Digital growth crucial for business

There is a dichotomy in Western Australia’s ICT challenges, and those of the nation more broadly, which highlights the complexity of a continent as sparsely populated as Australia.

In the cities in late 2022 and early 2023, headlines were dominated by a lack of adequate systems and security among some of the largest and most trusted brands, which led to the personal details of millions being compromised by the two largest cyber attacks in Australian history.

It was a sequence of events that prompted Australia to appoint a National Cyber Security Coordinator, develop a cyber security strategy, launch a Hack the Hackers Taskforce, and prompt Home Affairs Minister Clare O’Neil to warn of a dystopian future without action.

The national commitment was to fight back, by building capability and ensuring the safety of critical infrastructure and systems to avoid similar instances in future.

Security, safety and resilience were highlighted as paramount.

Just over a month after Ms O’Neil’s commitment to locking down Australia’s data security, concerns around an ICT (information and communications technology) issue of a very different kind were heard at a sitting of a federal parliamentary inquiry in Perth.

Addressing the Standing Committee on Communications and the Arts’ inquiry into co-investment in multi-carrier regional mobile infrastructure, Department of Primary Industries and Regional Development Acting Director of regional development solutions Penny Griffin spoke on regional concerns over the abolition of the 3G mobile network, scheduled to phase out late this year.

Asked whether phasing out 3G would create more gaps in the network in regional WA, Ms Griffin said there were some concerns.

“It is certainly a fear that the 4G network looks smaller than the 3G network,” she said.

“The carriers all say, ‘yes, we will match the 3G network’. How they go about that is going to be through some new technology approaches, I think some of them are looking at satellite-connected macro cells or low-Earth orbiting satellites to provide that kind of coverage.

“It hasn’t been quite worked through. It’s not going to be the same.”

In the same hearing, the Nationals’ federal member for Parkes, Mark Coulton, expressed dismay with those refusing to keep their communication devices up to date.

“One of the frustrations is that I find that some of the most switched-on people in business, when it comes to telecommunications, are stuck in 1975,” he said.

“Do we need to do more? One of my frustrations is that quite often there’s an answer to this.

“You’ve got someone driving a $120,000 LandCruiser Sahara, but they refuse to put in a Cel-Fi because they think that the government should be putting up more towers.”

Whether or not the responsibility should fall back on the individual or government is another conversation entirely.

But grappling with mobile phone black spots courtesy of the discontinuation of a network more than two decades old while simultaneously investing in state-ofthe-art cyber protections for national ICT infrastructure would appear to be a uniquely Australian position to be in.

Even beyond the National Broadband Network, geography continues to play a key role in shaping the ICT landscape.

Minister for more

State Minister for Innovation and the Digital Economy Stephen Dawson went into his conversation with Business News keen to clear the air.

The minister wears many hats across portfolios including science, emergency services, medical research, and in his capacity as minister assisting the Minister for State and Industry Development; Jobs and Trade – Premier Roger Cook.

One key acronym conspicuously absent from his list of responsibilities since a cabinet reshuffle at the end of 2022 is ‘ICT’.

The term was replaced in his title by ‘digital economy’ by the time parliament first sat this year.

Mr Dawson was determined to communicate the nature of the change he termed the “elephant in the room.”

“That change of name came about to reflect the wide-ranging nature of the global digital transformation,” he said.

“The digital economy really is broader than the ICT sector, and it increasingly impacts government, industry and the community.”

Mr Dawson said ICT industry stakeholders, including the Australian Information Industry Association, had actively advocated to change the name of the portfolio.

“They saw it being more than just ICT, they saw the opportunity and potential to transform the digital economy,” he said.

The state’s jurisdiction over digital economy does not extend to NBN or 3G, nor is ICT or digital economy incorporated by name as an individual pillar within the Future State Strategy rolled out earlier in the year by the now premier.

A quick look across the sector-specific opportunities outlined demonstrates why.

From renewable hydrogen to medical products and digital health, to space and cross-sector technologies, the need for strength in the state’s digital economy is essentially a given.

It’s not so much a choice for government to engage with ICT systems and infrastructure, and the digital world beyond.

“Digital transformation really is a fundamental driver of global change,” Mr Dawson said.

“There’s significant flows of data and information in the world that now generate more economic value than the global goods trade.

“We’ve seen ChatGPT, and what AI and what data has brought about in terms of change around the world.”

Shane Quinn says learnings from the pandemic have opened doors nationally.

The government is exploring ways to ‘de-identify’ and use the troves of data it has across health and education.

It is keen to take lessons from the world-leading resources sector on remote operations for application across to other industries.

