Just how sovereign does our tech sector need to be?


James Riley
Editorial Director

Australian policymakers face a very particular challenge in relation to the artificial intelligence and its contribution to productivity, according to Vault Cloud chief executive Rupert Taylor-Price.

That is how to build a nuanced set of industry policy that both attracts the large-scale foreign investments and best-in-class overseas technology to Australia, while simultaneously developing a sovereign AI capability with building export-facing products.

And these policies must also cater to the national security requirements that are increasingly bound together with technology roll-out decisions.

Vault is a secure and sovereign cloud infrastructure provider certified in Australia to carry workloads classified to the Top Secret level. It is a sovereign Australian company that is also building operations in the United States and Britain.

Mr Taylor-Price has been a long-term advocate for procurement reform in Australia, and is probably the country’s clearest thinker on sovereignty issues related to the technology industry.

In this episode of the Commercial Disco, Mr Taylor-Price talks about policies aimed at attracting the world’s best tech companies to invest in Australia, and strategies to make sure an Australian industry is able to flourish.

He says the old arguments about whether Australia is a “maker or taker” of technology does not make sense. Australia must be both.

We are too small and not rich enough to produce most technology ourselves, he says, but that doesn’t mean we can afford to source all of our technology from offshore.

“We absolutely want the world’s best technology. We want to bring the best innovation that the world’s got [to Australia],” Mr Taylor-Price said,.

“And we want large direct foreign investment [by tech companies] into Australia. Australia benefits from that.

“But if we go too far and we become entirely dependent on [overseas technology], he said, introducing an intolerable level of risk to national security and to economic security.”

The ability to build a mixed economy where Australia is both producing technology where it makes sense, but also importing and using foreign technology where it makes sense is critical.

“If you end up with a nation that is a pure consumer [of tech] and doesn’t produce anything, all you’re really left with is what you can dig up and what you can grow. That’s not a very bright future for Australia.

“Both extremes of that leave Australia with a poor economic and national security future, but a mixed approach between the two can bring the best of both worlds.”

Mr Taylor-Price says a question he is often asked is ‘what level of sovereign capability would be considered enough’ in order to secure Australia’s economic and national security?

Vault Cloud CEO Rupert Taylor-Price

A country like the United States with its scale and wealth would say that having a 90 per cent sovereign capability is bad and 100 per cent is good – and so aims to keep its own sovereign industrial capability between those numbers.

“The UK seems to target 50 per cent to 60 per cent, while for Australia I think a close to 40 per cent for me [seems like an appropriate target],” he said.

On AI, Mr Taylor-Price says procurement is one of the biggest policy levers that government has to shift the need on the maturity of the Australia market – both in terms of buying and producing AI systems and infrastructure.

The biggest challenge for the country in AI right now is that Australia is not a mature consumer, it is not thriving in the way that global peers are. While Australians’ self-image is as a nation of early and sophisticated users of technology, among business users of AI this is not the case.

“You’ve got some market leaders like BHP and the Commonwealth Bank really trying to lean in, but that’s leaning in relative to Australia,” he said.  “When you go and look at what’s being done elsewhere in the world, they would not be considered particularly progressive [on AI].”

There is a level of frustration in relation to procurement. The government has set a clear direction on procurement policy through the Buy Australian Plan and the Future Made in Australia initiative – and it has a clear mandate to continue pursuing these ambitions.

“It’s unfortunately just taking a very long time to translate [these policies] into procurement outcomes,” Mr Taylor-Price said.

Do you know more? Contact James Riley via Email.

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