VICTORIAN ICT ACTION PLAN an Information and Communication Technology Plan for Victoria’S Future PUBLISHED by the STATE GOVERNMENT of VICTORIA

VICTORIAN ICT ACTION PLAN An information and communication technology plan for Victoria’s future PUBLISHED BY THE STATE GOVERNMENT OF VICTORIA

THIS PUBLICATION IS COPYRIGHT. NO PART MAY BE REPRODUCED BY ANY PROCESS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE COPYRIGHT ACT 1968

AUTHORISED BY THE STATE GOVERNMENT OF VICTORIA, AUSTRALIA

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PUBLISHED BY MULTIMEDIA VICTORIA, DEPARTMENT OF INNOVATION, INDUSTRY AND REGIONAL DEVELOPMENT WWW.MMV.VIC.GOV.AU

IF YOU WOULD LIKE TO RECEIVE THIS PUBLICATION IN AN ACCESSIBLE FORMAT, PLEASE CONTACT 03 9655 8961 OR EMAIL ENQUIRIES!MMV.VIC.GOV.AU CONTENTS

2 PREMIER’S FOREWORD

3 MINISTER’S FOREWORD

4 EXECUTIVE SUMMARY

7 ICT IN VICTORIA ! A STRONG FOUNDATION FOR GROWTH

13 GOVERNMENT INVESTMENT OVER THE PAST FIVE YEARS

19 THE VICTORIAN ICT ACTION PLAN

23 BUILDING LOCAL CAPABILITY AND EXPERTISE Action 1 – Support the development of industry capability and expertise

29 BUILDING VICTORIA’S GLOBAL PROFILE Action 2 – Increase the global proﬁle of the Victorian ICT industry

35 TRANSFORMING RESEARCH AND DEVELOPMENT A ction 3 – Establish Victoria as the Australian centre for ICT-enabled research and development

41 GOVERNMENT FOSTERING INNOVATION THROUGH ICT Action 4 – Use ICT to foster innovation

47 DEVELOPING THE SKILLS FOR THE FUTURE Action 5 – Ensure Victoria has the skills to enable innovative use of ICT

53 ACCELERATING BROADBAND Action 6 – Establish Victoria as the most extensive and productive broadband economy in Australia

59 ACRONYMS PAGE 02 VICTORIAN ICT ACTION PLAN

PREMIER’S FOREWORD

Over the last 10 years, Victoria’s productivity growth has been higher than any other Australian state. We can be proud of our strong, dynamic economy; our healthy, productive, and energised workforce; and that we are home to some of the smartest and most innovative minds in the world.

As we think about the shape of our future economy, it is clear that information and communication technology (ICT) will play an increasingly important role. Societies all over the world will have to either embrace the new technology, or risk being left behind.

Here in Victoria, we are placing ourselves right at the forefront of the ICT revolution.

The Victorian ICT Action Plan outlines exactly how our government intends to secure Victoria’s position as a global centre for excellence in ICT.

Brieﬂy, we will do this in six ways:

i we will help local ICT businesses to develop their own capabilities, by improving access to expertise and ﬁnance

i we will also assist them to access global markets – both established and emerging

i we will build on our already strong reputation as Australia’s leading centre for ICT research and development

i the Victorian Government will lead the way in encouraging new and innovative ways of using ICT in our state

i we will make sure that as demand for ICT skills continues to grow, our nation-leading, highly skilled ICT workforce grows to meet that demand

i we will continue to advocate strongly with the Australian Government for high-speed, high-capacity broadband coverage to be increased and expedited in Victoria.

ICT will continue to play an important role in every single aspect of our economy, and in our broader society; and in the way we relate to the world. Indeed, Victorians are already receiving global attention for the ways in which they are applying ICT to areas as diverse as biomedicine and water e#ciency.

The Victorian ICT Action Plan is the next step forward—and I commend it to all Victorians.

The Hon John Brumby Premier of Victoria PAGE 03 VICTORIAN ICT ACTION PLAN

MINISTER’S FOREWORD

Victoria is Australia’s technology hub and this is one of the foundations of our ongoing strong economic performance.

Since 1999, the Victorian Government has recognised the huge impact ICT and the ICT industry has on the state. We have worked closely with industry to establish world-class ICT capabilities and infrastructure, stimulate innovation, and create favourable conditions for growth.

Rapid developments in ICT—with the potential to disrupt market structures and create new capabilities and ways of working—continue to be a basis for economic and other growth opportunities in Victoria. The proliferation of web 2.0 applications, cloud computing and mobile technologies is a$ecting business strategies, commerce, personal communication and entertainment.

Victoria’s ICT industry plays a fundamental role in capturing the beneﬁts from these changes, as well as helping to develop new capabilities to solve the most di#cult current and future societal issues in health, education and the environment.

The Victorian ICT Action Plan has a dual focus on the production and use of ICT. It has a range of strategic investments in initiatives, projects and programs to build local capability, expertise and our global ICT proﬁle as well as drive transformational research and development, broadband uptake, and applications. As a signiﬁcant user of ICT, the Victorian Government can also help to encourage a more innovative local ICT market and help to build global capabilities.

I have been pleased with the interest and involvement of the ICT sector and other Victorian businesses in the development of the plan. I am conﬁdent it provides the right platform to accelerate the innovative use and application of ICT across Victoria’s economy, and drive overall industry growth, jobs and exports.

Industry has achieved a lot over the past 10 years, and I look forward to a fresh period of prosperity under the Victorian Government’s new Victorian ICT Action Plan. The plan represents a further commitment of more than $110 million and is the holistic approach needed to continue developing and beneﬁting from opportunities provided by technology.

I look forward to delivering the Victorian ICT Action Plan across all sectors and working to ensure Victoria captures the maximum beneﬁts o$ered by the greater use of ICT.

John Lenders MP Treasurer Minister for Information and Communication Technology PAGE 04 VICTORIAN ICT ACTION PLAN

EXECUTIVE SUMMARY

The Victorian ICT Action Plan is a comprehensive policy framework to maximise the economic and social beneﬁts from the use of information and communication technology (ICT) over the coming years.

The importance of ICT to economies and societies through productivity, innovation and quality of life is well-known.

As a developed economy largely fuelled by the creation and application of knowledge, Victoria continues to rely on and be a major beneﬁciary of ICT. ICT has become a fundamental piece of economic and social infrastructure and a prerequisite for the competitiveness of countries and companies worldwide.

Victoria has a strong record of technology adoption and a number of sectors are e$ective users of ICT. Underpinning this is a stable and mature local ICT industry. These local ICT capabilities provide the foundations to secure ongoing economic growth and other beneﬁts for the state.

The Victorian ICT Action Plan will accelerate innovative use and application of ICT across our economy. The plan continues Victoria’s leadership in ICT policies and programs and will ensure ICT continues to play a key role in the development of a prosperous, sustainable and liveable Victoria.

What’s new

The new plan:

i Strengthens the role ICT can play in driving innovation and productivity in Victoria

i Increases focus on Victoria’s emerging ICT capabilities, such as in online media and digital publishing

i Increases trade and Victoria’s international proﬁle in high-growth and emerging markets through working closer with industry

i Directs new investments and e$ort into building Victoria’s global ICT research and development credentials through National ICT Australia Victoria Research Laboratory and development of an eResearch strategy

i Renews focus on the innovative use of ICT in government and driving more market innovation

i Broadens e$orts to strengthen Victoria’s ICT and innovation skills base to meet changing demand

i Positions Victoria as the most extensive broadband enabled economy in Australia as part of the National Broadband Network roll out. PAGE 05 VICTORIAN ICT ACTION PLAN

The Victorian ICT Action Plan has six major actions.

Action 1 – Support the development of industry capability and expertise

Local ICT capabilities, products and services are critical to the exploitation and innovative use of ICT across the economy. The Victorian Government will work with the local ICT industry to encourage greater collaboration and develop capabilities in new areas. It will also assist businesses to become more globally competitive by supporting commercialisation and access to ﬁnance.

Key initiative: Provide up to $4.1 million over the next four years to implement an online media and digital publishing strategy

Action 2 – Increase the global proﬁle of the Victorian ICT industry

With a small domestic market and an open marketplace local businesses must proactively develop their global credentials. While continuing to focus on traditional markets in the US, UK and Europe, the Victorian Government will work with local ICT exporters to facilitate access to new emerging markets and raise Victoria’s ICT capability and investment proﬁle.

