The Australian Information Industry Association (AIIA) has partnered with Info-Tech Research Group (ITRG), an international information technology research and advisory firm, to develop Australia’s first technology index that looks across the Australian economy to understand purchasing and investment intentions around technology.
The AIIA Tech Index measures the buying sentiment for Australia’s IT sector, illuminating areas of opportunities for major procurement and tender opportunities across the whole of the economy, including government.
The Index will track a representative group of IT decision-makers from various industries, company sizes, and budget sizes to understand how they plan to build and improve upon IT capabilities that will support the business bi-annually.
This first report sets the benchmark for future comparison, and future data will be incorporated into an index to track the progress of digital transformation and investment in Australia.
The AIIA Tech Index – Four Key Insights.
- Insight 1. Government-enacted regulatory and policy uncertainty cited by most CIOs as a top concern.
The first report has yielded interesting insights, starting with CIOs’ concern over increasing regulation and policy uncertainties that could disrupt their businesses this year.
The AIIA recognises this as a fresh concern in the many years of tracking policy developments, noting that there has indeed been a marked increase in government wishing to regulate the technology sector and how it is to be used across the economy, including cyber security, e-safety, privacy and AI regulatory reforms over the past 12-24 months. CIOs from across the economy are seeing this as an uncertainty for their business.
- Insight 2. IT budgets are set to increase with Government spending increasing the most and the Education sector struggling to keep up.
Overall, 81% of the respondents expect to increase their IT budgets in the next 1 to 3 years, with 90% of the Government IT leaders expecting to do so. Comparatively, 55% of the respondents expect at least a 10% increase, while 60% of the Government IT leaders expect the same.
In contrast, 40% of the IT leaders in the education sector expect no change. Another 40% in this sector expect a marginal increase of 1 to 9%, and only 20% expect a 10 to 29% increase in IT budget. This means the education sector is underinvesting against the rest of the economy when it also states cyber threats are a pressing issue.
- Insight 3. Cyber security and cloud solutions to dominate buying and hiring decisions in 2024.
Australian IT leaders listed resilient transformation, data governance and modernisation as their top three priorities. Correspondingly, cyber security (56%) and cloud solutions (47%) will dominate buying decisions. In line with this, the top two skills in demand are cyber security (91%) and data analytics (63%).
Meanwhile, the top technology for net new spending is Artificial Intelligence (28.3%), and the top technology receiving additional spend is cybersecurity solutions (79%).
- Insight 4. Job growth is expected, especially due to demand for skills in cybersecurity, data analytics as well as information management and governance.
Positively, despite the increasing investments in technologies, the industry continues to expect job growth. 42% of those who responded note that it will increase headcount by 1 to 9%, while 29% will increase headcount by 10 to 29%. Only 8% indicated that they will have a 1% to 9% decrease in headcount.
The increase is largely driven by companies with a budget of over $50M. The top talents in demand are those with cyber security, data analytics, and information management and governance skills.
A majority of IT leaders plan to build internal staff capabilities before seeking managed or professional services to fill skills gaps.
The AIIA CEO, Mr Simon Bush, commented, “The Tech Index has already proven to be a useful tool to uncover areas for improvement in the tech ecosystem,”
“This first report makes it clear that while the government has an ambitious tech-focused agenda, the industry is also seeking policy and regulatory certainty and continuity while investing in their businesses,” said Bush
“The AIIA has been vindicated by this report in its previously stated support for better policy and regulatory coordination by the government and the establishment of a new whole of government coordination body to achieve this.”
“The report is also encouraging because it shows the industry simultaneously investing in defending and modernising their business operations and in retraining in-house talents,”
“We want to encourage greater innovation and the upskilling of the Australian workforce. The temperature check assuages fears of job disruptions and helps Governments and industry understand we should focus our efforts on cyber security and data analytics training and accreditation.” he said.
By introducing the AIIA Tech Index, both organisations have pioneered a groundbreaking tool that sheds light on the country’s IT sector’s purchasing sentiment and investment intentions.
The index not only provides valuable insights for businesses but also serves as a strategic resource for government procurement and tender opportunities.
