Tech sector contributed $249b to economy in FY25: Tech Council
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The news: The tech sector contributed an estimated $248.5 billion to the Australian economy, when including indirect effects, according to a new report published by the Tech Council of Australia. The sector was responsible for the second largest contribution, behind mining.
When excluding indirect impacts, the tech sector falls to ninth place, narrowly surpassing the transport, postal and warehousing sector for its economic contribution.
The numbers: The headline figure includes the direct $126.2 billion contribution from technology companies and an additional $122.3 billion from indirect tech-enabled activity, which includes “all other industries that embed, deploy or rely on digital technologies to deliver goods and services”, according to the report.
Together, the tech sector made up 8.9% of Australia’s GDP. This is up from 7.5% in FY20 ($149 billion) and 6.1% in FY15.
The direct tech sector had the second highest labour productivity in FY25, behind mining, at about $317 per hour worked.
The combined direct and indirect tech sector had the fifth highest labour productivity at $143 per hour worked beyond the mining and direct tech as well as electricity, gas, water and waste services, and financial and insurance services.
The value of Australian tech goods and services exported in FY25 was $13.7 billion, which was 2.7% of the value of Australian exports. This is up from just over $8 billion in 2017 and represents an annual growth rate of about 5.5%.
Tech exports are now mainly going to the US (43.8%). In FY16 however, they were mainly going to Asia (43.1%).
The context: The report, launched ahead of the Tech Council’s annual showcase event in Parliament House on Monday, argues that “technology is Australia’s most powerful engine of productivity and economic growth” and highlights that AI and other technologies are the “next frontier to extend these gains”.
It also notes that the concentration of tech exports going to the US creates a “strategic exposure” and calls for a diversification of markets, building resilient value chains and strengthening international collaboration to ensure innovation benefits “are not jeopardised by shifts in global economic or geopolitical conditions”.
The report lands after Treasury Jim Chalmers said the upcoming federal budget will include a reform package to boost productivity and investment. This follows concerns that the Australian economy is operating at the limit of its productive capacity, creating inflationary pressures.
It also follows the release of a government commissioned year-long review into Australia’s research and development system led by Robyn Denholm, which outlined a reform package to aimed at supporting sustainable long-term growth in Australia.
What they said: “To maintain this momentum and stay competitive, we need to focus on increasing investment, strengthening the workforce pipeline, and ensuring our regulatory settings continue to encourage innovation,” Tech Council head of research Ilana Feain told Capital Brief.
“This is why we support the findings of the Ambitious Australia report [into Australia’s research, development and innovation system] and want to see its recommendations taken up by government,” she said.
She also noted that while tech productivity “has shown strong growth”, its impact in complex sectors like healthcare may take longer to show up.
More broadly, Feain said “productivity is also a lagging indicator, and the structural shifts we are seeing now will take some time to be fully reflected in national data”.
The source: Tech Council of Australia report