Key initiative: Establish a Super Trade Mission Program to India in 2011–12

Action 3 – Establish Victoria as the Australian centre for ICT-enabled research and development

Victoria has a strong history in ICT research and development (R&D) contributing to Victoria’s research profile and economic performance as well as supporting the development of solutions to major problems facing the state. ICT is also transforming the conduct of research by enabling multi-disciplinary analysis of large data collections and collaborative research in new fields. The Victorian Government will continue to provide a supportive and stable environment for investment in R&D and work with the research sector to improve Victoria’s research capabilities and profile.

Key initiatives: Provide up to $33 million additional funding for National ICT Australia Victoria Research Laboratory (NICTA VRL) to 2014–15 and additional support to the Institute for a Broadband- Enabled Society (IBES)

Develop an eResearch strategy PAGE 06 VICTORIAN ICT ACTION PLAN

Action 4 – Use ICT to foster innovation

As a major purchaser and user of ICT products and services, the Victorian Government can play an important role in demonstrating and stimulating innovative use of ICT in the state. The Victorian Government is increasingly using Gov 2.0 tools to better engage with the community and will put in place additional tools and frameworks across government to drive adoption and improve access to public sector information. It will also continue to invest in projects that demonstrate e$ective use of ICT and foster the development of innovative applications and services.

Key initiatives: Support the development of innovative next generation ICT applications through the collaborative Internet Innovation Fund and Re-Innovate Broadband Program

Deliver a second round of the Smart SMEs Market Validation Pilot Program in 2010–11

Conduct a second App My State competition in 2011

Expand data.vic.gov.au

Action 5 – Ensure Victoria has the skills to enable innovative use of ICT

A highly skilled ICT workforce is critical to the innovative use and application of ICT across the economy. Victoria is recognised as the preeminent state for the supply of ICT skills however it is likely that demand for some ICT skills will continue to exceed supply. The Victorian Government will broaden and extend its e$orts to strengthen Victoria’s ICT and innovation skills base to meet changing demand.

Key initiative: Refresh the package of skills programs and support in 2011, including around industry-based learning, to ensure a high quality supply of ICT workers continues to be produced in the state

Action 6 – Establish Victoria as the most extensive and productive broadband economy in Australia

Access to a high-speed, high-capacity broadband network is central to all modern economies. The shift to a ubiquitous broadband society over the coming years presents opportunities and challenges for Victoria. The Victorian Government will continue to advocate to the Australian Government to maximise the level of ﬁbre coverage in Victoria and invest to extend Victoria’s competitive ﬁbre optic backhaul infrastructure.

Key initiative: Advocate to the Australian Government for the National Broadband Network to exceed its minimum roll out obligations and facilitate a quick roll out across the state ICT IN VICTORIA ! A STRONG FOUNDATION FOR GROWTH PAGE 08 VICTORIAN ICT ACTION PLAN

ICT IN VICTORIA ! A STRONG FOUNDATION FOR GROWTH

THE IMPORTANCE OF ICT

It is not hard to ﬁnd evidence that demonstrates the importance of ICT to economies and societies. The impact of ICT on measures like productivity, innovation and quality of life has been intensely reviewed and commented on over the last 20 years.1

As a developed economy, largely fuelled by the creation and application of knowledge, Victoria continues to rely on and be a major beneﬁciary of ICT. ICT has become a fundamental piece of economic and social infrastructure and a prerequisite for competitiveness of countries and companies around the world.

Statistics showing the breadth of ICT adoption in advanced economies are often used to demonstrate its impact. In Victoria, over the past ﬁve years, use of ICT has continued to increase. By June 2008, 84 per cent of businesses had internet access, with almost 23 per cent of businesses receiving orders via the internet.2 Household internet access rose from 57 per cent in 2005 to 72 per cent in 2009.3

However, in future years, it is likely to be the depth of ICT adoption and use, rather than the breadth, which will be the better indicator of beneﬁts. The extent to which ICT penetrates into the fabric of community, business and government activities will determine the degree of transformation, impact and beneﬁt.

Experts predict that ICT will continue to be the main technological driver of productivity growth in Australia for at least another 10 years.4 The Australian Treasury has identiﬁed the ‘ICT revolution’ as one of the four key long term trends that is likely to have a profound impact on the Australian economy and society, alongside the ageing population, climate change adaptation and the impact of China and India on Australia’s terms-of-trade.5

In 2010, the OECD drew attention to the important role that ICT plays as an enabler of innovation noting that ‘high-speed communication networks support innovation throughout the economy as much as electricity and transport networks spurred innovation in the past’.6

Global ICT spending is expected to return to growth following a period of overall decline in 2009, reaching 8.7 per cent globally by 2011 before ﬂattening out at around six per cent per year from 2013.7 Much of this investment will be in infrastructure. The Australian Government has committed $43 billion to build the National Broadband Network (NBN) between 2010 and 2017. As Victoria shifts to

1 A range of studies have been released over the past 10 years including OECD, The Economic Impact of ICT: Measurement, Evidence and Implications, 2004; Information Technology and Innovation Foundation, Digital Prosperity: Understanding the Economic Beneﬁts of the Information Technology Revolution, March 2007; and Productivity Commission, ICT Use and Productivity: A Synthesis of Studies of Australian Firms, 2004. Other relevant research is summarised in ACIL Tasman, ICT as a Driver of Productivity, January 2009 (white paper prepared for Telstra)

2 Australian Bureau of Statistics (ABS), Business Use of Information Technology, Catalogue No. 8129.0, 2007-08

3 ABS, Household Use of Information Technology, Catalogue No. 8146.0, 2008-09

4 Department of Communications, Information Technology and the Arts, Forecasting productivity growth: 2004 to 2024, 2006

5 Ken Henry, ‘The Shape of Things to Come: Long Run Forces A"ecting the Australian Economy in the Coming Decades’, Speech to the Queensland University of Technology Business Leaders’ Forum, 22 October 2009, p. 3

6 OECD, The OECD Innovation Strategy: Getting A Head Start on Tomorrow, 2010, p. 13

7 World Information Technology and Services Alliance, Digital Planet 2010 (draft), May 2010 PAGE 09 VICTORIAN ICT ACTION PLAN

a ubiquitous high-speed broadband environment, there will be major changes to our socio-economic landscape.

The quality and capacity of broadband services have steadily improved in Victoria since 2003, when only 75 per cent of Victorian households and businesses had access to entry-level broadband infrastructure. However, far exceeding the growth in supply is the appetite for increasingly higher capacity services. In mid 2010, there was signiﬁcant unmet demand in Victoria for broadband services, with more than 540,000 Victorian households and businesses unable to satisfy their preference for a higher quality service.8

As these challenges are overcome, ICT capabilities will underpin transformational improvements in health and education services, entertainment and business communications. ICT will be at the heart of strategies to address the most pressing challenges of our time in environment and resource management, urbanisation and population growth.

In the research sector, ICT has enabled multi-disciplinary analysis of very large data collections and collaborative research in new ﬁelds. Increasingly, it is integrated so tightly with other disciplines such as life sciences and nanotechnology, that advances in those ﬁelds would be impossible without it. ICT is also increasingly relevant for physical infrastructure, such as buildings, appliances, vehicles, sensors and transport systems, enabling them to become ‘smart’ and leading to a range of social, economic and environmental gains.

Importantly, the widespread availability and adoption of ICT means that innovation can become more common practice. ICT supports more open innovation practices involving users, customers and suppliers as innovation partners, and provides platforms for innovation by ﬁrms such as mobile applications, databases and information systems.

“AIIA commends the Victorian Government for the leadership demonstrated by progressive and long-standing support of the ICT sector through creative policies and strategies to build and grow the local industry.” Ian Birks, CEO, Australian Information Industry Association

LOCAL ICT CAPABILITIES Strong local ICT capability and infrastructure are critical to capturing the beneﬁts from the adoption and di$usion of ICT. Victoria’s ICT industry has continued to grow over the past ﬁve years, demonstrating a level of maturity and stability in the overall industry landscape.

