in Singapore.

Business Council of Australia CEO Jennifer Westacott said the report’s findings suggested that Australia needs to “get the settings right to encourage and enable overseas investment” that is critical to creating jobs, boosting productivity, and encouraging innovation.

With the right policy settings “Australia has a substantial opportunity to increase the economic contribution of the tech sector to catch up with its global peers,” Microsoft ANZ managing director Steven Worrall agreed.

“World-leading digital economies comprise a diverse mix of both international and local firms, and the continued growth of Australia’s tech sector requires co-operation, collaboration and diversity.”