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This veteran Silicon Valley executive explains how Australia can win in the tech sector

Phil Dunkelberger of Nok Nok Labs / Supplied

The natural affinity Australians have with travel and taking risks, along with the country’s unique location in the English-speaking world, combine to create powerful opportunities for the nation’s technology sector, according to veteran Silicon Valley executive Phil Dunkelberger.

Australia’s comparatively tiny domestic market of 24 million people means the capacity for business ideas and products to scale globally is a critical requirement for entrepreneurs, private equity investors and large corporates in the tech sector. Australians have natural strengths in this area and the nation’s technology industry could benefit from some of the risk-taking that has helped make the country a mining powerhouse, says Dunkelberger, who previously served as CEO and president of PGP Corporation and in senior roles at Symantec, Apple and Xerox.

Dunkelberger’s PGP was a leader in encryption and “Dunk”, as he’s known, is a global authority on internet security. He is a director of Australian digital encryption company Covata, and is currently CEO of Nok Nok Labs and a board member of a range of other technology companies.

As prime minister Malcolm Turnbull urges Australian companies to focus on innovation to spur an “ideas boom” which can drive the next phase of economic growth, executives like Dunkelberger are critical for bridging the gap between companies like Covata, which listed on the ASX through a reverse takeover in 2014, and the dominant players in the global digital industry.

Speaking to Business Insider after a recent trip to Australia in which Covata announced a new partnership providing an Internet of Things security solution for connectivity giant Cisco, Dunkelberger said the extensive regulatory overheads created by the Patriot Act created opportunities for companies beyond the US.

He also said Australians were “risk takers by their nature” and their propensity to travel widely meant they were constantly being exposed to new ideas and experimenting with them in their businesses.

“Australians executives are well travelled,” Dunkelberger said. “They see a lot of different parts of the world in both their vacations and their business travel, and they’re not ones not to come back with new fresh ideas and try them in their own markets. I’m always encouraged, when I have discussions with Australian business leaders, by the curiosity about what others are doing and what best practices are, globally.

“One of the things I think Australia has from a cultural standpoint in its business is, they’re proud of being Australian, but proud of being part of a bigger whole. Australians realise that what they accomplish on their own should be celebrated and lauded. At the same time, they enjoy being parts of teams that bring new and different technology ideas out to the rest of the world.”

Dunkelberger believes the wealth amassed during the mining boom puts Australia in a strong position to find its next source of growth through investing in technology solutions that can be exported globally.

“Australia’s certainly had a record expansion of its economy – there’s a lot of wealth in the country to be invested and be managed,” Dunkelberger said. “I think one of the opportunities for them is to focus some of that wealth in investing in not only their own IT, but partnering with global IT initiatives that they can get a good return on.”

The full interview will be published on Business Insider this week, but here’s Dunkelberger talking about the opportunities for Australian tech companies.

Business Insider: You’ve just had a trip to Australia. Can you tell me what your assessment is of the local technology industry here in Australia?

Phil Dunkelberger: It’s an evolution down there. As far as the different types of solutions that the Australian market is coming up with, it’s traditionally known for being very good at application technology and development technology, and excellent source of developers of all types of apps. I see it evolving continually in the marketplace. [With] security types of applications, there’s a big advantage to be secured locally. It’s tough with things like the Patriot Act to build security in the United States. People want more [sources] of data, and data storage, and Australia is moving in that direction. At the event that we hosted with Covata and Cisco, Cisco has one of many centres of excellence that they’re building in Australia to showcase not only solution sets globally, but locally in Australia. So the evolution continues. Australia is traditionally known as a great dev tools source, builders of apps, and now what is quality across the board in upcoming technology.

BI: One of the things people do ask about in the local industry is where Australia fits in. There are a few limitations on the Australian market: the country’s only 24 million people and the geographical challenges are obvious. What would you say to that? Is there a reason for Australia to question what it can offer in terms of the global industry?