During the recent ﬁnancial crisis, the industry was able to avoid the negative impacts that a$ected many other industry sectors, particularly overseas. While dominated by thriving small and medium companies, there is a good representation of large and foreign companies, giving the industry more balance and increased capacity to ride through economic cycles.

8 Access Economics, Telecommunications Spend and Demand Report in Victoria, May 2010 PAGE 10 VICTORIAN ICT ACTION PLAN

At the beginning of 2010, the industry employed around 87,000 people and generated annual revenues of approximately $27 billion. The Victorian ICT industry has maintained its contribution to the Victorian economy over the period and represented around four per cent of Victoria’s gross value add in 2008–09.9

Reﬂecting a growing global proﬁle, more Victorian ICT companies are exporting than ever before, and in 2010, annual overseas export revenues accounted for 12 per cent of annual ICT industry revenues.

Victoria’s main strengths are in software and services, network engineering, communications, games and ICT research. Individually, through their innovation and expertise, Victorian ICT ﬁrms such as Aconex, looksoftware, Enex TestLab and Sparx Systems are internationally recognised as providers of ICT solutions to a broad global market.

Victoria is home to 16 ‘clusters of excellence’, which are forums and networks to encourage collaboration, drive innovation and support the development of capabilities in emerging technology areas. Industry clusters such as those focused on mobile data (Mobility Vic), spatial information (Spatial Victoria) and radio frequency identiﬁcation (RFIDAA) have achieved a proﬁle on the international stage. Victoria is also developing a growing reputation and capability in new media and publishing, with SEEK, REA Group, CarSales, Crikey, SmartCompany, Sensis and Lonely Planet calling Victoria home.

Victoria and its local ICT industry have been successful in attracting strategic investment into the state over the past ﬁve years. Victoria’s lifestyle, people, infrastructure and proximity to South-East Asia make the state an obvious choice for multinational ICT companies including LogicaCMG and Fineos. Victoria is increasingly attracting companies from China and India such as Wipro, Infosys and Huawei.

In the last ﬁve years, Victoria has consolidated its position as a major centre for ICT R&D. Investment in higher education ICT research accounts for around 28 per cent of the national total.10 Companies such as Ericsson, Alcatel-Lucent and the NBN Co have chosen Victoria as the place for advanced ICT research in telecommunications, internet protocol television (IPTV), broadband TV and mobile TV. Victoria is also home to key ICT research institutes with a particular focus on applied telecommunications research such as NICTA VRL and IBES. Together these public and private investments ensure Victoria is increasingly recognised as a centre for advanced telecommunications capabilities. Signiﬁcant investments have also been made to strengthen research linkages between ICT and other sectors such as life sciences. Notable examples are the Victorian Life Sciences Computation Initiative—the world’s largest supercomputer dedicated to life sciences—and Bionic Vision Australia.

Victoria’s strong research capability is built on its recognised strengths in producing a highly-skilled workforce. In mid-2010 on average 131,500 people were employed in ICT across sectors, accounting for 4.7 per cent of the total Victorian workforce and around 27 per cent of ICT employment in Australia.11

Victoria has the largest proportion of higher education students in the country, with 35 per cent of ICT undergraduate and 40 per cent of postgraduate enrolments.12 Recent increases in ﬁrst preferences for studying ICT courses in Victoria suggest that the history of declining ICT enrolments may be turning.

9 ABS, Australian National Accounts: State Accounts, Catalogue No. 5220.0, 2008–09 (Re-issue), Table 3: Expenditure, Income and Industry Components of Gross State Product, Victoria, Chain volume measures and current prices. Estimate based on ‘information, media and telecommunications’ ANZSIC 2006 industry classiﬁcation

10 ABS, Research and Experimental Development, Higher Education Organisations, Australia, Catalogue No. 8111.0, 2008

11 ABS, Labour Force, Australia, Catalogue 6202.0, August 2010

12 Department of Employment, Education and Workforce Relations (DEEWR), Selected Higher Education Statistics, Commonwealth of Australia, 2008 PAGE 11 VICTORIAN ICT ACTION PLAN

“The Australian Computer Society commends the Victorian Government for continuing to focus on the importance of a strategic approach to the ICT industry, including ensuring we have a highly skilled workforce in order to support the use of technology in providing solutions to boosting productivity, competitiveness and innovation.” Jeanette Wirt, ACS Victorian Conference Chair, Australian Computer Society

FUTURE ENVIRONMENT

Given the intrinsic value of ICT to the Victorian economy, investment in ICT will continue to foster competitiveness and signiﬁcant economic beneﬁts. At the same time, technological developments and the roll out of the NBN over the next few years will present both challenges and opportunities.

Deployment of a new generation of direct ﬁbre or high speed wireless infrastructure to all homes and businesses will integrate high capacity connectivity into people’s everyday lives. High capacity connectivity will also extend beyond the home, as the next generation of wireless broadband and intelligent mobile digital devices enable people to connect anywhere, at anytime.

The ubiquitous broadband society will open up a range of transformative capabilities such as real- time access to high volume data and computing power, compelling ‘real life’ high deﬁnition visuals, the proliferation of peer-to-peer modes of communication and collaboration, and new ‘post-desktop’ intelligent digital devices integrated into everyday life.

As with the first wave of broadband, there are major new growth opportunities a$orded by the move to high capacity broadband. Research commissioned by the Victorian Government estimates an average productivity benefit per new broadband connection of $5,000 per year, and a $7.55 billion incremental increase in GDP benefits if regional areas are provisioned with high speed broadband.13

Local strengths in ICT software and services, telecommunications and ICT R&D will enable Victoria to take advantage of opportunities presented with the roll out of next generation broadband. Victoria is also well-positioned to respond to the growing demand for new applications and software associated with it.

For the local ICT industry, improved broadband services, along with cloud computing, software-as-a- service and the management and storage of large volumes of data, are among the major market and technological developments which will a$ect the business environment over the next few years. The imperative to ﬁnd less resource intensive ICT solutions will also consume greater industry e$ort.

With Asia Paciﬁc forecast to lead growth in the global ICT sector with a compound annual growth rate of 9.5 per cent through to 2013, Victoria is also well-placed to continue to build international linkages with growing markets such as India and China as well as emerging areas in South-East Asia.14 At the same time, these economies will represent growing competition to local companies, requiring them to continue to remain focussed on being globally competitive.

13 Concept Economics, Economic Impacts of the National Broadband Network, November 2008

14 World Information Technology and Services Alliance, Digital Planet 2010 (draft), May 2010 PAGE 12 VICTORIAN ICT ACTION PLAN

Continuing development of local ICT capabilities will add to Victoria’s overall ability to adopt ICT and drive innovation across the economy. Underpinning the successful adoption of ICT will be a continued emphasis on a highly skilled but ﬂexible workforce that can quickly adapt to changing needs. Against the rapid pace of change and with forecast skills shortages, ensuring business can access high quality ICT skills will be critical to the realisation of economy-wide beneﬁts. GOVERNMENT INVESTMENT OVER THE PAST FIVE YEARS PAGE 14 VICTORIAN ICT ACTION PLAN

GOVERNMENT INVESTMENT OVER THE PAST FIVE YEARS

OVER THE PAST DECADE THE VICTORIAN GOVERNMENT HAS MADE SIGNIFICANT INVESTMENTS TO FUTURE GROWTH OF THE ICT INDUSTRY AND ICT!INTENSIVE SECTORS.

In 2005, the Victorian Government released the ICT Industry Plan 2005-2010 and the Broadband Framework, which articulated its vision for the ICT industry and broadband infrastructure in the state’s economic development.

Over the past ﬁve years, the government has successfully implemented the strategies and initiatives outlined in both documents and these investments have provided a solid foundation for a continuing strong role for ICT in Victoria.

