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Australian tech industry at a crossroads: Daniel Petre

Australian tech industry at a crossroads: Daniel Petre

There are some very good startups but not much at scale, says Petre

Airtree's Daniel Petre: "The next 10 years will define Australia’s economic prosperity, done and dusted."

Airtree's Daniel Petre: "The next 10 years will define Australia’s economic prosperity, done and dusted."

The Australian IT industry is at a crossroads and it has a choice: participate as a producer of the world’s greatest applications and services or just be a user, former ninemsn founding chairman Daniel Petre said on Wednesday.

Speaking at the AWS Summit in Sydney, Petre, who is now a partner at venture capital firm Airtree and an adjunct professor at the University of New South Wales, said we need to decide whether or not we are going to produce ‘vertical use cases’ for technology or ‘just use somebody else’s.’

“Historically, we haven’t been very good at doing a lot of innovation. This is not an opportunity for us to do a practice run, this is a ‘one shot.’ The next 10 years will define Australia’s economic prosperity, done and dusted. What we do now really sets the stage for the long term,” Petre said during an impassioned speech.

“You’ve heard about AI and machine learning – every board in every company talks about it, no-one knows what they mean … no f**king idea. They have to nod knowingly when somebody mentions it.”

Petre pointed out that China is spending $1 billion per year on PhDs and data scientists; and France announced last week that it is spending $2.4 billion on AI infrastructure alone between now and 2020. Google and Microsoft call themselves AI companies, he said.

“Google and Microsoft call themselves AI companies. All these countries and companies are running at 100 miles an hour and what’s happening in Australia? There are some very good startups but not much at scale; lots of science projects but at scale, they [projects] are very few and far between, we are behind the 8-ball,” he said.

Petre rightly said that there will be a whole bunch of lower-order, repetitive jobs that will disappear in the future and he used an experiment with pigeons to illustrate his point.

Pigeons share the same neural pathways as humans from their eyes to their brains. During this experiment, if a pigeon clicked on a breast cancer cell slide, it received a food pellet; if it clicked on a non-breast cancer cell slide, it didn’t.

“In 6 weeks of training, the average pigeon was 85 per cent accurate in picking breast cancer cells. The best breast cancer oncologist in the world is 94 per cent accurate,” he said.

The researchers then ‘flock-sourced’ the pigeons and as a group they were 99 per cent accurate in picking breast cancer cells, said Petre. "So should pathology labs employ pigeons? No they shouldn’t but the point is that this is just pattern recognition, this is not a high order job or high order skill. And there will be a whole lot of jobs … that will disappear. What we need to do as a country is work out how to take those new roles that are created, those new application use cases.

“It’s our opportunity to become an innovation nation, to shake ourselves up, to see where the new jobs will be … and how do we create national wealth in that environment and how do we ensure that the debates that we have in this country are based on the right premise and not about who will fund the next coal fired plant or whether it’s 30 or 31 polls that really matter in terms of leadership in this country.”

Meanwhile, Petre said that if someone has a good startup organisation and they are having trouble getting funding, "it's probably shit."

"If you can't get money today, it's a shit idea or maybe you are very early and in 20 years time, they will tell you that you were right."

He added that our university research is of high quality, our skills base is small but growing.

"We don't have enough skills for the jobs we need done to build the great companies. So what would you do as a government? You cut off skilled immigration, genius move. Now that's been turned around but we are now seeing companies telling people with skills who are not native to piss off, which is terrible thing. In the United States, 12 per cent of the working population is foreign born, 44 per cent of the working population in Silicon Valley is foreign born and 65 per cent of the founders of Silicon Valley are foreign born.

"Foreign born skilled immigrants are useful."

Finally, he said the lack of corporate research and development is also a big issue for Australia.

"Australian corporates spend, it's a technical term called sweet f**k all, on R&D," he said. "It's really low. Let's take Procter and Gamble and a large grocery company, I don't know, pick a name. You'll see that the FMCG companies in the U.S. are spending 8 or 9 per cent of revenue on R&D. What are the Australian equivalents spending? Sub 1 per cent.

"[Equivalent] Australian corporations are in oligopolies protected by market characteristics and structures, they watch [innnovations] coming over and respond as opposed to looking over the horizon as to what the product should be in 10 years not in 3 or 6 months' time."

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Follow Byron Connolly on Twitter: @ByronConnolly

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