“As a government, we want to provide businesses and individuals with convenient and secure online government services, making it easier to allow them to access any government service any time from anywhere,” he said.

“It’s a slow process, because as I jokingly say, ‘we’ve got some agencies that are still using Excel spreadsheets’, and we’re trying to move them to the digital economy.”

The challenges of ‘digitalising’ the public sector were laid bare in the Auditor General’s annual review of government agencies released mid-year.

The 2021-22 report identified 566 information control system weaknesses across 61 government entities, warning the public sector was left at risk of data breaches, system outages and financial loss if left unaddressed.

Of those identified, 59 per cent remained unresolved from a year earlier.

In 2021, the government established a $500 million Digital Capability Fund designed to assist digital transformation in the public sector and upgrade its legacy ICT systems.

The same year it launched a whole-of-government Cybersecurity Operations Centre.

But there is clearly much more to be done.

“The Auditor General reports are valuable pieces of work, and important learnings for us to have,” Mr Dawson said.

“Some of those issues are easier to fix than others, and the Digital Capability Fund has been able to help fund some fixes for some of those things.

“But, most importantly, it’s funding agencies with new technologies, with the ability to upgrade their legacy systems to move away from Excel spreadsheets and into modern ICT systems.”

This has become increasingly important post-pandemic, with the minister taking the view that a historical cultural aversion to digital change was slowly shifting.

“I think COVID was a game changer in that it did change the mindset of many people, and opened their eyes to signing up, signing in and using phones more to access digital services,” he said.

“I think the reticence is slowly breaking down.

“But what people want to know is that their data is secure. That’s really important.”

Post-pandemic impact

A recent CSIRO report which mapped the geography of Australia’s digital industries identified four technology innovation “super clusters” – areas likened to the Silicon Valley for the creation of a significant digital ecosystem.

All sat on the east coast, with WA performing comparatively poorly compared with those in Sydney, Melbourne, Brisbane and Canberra, with clusters credited for growing, employing and innovating at faster rates than areas outside of them.

But the state’s largest ICT firm by number of staff, privately owned and Perth-founded Kinetic IT, told Business News the impact of the pandemic on understandings of remote work had opened the business to more opportunities.

Kinetic chief operating officer Shane Quinn said the IT service provider had noticed a shift in customer preferences post-pandemic, allowing it greater workforce flexibility.

“I think a really good example for me is that we had some customers that were very specific about wanting to have in-region people, and in fact on-site people,” he said.

“In COVID like us, everybody was forced to realise you can do some of this stuff remotely.”

Mr Quinn cited the tight market in Canberra, where pay is high and clearances were required to win work, as an example of a market that had opened in a post-COVID work environment.

“Typically, everybody’s struggled in that market, whether it’s agencies or different providers, but what we’ve learned more and more is if you’ve got good people – whether they’re in WA or in Brisbane or wherever – they’re more open to the right people for the right outcome,” he said.

“That’s opposed to that kind of presenteeism culture, where you had to be in this market, or you had to be in that market.”

Kinetic’s growth is testament to its flexibility.

The company has expanded across the country since starting in Perth in 1995, with offices in Melbourne, Brisbane, Canberra and Sydney and more than 650 ICT and professional staff in WA, according to Data & Insights.

The company’s revenue has grown at a compound annual growth rate of 20 per cent over the past two decades, to sit at around $200 million.

In June, Kinetic was awarded a three-year, $50 million contract as lead enterprise service management partner for the Australian Taxation Office, delivering services to the ATO’s offices across the country.

It followed a major $72.3 million share of a three-year contract won late last year with the Department of Communities, and a share of a seven-year, $504 million contract to an alliance of four firms led by Kinetic to deliver services for the Department of Education in mid-2021.

Mr Quinn said Kinetic was focused on maintaining dialogue with its customers wherever they were, with relationships and continual improvement critical to contracts often spanning significant amounts of time.

He identified optimising the benefits of the cloud, cyber security and artificial intelligence as the three major trends at play in the market.

“Clouds have been around for a while, but now we’re seeing the advice of running in the cloud as becoming a big part of our conversations,” he said.

“Cyber is a big topic in every company these days, from the board all the way through the organisation, and we don’t see that changing – it’s a constantly moving thing.

“The third is AI, which is probably the topic everyone is talking about.

“At the moment, we see that there’s opportunity and risk attached to AI and both of those are playing out at once.

“Our customers are thinking, ‘how do we use it, what are its downsides, and what sort of policies can we put in place to actually allow us to use it in a way that makes sense for us, without opening up that downside risk’.”