PAGE 15 VICTORIAN ICT ACTION PLAN

FIVE"YEAR HIGHLIGHTS

i More than 1,200 trade fair and mission grants awarded, with projected exports of over $1.2 billion since July 2005.

i Since mid-2005, direct facilitation by government of investments resulting in an additional 5,973 jobs, and $962 million in capital expenditure.

i Major investments into Victoria by NBN Co, IBM, Computershare, Infosys, Fujitsu (Atos), Hewlett Packard, Huawei, CSC, Wipro and Vertex.

i Sixteen industry networks and clusters supported since 2005 through the ICT Linkages Program, the most recent being the Victorian eHealth Network, Geelong ICT cluster and the GreenIT cluster.

i Implementation of new ICT procurement policies allowing contractors to retain the intellectual property developed for the Victorian Government.

i More than 2,000 ICT projects and $150 million worth of business managed through the eServices Panel since 2007, with around 70 per cent of contract value paid to Victorian companies.

i Signiﬁcant investments in research and development, including the establishment of research centres such as IBES, the Ericsson Asia-Paciﬁc TV Centre, and the joint University of Melbourne and Alcatel Lucent Bell Labs’ Centre for Energy-E#cient Telecommunications.

i Provided funding to the NICTA VRL bringing total funding support to 2010–11 to $28 million.

i Investments in eResearch infrastructure and capabilities including the $100 million Victorian Life Sciences Computation Initiative—the world’s largest supercomputer dedicated to life sciences.

i Twelve faculties across Victoria’s nine universities participated in the Industry and University Collaboration Pilot Program, strengthening links between universities and industry partners.

i Thirteen Victorian TAFE institutes participated in the TAFE ICT IBL Pilot Program, supporting industry-based learning for students.

i Implemented a nationally-endorsed ICT careers awareness campaign, ICT: Start Here. Go Anywhere improving perceptions of ICT as a study and career choice for young people.

i Implemented a $1.85 million ICT Skills Package, addressing issues and barriers to the supply of people into the ICT workforce.

i Invested $44 million through the Broadband Innovation Fund for projects designed to encourage innovative use of broadband in government service delivery.

i Granted $5 million in total for 22 projects under the collaborative Internet Innovation Fund to apply ICT- enabled innovation to environmental, sustainability, health, education, food technology and resource management challenges.

Additional achievements were reported in the Victorian Government ICT Industry Plan 2005-2010 Progress Report released in February 2009, available on www.mmv.vic.gov.au PAGE 16 VICTORIAN ICT ACTION PLAN

ICT INDUSTRY PLAN TARGETS

In 2001, the Victorian Government established a series of short, medium and long-term (10 year) targets1. Working closely with the industry, the Victorian Government has successfully achieved or exceeded all targets.

Short term targets

Each year, the Victorian Government directly From July 2005 to September 2010, the Victorian facilitates: Government directly facilitated:

i more than 800 new ICT jobs i 5,973 ICT jobs (an average of 1,195 jobs per year)

i ICT investment in the state worth more i $962 million in capital expenditure (an average of than $150 million $187 million per year)

i ICT exports valued at $150 million. i over $1.2 billion in ICT exports (an average of $245 million per year).

Medium term targets

The Victorian Victoria is home to 16 ‘clusters of excellence’, many of which specialise in emerging Government areas of technology before mainstream adoption including: is successfully i Mobility Vic (launched 2007) targeting emerging clusters i Spatial Victoria (launched 2007) of excellence i Geelong ICT Cluster (launched 2008)

i eHealth (launched 2010)

i GreenIT (launched 2010).2

The Victorian Victorian ICT ﬁrms are internationally recognised as providers of ICT solutions to key ICT industry is industries. Highlights include: recognised as a i Sissit Group, a mobile technology and integrated systems provider, has been selected supplier of goods by some of India’s biggest domestic airlines to trial its mobile phone check-in and services to key technology at two of India’s largest airports global industries i Enex TestLab, an independent provider of testing services, was one of the ﬁrst dedicated Windows 7 test laboratories endorsed by Microsoft to assist developers to save time as they prepared for the upcoming launch of Windows 7

i games developer Firemint won two 2010 Apple Design Awards—a best iPhone app award for FlightControl HD and a best iPhone app award for Real Racing. It also received four Pocket Gamer Awards including best iPhone developer and iPhone game of the year at the Game Developers’ Conference 2010 in San Francisco. The company has achieved more than two million sales since the release of its highly popular Flight Control game for iPhone and iPod Touch in March 2009, making it one of the App Store’s biggest success stories to date.

1 More detail on the 10 year targets is provided on page 4 of the Victorian Goverment ICT Industry Plan 2005–2010

2 A full list of Victorian ICT clusters is available at www.mmv.vic.gov.au/industryclusters PAGE 17 VICTORIAN ICT ACTION PLAN

Victorian Over the past decade, the Victorian ICT industry has become ﬁrmly integrated into the investment global market, with: and export i more than 65 per cent of all Victorian ICT companies export today compared with performance 58 per cent in 2006 reﬂect the increased i export revenue accounts for 12 per cent of annual revenues compared with seven per integration of cent in 2006 ICT product into i Victoria is home to major Australian ICT companies including Aconex, MelbourneIT, global supply Telstra and Computershare chains i major multinational ICT companies in Victoria include NEC, Hewlett Packard, Alcatel- Lucent, IBM, PacNet, Fineos, Ericsson, Infosys, NetApp and Vertex.

Long term targets

The value of Victorian exports are consistently valued at more than $1.5 billion each year. In March Victorian ICT 2010, annual revenue from overseas operations and exports of ICT products and services exports is more of Victorian headquartered ICT companies was estimated to be more than $2.9 billion. than $1.5 billion each year

Signiﬁcant The Victorian ICT industry has continued to grow over the period and there have been a increases in number of successful Victorian ICT start-ups including: the number i Inference Communications – born out of the Melbourne Business School and Telstra and success of Research Laboratories in 2005–06, now with an international reputation in speech Victorian start- recognition up companies and Victoria i Business Intelligence Technologies – founded in 2002 at LaTrobe University’s recognised as a Technology Enterprise Centre, recently signed a multimillion dollar contract to global centre of implement one of the world’s largest web-based project management and monitoring ICT innovation systems for a major Indian city council (Bruhat Bengaluru Mahanagara Palike)

i SEEK, CarSales and REA Group that have shown innovative and entrepreneurial aptitude to dominate niches in the online classiﬁeds sector.

i spin-o$ companies and other commercialisation opportunities through NICTA VRL since 2004.

Victoria is increasingly recognised as a global centre for ICT innovation. Highlights include:

i signiﬁcant private sector investment in ICT research in Victoria by Ericsson and Alcatel Lucent’s Bell Labs

i two Victorian consortia awarded $50 million from the Australian Government for development of a bionic eye

i joint Victorian Government and the University of Melbourne $100 million Victorian Life Sciences Computation Initiative to enhance Victoria’s internationally recognised life sciences and biomedical research capabilities

i international Green Touch initiative launched in 2010, with IBES joining Massachusetts Institute of Technology and Stanford University as a founding academic partner. PAGE 18 VICTORIAN ICT ACTION PLAN

The importance The Victorian ICT industry is a significant part of the Victorian economy: of the ICT i employing around 87,000 workers industry trade and employment to the i generating annual revenues of approximately $27 billion Victorian economy i representing around four per cent of Victoria’s gross value add in 2008–09.3 surpassing global benchmarks With Australia ranked seventh on global ICT industry competitiveness and first in the Asia Pacific4, Victoria accounts for:

i 27 per cent share of total Australian ICT industry employment

i almost 28 per cent of national higher education ICT research5

i the highest proportion of higher education students, with 35 per cent of undergraduate and 40 per cent of postgraduate enrolments nationally.6

Melbourne has been ranked as the cheapest overall location for business in the Asia Paciﬁc region, ahead of Adelaide, Brisbane, Sydney, Osaka and Tokyo. Recently, Melbourne was also ranked as the second most innovative city in the Asia Paciﬁc, behind Hong Kong.7 Melbourne stood out in electronic systems development and testing industries at 20 per cent cheaper to operate a business than the US.8

3 ABS. Australian National Accounts: State Accounts, Catalogue No. 5220.0, 2008-09 (Re-issue), Table 3: Expenditure, Income and Industry Components of Gross State Product, Victoria, Chain volume measures and current prices. Estimate based on ‘information, media and telecommunications’ ANZSIC 2006 industry classiﬁcation

4 Economist Intelligence Unit, Resilience Amid Turmoil: Benchmarking IT Industry Competitiveness 2009, September 2009, pp. 4 and 26

5 ABS, Research and Experimental Development, Higher Education Organisations, Australia, Catalogue No. 8111.0, 2008

6 DEEWR, Selected Higher Education Statistics, Commonwealth of Australia, 2008

7 2thinknow, Innovation Cities Asia Index 2010, September 2010

8 KPMG, Competitive Alternatives Report 2010, www.competitivealternatives.com/default.aspx, 2010 THE VICTORIAN ICT ACTION PLAN PAGE 20 VICTORIAN ICT ACTION PLAN

THE VICTORIAN ICT ACTION PLAN

Victoria’s ICT capabilities provide a strong foundation to capture future economic and social beneﬁts for the state.

