Is the Aussie Brain Drain to Silicon Valley a good thing?
Great Article by George Nott (CIO)
Barely a month goes by without news of yet another Aussie who has made it big in Silicon Valley: Fintech start-up Credible, Bitcoin wallet Snapcard, indoor locationing innovator Navisens to name but a few.
The phenomenon of Australia’s best minds leaving these shores for the US – the so-called ‘brain drain’ – is a cause of serious concern among the local tech community. It’s “completely and utterly a disaster” according to fintech chief Jost Stollmann of Tyro Payments. It’s “an absolute crisis” said Freelancer.com CEO Matt Barrie in April.
“There is still… a massive talent drain issue that needs to be addressed,” says LinkedIn Australia’s MD Clifford Rosenberg. “Much of the world-class talent that we do create is migrating to other countries to seek better opportunities.”
At last count, 2,300 ICT workers left Australia for employment overseas. People with STEM degrees are also leaving Australia in significant numbers, according to LinkedIn figures.
Demand outweighs supply and the imbalance is growing every day. The gap is currently being filled by foreign workers, with around 22,000 arriving to work in ICT occupations in the 2014/15 financial year.
The government has acted to “get the skills that businesses need now” by setting aside $2 million in its Innovation Agenda to ‘refine visa settings’. But with more companies embarking on major digital transformations both here and overseas this may be a case of too little too late. And the rising living costs in tech hubs like Sydney put potential senior candidates off, says Atlassian’s Mike Cannon-Brookes.
“There is a lot of talk about the lack of tech talent in Australia, and quite rightly so,” says Suzanne Gerrard, director of IT recruitment agency Greythorn Australia. “As technology continues to infiltrate every business and sector, the need to have skilled staff to drive transformation projects as well as business as usual application of tech, continues to grow.”
But is the problem really as bad as some say? Has the ‘brain drain’ been overstated? Perhaps Aussies abandoning their homeland for Silicon Valley is a good thing for the country?
“I don’t see it as a huge issue. If anything, it should be encouraged,” says Australian Andrew Roberts. “An active expat community helps Australia and Australian companies.”
Andrew Roberts is CEO of Silicon Valley-based Ephox, who provide WYSIWYG editing and content creation SDKs. He moved from Brisbane to the US to be closer to the company’s biggest customers. With a competitor gaining market share he “felt we were missing out” by not being in the US, plus he adds: “like many young Australians, I wanted to live and work overseas for a while”.
Ephox’s success in Silicon Valley is positive for Australia, Roberts says: “My company has created dozens of high-paying tech jobs back in Australia as a result of me moving to Silicon Valley. We wouldn’t be as successful as we were if we hadn’t invested a lot of time and money into international markets.”
Roberts is one of around 20,000 Australian expats – collectively known as the ‘Aussie mafia’ – living and working in the southern San Francisco Bay area. Some have been there for years, others come and go.
“They are some of the smartest people you will meet,” says Roberts. “And Australians, in general, remain humble and easy to get along with even if they have had some success.”
The sentiment is echoed by Australian Ernest Semerda, founder of productivity app GSDfasterand cofounder and CTO of Medlert, a logistics and communication platform for hospitals and ambulance providers, based in Silicon Valley.
“Even though today, a product can be engineered and distributed using online channels from any location in the world, I don’t believe we should stop people moving overseas,” he says.
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Aussie Ernest Semerda, CTO and co-founder of Medlert
The Sydneysider had always dreamed of working in the Valley, “the mecca of technology” and made the move in 2009. “I believe that if you want to get serious in your industry you need to be where the action is: Silicon Valley for technology, LA for the movie industry, New York for fashion and so on,” he said.
If the hard work of building a business can be “expedited through an overseas startup community then we should encourage it,” he says. “When the founders get to the growth phase, then make it fruitful for them to come back to Oz to grow their business locally.”
Ripe for return?
When launching the Innovation Agenda in December, Prime Minister Malcolm Turnbull said: “We want to make sure we retain and gain the best human capital that we can.” There were a raft of measures aimed at creating an “innovation nation” that was an attractive place to do tech.
In April, Kelly O’Dwyer, then small business minister, was in New York speaking at a ‘Down Under New York’ event for Australians working in the city. “I don’t think we should be concerned that people go over to the United States and New York and get experiences and learn new things,” she said, “as long as we create the right environment for them to return and they are not compelled to go as an only option.”
But is Australia the ‘right environment’ for them?
If Australians that head for Silicon Valley end up returning, having grown their skills and experience, perhaps with capital and drive to set-up or expand businesses locally, it can only be a good thing for the nation.
With a shortage of capital investment, sky-high living costs, lack of STEM grads, an increasingly boring main city and pedestrian internet speeds – it’s a big if.
What do you think? take part in the conversation on LinkedIn: CIO Australia, Twitter: @CIO_Australia or Facebook: CIO Australia.