Technology companies generate jobs with higher revenue per employee than almost any other sector, according to a report from StartupAUS, an umbrella body that represents startups in Australia.
This chart from the StartupAUS Crossroads report shows tech jobs have a higher labour productivity rate compared to the mining sector and tourism.
Tech jobs also have a larger multiplier effect than jobs in other sectors, the report says.
According to University of California economics professor Enrico Moretti, for each new technology-based job, five additional jobs are created in other sectors. The multiplier effect is three times larger than in extractive industries or traditional manufacturing.
In a stat that shows the size of the US sector relative to Australia’s large companies, the top 150 companies in Silicon Valley are all tech-based and have a combined market cap of $AU2.4 trillion, exceeding the entire 2,400 companies listed on the ASX which have a combined value of about $AU1.65 trillion and employ 1.3 million people.
There’s a lot of room left for growth in Australia: software companies only make up 4% of the number of companies listed on the ASX and 1.4% by value.
“Even if the commodities boom lasts decades, Australia is in trouble. In Silicon Valley it took 60 years to create the structural, cultural and financial infrastructure to repeatedly create new billion dollar technology based industries. We massively underestimate the long term impact of current technology trends and market shifts impacted by the technology,” said Adrian Turner, author of Blue Sky Mining: Creating Australia’s Next Billion Dollar Industries, in the Crossroads report.