To take full advantage of these capabilities, the state will need to focus on activities that accelerate the innovative use and application of ICT across the economy. This approach recognises that the biggest beneﬁts accrue to those economies best able to exploit new technologies earlier and in more innovative ways.

While recognising the leading role the ICT industry and other sectors must play in driving this uptake, the Victorian Government can play a strong supporting role. Through its own operations and activities, the Victorian Government can demonstrate innovative, leading use of ICT and help drive the development of new ICT services and applications. The government can also play an important role in ensuring the foundations for ICT use—such as a high quality skilled workforce and world class broadband infrastructure—are in place in Victoria.

The Victorian ICT Action Plan reﬂects and responds to changes over the past ﬁve years and continues the Victorian Government’s commitment to support the growth of the ICT industry and the application of ICT across the economy. It continues Victoria’s leadership in ICT policy and programs and will ensure ICT continues to play a key role in the development of a prosperous, sustainable and liveable Victoria.

FIGURE 1: ICT FRAMEWORK

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i n i v i t c u Research and d education ro p sectors d se ea cr n i s lem ob g pr solving bi PAGE 21 VICTORIAN ICT ACTION PLAN

Under the Victorian ICT Action Plan, the Victorian Government has identiﬁed six actions to guide its support:

Action 1 – Support the development of industry capability and expertise

Action 2 – Increase the global proﬁle of the Victorian ICT industry

Action 3 – Establish Victoria as the Australian centre for ICT-enabled R&D

Action 4 – Use ICT to foster innovation

Action 5 – Ensure Victoria has the skills to enable innovative use of ICT

Action 6 – Establish Victoria as the most extensive and productive broadband economy in Australia

The plan provides more than $110 million for targeted activities against the six action areas to accelerate innovative use and application of ICT across the economy.

The Victorian ICT Action Plan is consistent with the strategic objectives identiﬁed in Growing Victoria Together and more recently articulated in Victoria: Innovation State (2010), Innovation: Victoria’s Future (2008) and Building our Industries for the Future: Action Plans for Victorian Industry and Manufacturing (2008). It will also complement activities aimed at addressing issues related to community uptake of ICT and general government ICT use and procurement. PAGE 22 VICTORIAN ICT ACTION PLAN

The Victorian Government has identiﬁed a number of key performance indicators (KPIs) to monitor its progress against the actions in the plan. These targets are ambitious and will require a joint commitment by industry, the research community and government to achieve.

Victorian ICT Action Plan Measuring success

Increase in KPI 1: Victoria has the deepest NBN ﬁbre roll out of any state ICT-enabled KPI 2: More than one million Victorian households and businesses taking a innovation and broadband service over the NBN by 2015 productivity in Victoria KPI 3: Two globally signiﬁcant challenges addressed by local ICT-enabled solutions by 2015

KPI 4: Five new international research partnerships or projects established by 2015

KPI 5: Victorian expenditure on ICT R&D is the highest in Australia, as a percentage of GSP

Increase in KPI 1: V alue of ICT industry revenue generated from exports and overseas international operations accounts for 15 per cent of total Victorian ICT industry revenue competitiveness by 2015 of the Victorian KPI 2: V alue of exports facilitated by Victorian Government activities more than ICT industry $150 million per annum

KPI 3: V alue of ICT investment facilitated by Victorian Government activities worth more than $150 million per annum

KPI 4: More than 800 new ICT industry jobs facilitated by the Victorian Government per annum

Increase in KPI 1: I C T workers employed in other sectors across the economy account for Victoria’s skills more than ﬁve per cent of the total Victorian workforce base KPI 2: V ictoria maintains the largest share of higher education ICT students (graduates and postgraduates) in Australia BUILDING LOCAL CAPABILITY AND EXPERTISE PAGE 24 VICTORIAN ICT ACTION PLAN

BUILDING LOCAL CAPABILITY AND EXPERTISE

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

As Victoria’s businesses and the economy develops, it becomes more di#cult to operate e$ectively without ICT. ICT capabilities have become so entrenched in many organisations that it is often unclear whether a company belongs in the ICT industry or in another industry.

The e$ective use of ICT can improve existing business operations such as through providing better information, more e#cient use of resources or improved engagement with suppliers and customers. It can also underpin innovation in product development, services and processes, or open up access to global markets and new supply chains. For this reason, ICT is often the key to ﬁnding and maintaining a competitive advantage over other businesses.

ICT continues to be the catalyst for major industry disruption by challenging traditional systems and structures and supporting more compelling models. The entertainment and publishing industries are facing profound market changes as digital and online business models attract more customers. Cloud computing is forcing adjustments in the business models around software purchasing, and the prospect of ubiquitous high-speed broadband is also likely to foster a new wave of applications and services in a range of industries.

While the pace of technological change is a challenge for some industries, it presents opportunities for others. In a supportive economic and competitive environment, businesses and entrepreneurs can quickly exploit emerging markets.

The ICT industry is at the centre of this activity. Local ICT capabilities, products and services are critical to the exploitation and innovative use of ICT across the economy. To successfully meet customer needs, ICT companies need to develop a deep appreciation of the issues facing customers and how ICT can be applied to address these issues and deliver value.

Local ICT companies are best-placed to deliver products and services tailored to the domestic market, either by developing home-grown products or modifying overseas products to local conditions. In this way, future growth of the ICT industry will be increasingly integrated with the growth of Victorian industry sectors that are key users of ICT. PAGE 25 VICTORIAN ICT ACTION PLAN

BACKPAGELEAD TAKES SPORTS JOURNALISM TO A NEW LEVEL

An explosion in the development and use of online and social media over the last ﬁve years is disrupting the way journalism and the media has traditionally operated.

Creating a proﬁtable online news service is a challenge in a constantly evolving online environment where consumers expect the most up-to-date news and usually do not want to pay for it.

Launched in March 2010, BackPageLead (www.backpagelead.com.au) is a sports news website set up by Victorian journalists to report on local and international stories as they unfold. The site provides commentary and analysis about sports events within hours of stories unfolding.

BackPageLead has a stable of around 20 experienced Melbourne and Sydney-based journalists and a UK- based editor working overnight to deliver up-to-the-minute sports news.

BackPageLead’s readers are accessing online articles, podcasts, forums and A-League fan blogs, with plans to extend services to video podcasts.

While the services and content provided by BackPageLead could be located anywhere, the support provided from local organisations and people in the development and launch of the business is testament to the growing depth of digital media capability and talent available in Victoria.

ROLE OF GOVERNMENT

Victoria has a strong record of technology adoption and an increasing number of industry sectors have become sophisticated users of ICT.

Government has a key role in creating a supportive and stable economic environment for business growth. Government can also help address shortcomings in the commercialisation system, particularly to help technology companies access ﬁnance for early stage development. The government can also help companies address issues relating to scale and access to resources, information and markets. It is uniquely placed to work with industry players to broker collaboration, which includes establishing relationships with international organisations, large companies and the research and education sectors, to facilitate knowledge sharing and the development of new capabilities. Importantly, government can also assist the local industries to build their proﬁle and raise awareness of their capability in other sectors, locally and overseas.

Finally, the government can play a role in raising awareness of ICT trends or solutions which may present new business opportunities or beneﬁts to Victoria. For example, the Victorian Government has worked closely with industry associations over the past couple of years to develop Victoria’s sustainable ICT capabilities to ensure Victorian ICT companies are positioned to beneﬁt from growth in global demand for greener ICT services. Similarly, it has supported the establishment of an internet protocol version six (IPv6) testbed for Victorian companies to gain direct experience in the growing IPv6 internet address scheme. PAGE 26 VICTORIAN ICT ACTION PLAN

BUILDING AN ENVIRONMENTALLY SUSTAINABLE INDUSTRY

Recognising the impact of ICT on the environment, the Victorian ICT industry has been working closely with government and other business sectors to help businesses and consumers act more sustainably.