PD: I think in some senses in terms of location for Australia, if you’re going to have remote development teams where parts of the world are waking up or going to going to sleep, Australia’s on the line. So it gives you that third location in the world. It’s English speaking… [so] you got a ready-made workforce that are very resourceful. You got your dispersed teams that are useful working remotely. You’ve got teams that are big on communications because Australia’s remote, and to be an island, it plays to the advantage of the dispersed nature of the 24 million people. Data communications, developers, people having to work cohesively as teams: this is playing into the globalisation of IT. I think Australia has some geographic what people might think are limitations, but actually in some ways it plays very well into the globalisation of what people are seeking when they’re looking for additional areas to develop your talent in, or have your developers work within an organisation.

BI: On the leadership side, obviously you work very closely with Covata, you’re on the board. But you also come across and work with other Australian executives and investors. What would you say are the good qualities you see working in the global technology industry. And then you have to talk about some of the limitations after.

PD: I think some of the opportunities that I see are: Australians are risk takers by their nature. You don’t get any riskier than doing mining. [Australians] are excited about opportunities. And Australians executives are well travelled. They see a lot of different parts of the world in both their vacations and their business travel, and they’re not ones not to come back with new fresh ideas and try them in their own markets. I’m always encouraged by, when I have discussions with Australian business leaders, by the curiosity, about what others are doing and what best practices are, globally. One of the things I think Australia has from a cultural standpoint in its business is, they’re proud of being Australian, but proud of being part of a bigger whole. Australians realise that what they accomplish on their own should be celebrated and lauded. At the same time, they enjoy being parts of teams that bring new and different technology ideas out to the rest of the world.

Are there challenges and areas that you think Australians could improve on?

PD: I think the Australian technology leaders in some ways, because of the location of Australia and the home-grown solutions at times, they can be somewhat sheltered. The strength of being remote, and being able to develop, and being ingenious in some cases, that also shelters you if you aren’t one of the Australian businesspeople or technical people that travel. I think the other thing is that the Australians tend to have a very large base of … capability long-term the way they look at spending and investing their money. I think that the Australian market is ripe for more venture partnering, more risky investment along the lines of what they’re comfortable with in the mining and prospecting areas.

I think the flipside is it spells a new opportunity for coming back and maybe partnering with VC firms globally. Australia’s certainly had a record expansion of its economy – there’s a lot of wealth in the country to be invested and be managed. I think one of the opportunities for them is to focus some of that wealth in investing in not only their own IT, but partnering with global IT initiatives that they can get a good return on.

BI: Covata can develop the technology but the way to get it in front of the largest market possible is partner with a global operation like Cisco. Do you think there are any things that Australian companies should be prepared for when they’re entering into those partnerships with the really big global players?

PD: Covata’s a good point, to your example of finding both technology and channel partners like their relationship with eSystems, they’re finding ways to distribute product in areas much bigger than themselves. That’s a very good strategy at all levels whether it’s an Australian tech firm or another type of tech company. Finding people who other large organisations are comfortable buying from – I think that’s a good idea. One of the other things that Australians have been adept at: I’m on the board of another company, a UK based company, called MyPinPad. It’s a company that really has a chance to make its mark on the burgeoning world of mobile payments. There’s a lot of expertise in this company, but mostly funded out of Australia in the UK.

Again, long reach to find technology investment that the Australians can not only contribute to, both monetarily and with talent, but at the same time looking for new markets to open up that aren’t ready-made in the Australian marketplace…. Then the second piece is finding new technologies. As a board member you’ve gotta know that the large organisations move at their own pace. Small companies tend to be able to move quicker: more adroit, more adept. Larger companies, when you partner, you’re going to end up having to find their business rhythm that you can exist in. And that is sometimes challenging for any startup, to move at the pace of a very large organisation of any kind.

BI: What advice would you give to founders, executives, investors when it comes to getting comfortable with those kind of relationships and the different paces that companies move at?

PD: It’s not unlike any business: you’ve got to find your customer or partners, the problem you’re helping them solve, why they’re looking to you. You’ve got to have a really good understanding about how they go to market, and the cultural nature of the business. Not the formal nature of what they do, but the informal way they work. All organisations are made up of both formal structures and informal structures. I find when you’re a startup, it’s more key to understand how informally they work, culturally, because in that way you might find ways to speed things up without being disruptive. You might find a shaker or mover, who isn’t on the org chart with a big title, but is very influential in pushing things forward for you, and faster if you need it to be.

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