457s: Deep tech’s uncertain times

James Riley
Editorial Director

Petra Andren is the chief executive of the nation’s oldest and most successful tech incubator, Cicada Innovations at the Australian Technology Park in Sydney.

It is home to more than 70 companies and 400 people in startups and scale-ups in sectors ranging from MedTech and pharmaceuticals to AgriTech and drones.

The Turnbull Government’s scrapping of the 457 visa scheme has cast a pall of uncertainty over the tenants at Cicada. Roughly a third of the startups have people on 457s, while about 70 per cent of the companies that have reached scaleup stage are on 457s.

And while it is yet unclear what impact the new visa regime will have on the deep tech startups and scale-ups within the incubator, the uncertainty itself is damaging.

Ms Andren, who has been in Australia 11 years and is a former 457 visa holder, says the people hired from offshore and into the deep-tech startups at Cicada (formerly ATP Innovations) are simply not taking jobs from Australians.

“These are highly, highly skilled people. They are engineers and chemists and mathematicians. They are people we are not finding in Australia,” she said. “We know that universities are not churning out large numbers of people in these areas, even if there is a lot of activity going in the space for our unis to play catchup.”

She says the uncertainty that has swept through the Cicada facility in the aftermath of the announcement seems unnecessary.

There is too little detail about which occupations will qualify for the new classification of Temporary Skills Shortage (TSS) visa to know what impact the changes will have.

But surely the government could have made simple the carve-outs for the kind of deep tech companies that are reliant on the global marketplace from skills. Surely this would be considered a non-controversial caveat, a no-brainer for a government that has hung its hat on its National Innovation and Science Agenda.

“In order for us to be able to keep these businesses here, and indeed to keep the capital that is invested in these businesses here – because if you don’t have the team, you don’t get the capital – then we need to ensure that these skills are available,” Ms Andren said.

“The worst part about this is that we really don’t know what this scheme is going to look. And that uncertainty is not going to help my community.”

This has been the common theme of reaction from the tech and startup community over the past 24 hours. And the VC community, wondering out-loud if they’ve placed the right bets, but in the wrong country.

There are already mutterings about companies considering a move of all or part of their operations offshore.

In the higher education space, senior leaders are concerned about the impact of the changes on attracting top post-doctoral teachers into the system in Australia,

University of Sydney quantum physicist Michael Biercuk took to Twitter to warn of the adverse impact on Australia’s ability to attract world class post-doctoral research talent.

Dr Biercuk, who arrived in Australia on a 457 and is now driving a major quantum computing research effort at Sydney Uni, says more than 2,600 university lecturers had arrived on 457s since 2014.

These were mainly post-doctoral researchers who are a critical part of the inflow of ideas and skills into the Australia ecosystem.

An impact at that sharp end of science is surely an unintended consequence of this policy change, he says. Or at the very least, the uncertainty that has been created is the result of a poorly explained announcement.

As much as government has tried to get out in front of this, to allay the concerns of the science and innovation sectors, the fact that the 457 scheme was scrapped without warning and without special-needs consultation has many concerned.

Labor’s Digital Economy spokesman Ed Husic says the Prime Minister has taken the support of the tech community for granted, and that support will now be tested.

“When Malcolm Turnbull became PM a lot of senior leaders in the tech and startup sector flocked to him thinking the PM was ‘one of theirs’,” Mr Husic said.

“The PM has shown with this hasty announcement that it’s ‘Malcolm first’. He has thrown the startup community under a bus to save himself, regardless of what impact this decision has on a skill-starved sector.

“In the absence of a fair dinkum investment by the Turnbull Government in building local tech skills – which is unlikely since the Coalition has cut $2.5bn in skills funding – it’s now left to the sector to do what they normally do when confronted with a problem: hack a solution.”

“Find a way to attract and develop local skills.”

Mr Husic said he expects the industry will very quickly let its feeling be known to government.

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