Established in 2007, the Byteback eWaste program has collected more than 2,000 tonnes of computer and related equipment at eight collection sites across Victoria – reducing the electronic waste that would otherwise have ended up as landﬁll. The program has quickly become the national standard for computer equipment recycling and is being extended across Australia.

In response to industry demand for information about sustainable ICT practices, the AIIA, supported by the Victorian Government, published an eBook, Greening Your Business Through Technology. The eBook contains case studies and step-by-step guides on how to implement new technologies and business practices such as video conferencing and teleworking to reduce energy consumption.

With more than 30,000 downloads in eight months, the eBook is helping Victorian businesses to reduce their carbon footprint and manage costs through more sustainable practices and technologies.

These initiatives, combined with the recently launched GreenIT cluster, demonstrate that the local ICT industry is playing an active role to help address one of the major challenges facing Victoria and Australia, while working to develop new capabilities that will underpin future growth of the industry.

“The technology industry is uniquely positioned to improve environmental performance across the economy and these initiatives demonstrate some of the many ways the Victorian ICT sector is leading the development of environmentally sustainable practices at every level.”

Ian Birks, Chief Executive O#cer, AIIA PAGE 27 VICTORIAN ICT ACTION PLAN

ACTION 1 ! SUPPORT THE DEVELOPMENT OF INDUSTRY CAPABILITY AND EXPERTISE

THE VICTORIAN GOVERNMENT HAS PROVIDED SIGNIFICANT SUPPORT TO THE LOCAL ICT INDUSTRY OVER THE PAST 10 YEARS AND WILL CONTINUE TO SUPPORT THE DEVELOPMENT OF LOCAL CAPABILITIES AND EXPERTISE.

1.1 Supporting commercialisation and access to ﬁnance

The Victorian Government will continue to assist the development of globally competitive businesses by building commercialisation skills and capabilities, facilitating access to ﬁnance and boosting the adoption of technology. i Deliver the $8 million Smart SMEs Innovation Commercialisation Program which includes:

— the Regional Technology Commercialisation Program (through partner Pyksis Victoria) which assists regional companies to take their products to national and international markets, through the development of business cases and assistance in obtaining funding

— up to ﬁve new program partners who will be appointed to provide a cohesive suite of commercialisation support services to help facilitate global connections and secure investment, including leveraging Commercialisation Australia funds.

1.2 Working collaboratively together

The Victorian Government will continue to support a range of activities to encourage greater collaboration and further develop local capabilities. i Invest almost $700,000 with the AIIA over two years toward a range of business development forums and activities including the highly successful CollabIT program building relationships between SMEs. i Invest $550,000 with the Australian Interactive Media Industry Association (AIMIA) to hold business development forums and foster talent in mobile technologies. i Work collaboratively with the Games Developers Association of Australia to attend international events such as the annual Games Developers’ Conference in San Francisco and other networking and collaborative forums. i Continue to support a range of ICT clusters through the ICT Linkages Program, with a particular focus on supporting areas of emerging expertise. i Continue to support high-proﬁle awards in Victoria to promote excellence in, and raise the proﬁle of, the Victorian ICT industry, including supporting the AIIA’s Victorian and national iAwards until 2013. PAGE 28 VICTORIAN ICT ACTION PLAN

1.3 Developing emerging capabilities

The Victorian Government will work with local businesses and industries to identify and develop capabilities in new areas.

i Commit up to $4.1 million over the next four years to implement an Online Media and Digital Publishing Strategy which will include:

— demonstrating successful digital publishing and journalism business models

— supporting the development of new businesses and applications that allow the gathering and distribution of digital content

— fostering Victoria’s national media voice by growing capabilities in online journalism and digital publishing.

i Allocate $2 million to 2012 to continue the government’s successful digital media programs, which encourage the development of digital media, console and online games.

i Undertake a digital media scoping study which will investigate the best market opportunities for local games, digital content and media companies likely to emerge over the next ﬁve years.

i Support the establishment of YouCommNews by Swinburne University of Technology’s Foundation for Public Interest Journalism.

i Support the development of The Conversation, a new online interface between industry researchers that will facilitate better sharing and use of academic research. BUILDING VICTORIA’S GLOBAL PROFILE PAGE 30 VICTORIAN ICT ACTION PLAN

BUILDING VICTORIA’S GLOBAL PROFILE

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

With a small domestic market and an open international marketplace, local ICT businesses must proactively develop their global credentials. Greater exposure to overseas competition and the global marketplace will equip the local ICT industry to perform better.

Over the past ﬁve years, Victorian ICT companies have continued to develop strong linkages with global markets. Today, Victorian revenue from exports and overseas operations is valued at more than $2.9 billion and almost two-thirds of companies undertake some form of export activity.

International companies also play an important role in the development of the local ICT industry and the broader economy by providing access to global supply chains, providing opportunities for local companies to work on major international contracts, and developing understanding of foreign markets.

Victoria has many drawcards for attracting foreign direct investment. It has talented people and high quality businesses, good infrastructure, a stable economic environment and a cosmopolitan lifestyle. It is in the same time zone as most of the Asia Paciﬁc and works overnight for Europe and North America.

Investment results conﬁrm this. Between 2003 and 2008 Victoria accounted for almost a third of Australian-based foreign direct investment projects.1 Over the same period, ICT was the top-ranking sector for investment attraction in Victoria, accounting for 27 per cent of all investment attraction projects into the state.

Today, Victoria is the Australian headquarters for a wide range of major ICT multinationals including Hewlett Packard, Fineos, Alcatel-Lucent, Vertex, NEC, Infosys and Agilent. The announcement in July 2010 that the NBN Co’s National Operations Centre and Test Facility would be located in Melbourne is further testament to Victoria’s ICT credentials.

Despite its strengths, Victoria will face increasing competition from both interstate and global competitors in attracting ICT investment. Research conducted in 2009 by Invest Victoria indicates cost containment and consolidation of global operations are strong priorities for large multinational corporations, reﬂecting sluggish global economic conditions.

It is a good time for Victoria to be building closer trade relations with fast-growing ICT economies such as India and China and across Asia. The ASEAN-Australia-New Zealand Free Trade Agreement started in January 2010 and is expected to signiﬁcantly increase Australia’s access into the ASEAN region through reduced tari$s and barriers. Asia Paciﬁc’s share of the global ICT market is also expected to rise from 28.8 per cent in 2009 to 31.1 per cent in 2013.2

1 IBM-Plant Location International, Global Investment Location Database, 2009

2 World Information Technology and Services Alliance, Digital Planet 2010 (draft), May 2010 PAGE 31 VICTORIAN ICT ACTION PLAN

Victoria hosts signiﬁcant Indian ICT companies, including Wipro, iGate and Infosys, and many Victorian companies have found export markets in India, such as SENKO Advanced Components Australia for ﬁbre-to-the-home products and Attra for software. India is a market with large growth potential through urbanisation, development and growing ICT literacy.

Over the past couple of years, a number of Chinese ICT companies have also made signiﬁcant investments in Victoria including Huawei and ZTE.

Historically-favoured markets such as the US, UK and Europe remain important, and the newer markets will bring fresh opportunities for export and as sources of foreign investment.

SMARTTRANS TAKES CHINA BY STORM

Established in Melbourne in 2000, SmartTrans has become a global leader in intelligent transport systems (ITS), o$ering mobile ITS solutions to a range of industries.

SmartTrans has a strong foothold in China, first moving into the market in 2007 after winning bids to deliver its services to VIP guests and corporate sponsors at the 2008 Beijing Olympics. Its SmartTrans EventTrack product, developed specifically for the Beijing Olympics, enables organisations to track and monitor products, services and people in real-time, leading to significant cost and time savings.

In 2010, SmartTrans signed a memorandum of understanding with China Mobile, the world’s largest mobile phone operator. Having built relationships with China Mobile since 2007, the company is working with China Mobile to have its Application Management Platform installed into the company’s new mobile phones. Its sophisticated software management system provides a management tool for the distribution of applications and other digital content including games, animation, music and other multimedia. More than 508 million China Mobile customers will also be able to download SmartTrans’s new mobile phone platform directly onto their existing phones.

The SmartTrans head o#ce and research and development facilities are based in Melbourne, with o#ces in Beijing, Sydney and Perth.

ROLE OF GOVERNMENT

Local ICT companies face significant barriers to exporting including physical distance from major markets, fluctuating global demand, depressed global economic conditions, and limited access to market information, finance and insurance.

Over the past decade, the Victorian Government has provided signiﬁcant support to assist the local ICT industry in its e$orts to build its global proﬁle, establish international linkages and improve its competitiveness. Much of this support can be provided from Victoria but the government also has business o#ces in overseas locations, such as Bangalore, Shanghai and San Francisco, among others, that actively support Victorian exporters. PAGE 32 VICTORIAN ICT ACTION PLAN

These o#ces provide on-the-ground resources and intelligence to assist exporters to enter foreign markets, ensure access to international market intelligence, and identify and make connections with businesses. This role is particularly important in newer markets, such as South-East Asia, where business and regulatory environments are di$erent. The Victorian Government Business O#ces (VGBOs) are also active in promoting Victorian industries to foreign governments and businesses.

Foreign companies are an important part of the competitive mix in the state, providing a direct link to other markets, and bringing skills and knowledge that are otherwise di#cult to acquire. Victoria is physically remote from major ICT markets and therefore needs active promotion as a high quality location for investment.

Our strengths in skills, advanced infrastructure and research capabilities, combined with Victoria’s high quality of life, are critical attributes for attracting foreign investment. The Victorian Government will continue to promote Victoria as a destination of choice and pursue investments of strategic importance to the local industry and the Victorian economy.

“AIMIA would like to commend the government for their continued support of the digital content industries in Victoria, helping to build a diverse and resilient globally-focused industry.” Simon Goodrich, President, AIMIA

FIRELIGHT DOMINATES GLOBAL GAMES AUDIO

From a sole enterprise in 2002, Firelight Technologies has become a major player in the global computer game industry with its complete audio engine FMOD now running in more than 30 per cent of all major games worldwide.

FMOD is used to create and playback interactive audio, from 3D sound to interactive music. It features in world-leading games including Guitar Hero, Dragon Age, Alan Wake, Bioshock 2, Starcraft 2, Sim City iPad and World of Warcraft as well as in more than 200 iPhone projects.

Firelight also provides solutions for other industries with demand for audio tools, from eLearning providers and NASA research projects to polling booths used in the 2008 US presidential election.

“Victoria’s skilled local workforce, shared time zone with Asia and supportive state government are key contributors to our global success. Having access to highly skilled and creative graduates is one of the great advantages of being based in Melbourne.”

–Brett Paterson, Founder and CEO, Firelight Technologies PAGE 33 VICTORIAN ICT ACTION PLAN

ACTION 2 ! INCREASE THE GLOBAL PROFILE OF THE VICTORIAN ICT INDUSTRY

WHILE CONTINUING TO FOCUS ON TRADITIONAL MARKETS IN THE US, UK AND EUROPE, THE VICTORIAN GOVERNMENT WILL WORK WITH INDUSTRY TO GAIN ACCESS TO NEW, HIGH GROWTH AND EMERGING MARKETS FOR VICTORIAN ICT EXPORTERS.

2.1 Addressing barriers to export The Victorian Government will implement a range of export market initiatives for the benefit of local ICT companies including export assistance outlined in its export strategy. i Extend the ICT Trade Events and Exports Assistance Program to assist export-ready companies to attend recognised overseas trade fairs and missions. Worth $1 million per year, the initiative allows Victorian companies to scout export destinations for their goods and services. i Continue to support the AIIA to deliver the ICT Exporters Club for local ICT companies to meet and network at events designed to inform them about overseas exporting opportunities and skills needed to export. i Lead overseas trade fairs and missions and work with inward trade delegations. These initiatives enable Victorian ICT businesses to establish or foster business relationships with overseas companies. i Establish a Super Trade Mission to India in 2011-12 for key sectors including ICT. i Implement a Currency Export Program to help Victorian exporters manage a volatile Australian dollar. This package will include training and the provision of information on managing exchange rate fluctuations and trade finance products. i Provide support to Victorian companies wishing to expand into international markets through the Access Program including short-term access to o#ce facilities and export-related assistance. i Continue to use on-the-ground sta$ in the VGBOs to facilitate international business opportunities and investigate prospects for inward investment. Recognising the opportunities and need for on-the- ground support, the government has recently established new VGBOs in China and Malaysia. PAGE 34 VICTORIAN ICT ACTION PLAN

2.2 Raising Victoria’s ICT capability and investment proﬁle

The Victorian Government will work with the Australian Government and industry to raise the proﬁle of Victoria and Australia’s ICT capability and investment in key and emerging markets.

i Maintain an active investment attraction unit to identify the most compelling investment propositions for the state.

i Continue to be an active participant in the national Committee for Marketing ICT Australia.

i Work with the AIIA to establish o#ce facilities for visiting World Information Technology and Services Alliance member companies doing business in Victoria.

i Encourage Victorian ICT companies to participate in the annual Governor of Victoria Export Awards. The annual awards showcase Victoria’s most successful and innovative exporters and are an opportunity for exporters to raise awareness of their company, products or services. Victorian winners are eligible to enter the Australian Government’s Export Awards.

i Explore new online promotion opportunities with industry associations.

i Leverage the strong proﬁle built during the Shanghai World Expo in 2010 to further assist companies to engage with China. TRANSFORMING RESEARCH AND DEVELOPMENT PAGE 36 VICTORIAN ICT ACTION PLAN

TRANSFORMING RESEARCH AND DEVELOPMENT

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

R&D has always been closely linked with innovation. For knowledge-based economies, such as Victoria, R&D and innovation are crucial ingredients to generating jobs, investment and wealth. Unlike the more resource-intensive Australian states, Victoria’s future relies ﬁrmly on the ability to develop and apply knowledge.

Research in ICT remains an important, high-value activity for the state, but it is the partnership of ICT R&D with other ﬁelds of research that is increasingly delivering the most valuable advances in knowledge. Already many of the most sophisticated research ﬁelds would be unable to develop new knowledge without access to ICT. Life sciences and nanotechnology are now reliant on dedicated ICT infrastructure and expertise.

ICT is contributing to Victoria’s overall R&D performance by adding critical new capability and enabling greater collaboration.

ICT capability is fundamental to the management and analysis of huge volumes of data that are now being generated. Research methods involving microarrays, sensor networks, medical imaging, pixel detectors on synchrotron beam lines, radio telescopes and bioinformatics are just some of the example methods that are producing amounts of data which were inconceivable even 10 years ago. World-leading projects being undertaken in Victoria, such as development of the bionic eye, would be impossible without the complementary capabilities provided through ICT.

The increasing emphasis on collaborative research, involving dispersed, multidisciplinary participants, is another reason why ICT infrastructure and expertise has become so fundamental to Victoria’s research e$orts. Major challenges in the natural environment, human health, national security, cultural preservation, and producing safe and reliable food and water resources are too large and complex to be addressed by individuals, groups, departments or even institutions in isolation. These players are looking for better ways to combine resources and work together to understand, address and solve these problems.

eResearch is a globally recognised strategy that is empowering groups of people with di$erent skills, and often from di$erent disciplines, to work together and manage growing volumes of data. There is also increasing need for supercomputers for the analysis of large and complex data sources, advanced gigabit networks to enhance access to scientiﬁc infrastructure such as synchrotrons, research reactors, telescopes and sensor networks, and high deﬁnition videoconferencing to collaborate across organisations and globally.

Continuing to build this R&D capability in Victoria is important for a whole range of reasons. It is not good enough just to rely on knowledge produced overseas. A high quality local R&D capability enhances PAGE 37 VICTORIAN ICT ACTION PLAN

our ability to understand and apply innovative ideas from anywhere in the world.3 It provides an e$ective method for new knowledge to be dispersed throughout the economy and to improve the capability to apply it to unique Victorian circumstances and challenges.

WORLD!FIRST BIONIC EYE IN SIGHT

Victorian-based ICT researchers are leading the way in the development of new solutions to major health problems with two consortia awarded funding by the Australian Government in 2009 to develop the technologies to restore sight. The Australian Government’s funding of $42 million and $8 million respectively toward the Bionic Vision Australia (BVA) and Monash V1sion projects adds to the high-proﬁle status of Victoria’s research sector.

The Monash V1sion Project is a collaboration between Monash University, the Alfred Hospital, MiniFAB (Aust) Pty Ltd and Grey Innovation Pty Ltd. This research has the potential to restore vision to more than 80 per cent of Australia’s clinically blind or partially blind population – around 320,000 Australians. The ﬁrst human trial is due to conclude in 2014.

BVA’s research partnership is focussed on restoring vision to patients with retinal disease. BVA comprises the University of Melbourne, the University of New South Wales, the Bionic Ear Institute, the Centre for Eye Research Australia and NICTA. With more than 50,000 Australians visually impaired due to retinal disease, the BVA project is focussed on developing a retinal implant to restore their vision and will use gigabit wireless technology developed by NICTA VRL to directly stimulate the retina. The ﬁrst human retinal implant is expected to be ready in 2013.

Together, these world-leading research collaborations have the potential to improve the health and quality of life of many in Australia and overseas.

ROLE OF GOVERNMENT

Nationally, Victoria has always performed well in ICT R&D. It has maintained a strong history in telecommunications research and, more recently, in eSecurity and life sciences.

Victoria has the largest number of ICT graduates and postgraduates in Australia, and many pursue research careers in Victorian universities, research institutions or the private sector. There are 10,000 researchers employed in the Parkville precinct, making it one of the most research-intensive locations in the world.

By international standards, the overall level of local R&D undertaken in Australia remains low.4 Governments need to play a role in creating a supportive and stable environment for investment in R&D and can help stimulate activities where they would not otherwise occur.

An ongoing government commitment to funding R&D can help to even out some of the ﬂuctuations in investment and economic cycles that tend to have a marked impact on private R&D intensity. Government involvement is also important where the beneﬁts of R&D are spread broadly or fall to the public good, rather than providing a return on investment to private hands. The Productivity Commission

3 Cutler & Company Pty Ltd, Venturous Australia: Building Strength in Innovation, 2008, p. 41

4 The Australian Government’s Australian Innovation System Report 2010, 2010, provides an overview of Australia’s innovation performance, including all levels of R&D, against international benchmarks PAGE 38 VICTORIAN ICT ACTION PLAN

found “the need for government to fund research to discharge its own functions and the existence of beneﬁts from innovative activity that cannot be captured by the innovator provide strong rationales for the provision of public funding support for science and innovation”.5

Governments also play a valuable role where research infrastructure costs are too high to be met solely by private investment. The Australian Synchrotron and sophisticated ICT research infrastructure, such as that required for supercomputing, are examples where the Victorian Government has established major shared facilities that beneﬁt many researchers and add signiﬁcantly to Victoria’s international research credentials and capabilities.

The Victorian Government’s 2008 innovation statement, Innovation: Victoria’s Future, provided more than $120 million funding to ICT-related initiatives, including broadband and supercomputing infrastructure, programs to stimulate demand-led R&D, and funding to support the transformative use of next generation ICT. These investments are complementary to major infrastructure investments and support provided by the Australian Government including incentives for private investment in R&D and support for the development of skills.

ERESEARCH BRINGS RESEARCHERS CLOSER TO CURING PROSTATE CANCER

Prostate cancer is the second most common form of cancer in men, with around 50 per cent of Australian men experiencing prostate problems during their lifetime. With help from eResearch tools, researchers at Monash University are developing better diagnosis and treatments for prostate cancer and benign prostate disease.

In response to researchers’ need to share uro-oncology research data securely between di$erent research organisations, the VeRSI has developed the UroShare web application. UroShare allows researchers to store di$erent types of data, such as patient, laboratory and clinical data and pre-surgical, intra-operative and postsurgical notes, in a centrally accessible database.

With the implementation of the pilot in 2010, aggregated, anonymised prostate specimen and clinical information can be accessed by researchers across a range of institutes. Researchers can check whether tissue is available at the collective tissue bank before applying for a sample—which saves time and cuts costs.

VeRSI’s UroShare program is an excellent example of how eResearch platforms are helping to create better practices and outcomes in health.

5 Productivity Comission, Public Support for Science and Innovation, Research Report, Productivity Comission, Finding 3.1 2007, p. xxxvi PAGE 39 VICTORIAN ICT ACTION PLAN

ACTION 3 " ESTABLISH VICTORIA AS THE AUSTRALIAN CENTRE FOR ICT"ENABLED R&D

THE VICTORIAN GOVERNMENT WILL CONTINUE TO SUPPORT THE ESTABLISHMENT OF VICTORIA AS THE AUSTRALIAN CENTRE FOR ICT AND ICT!ENABLED R&D.

3.1 National ICT Australia – Victoria Research Laboratory

The Victorian Government has provided $28 million funding to NICTA VRL since 2004. Independent analysis estimates a return on this investment to Victoria over the period 2004-34 of $82.6 million (expected beneﬁt, in net present value terms), representing a beneﬁt-cost ratio of 4.36 (or rate of return of 336 per cent).

The Victorian Government will invest up to $33 million in additional funding for NICTA VRL through to 2014–15. With this commitment, the government will leverage close to $100 million for VRL from the Australian Government, Victorian universities and the private sector.

The Victorian Government’s ongoing commitment to NICTA VRL reﬂects its importance to Victoria’s ICT R&D landscape and the strong local and international proﬁle it has built in its six years of operation.

3.2 Parkville precinct

With more than 10,000 researchers in a two kilometre radius, Parkville has among the highest concentrations of expertise in the world. The expertise includes a large number of researchers in ICT or broadband, which are increasingly integrated with research in other ﬁelds including medical research. The Victorian Government has been an active supporter of organisations and projects in the Parkville precinct, including: i providing $50 million for the development and implementation of the $100 million VLSCI i providing additional support for IBES to look at applications to exploit future network capabilities i helping to attract and embed private research facilities such as the establishment of the CEET by Bell Labs, the research arm of Alcatel-Lucent i facilitation of the bionic eye projects, in which two Victorian consortia are sharing the $50 million Australian Government funding. PAGE 40 VICTORIAN ICT ACTION PLAN

3.3 Major research centres

The Victorian Government also supports research centres with a strong ICT focus. Through close associations with Victorian tertiary institutions, these centres are great examples of the collaboration between industry and education providers. The main facilities include:

i Australian Synchrotron and Multi-modal Australian Sciences Imaging and Visualisation Environment (MASSIVE), associated with Monash University

i the Latrobe Centre for Technology Infusion at the Latrobe University R&D park and research partnerships with the CSIRO

i the Internet Commerce Security Lab, associated with the University of Ballarat, IBM Australia and Westpac Banking Corporation.

3.4 eResearch strategy

The Victorian Government has made a strong commitment to investing in Victoria’s eResearch platforms—infrastructure, applications and tools, skills development, training and outreach programs—to stimulate innovative research activity.

Up to 2010, Victoria had invested more than $100 million in eResearch related initiatives including:

Victorian eResearch Strategic Initiative (VeRSI) $7.95 M

Victorian Education and Research Network $21.5 M

Victorian Partnership for Advanced Computing $8 M

Australian Cancer Grid $11 M

MASSIVE at the Australian Synchrotron $2.25 M

Victorian Clinical and Research Data Linkage Unit $3.2 M

Victorian Life Sciences Computation Initiative $50 M

Optiportal at University of Melbourne $120K

Total $104 M

To supplement this work, the Victorian Government will develop a new eResearch strategy to build better multidisciplinary collaboration and align Victoria’s e$orts with national initiatives. GOVERNMENT FOSTERING INNOVATION THROUGH ICT PAGE 42 VICTORIAN ICT ACTION PLAN

GOVERNMENT FOSTERING INNOVATION THROUGH ICT

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

Governments have long recognised the important role ICT can play in enhancing operations and delivery of services. The Victorian Government invests around $1.5 billion each year in building ICT capability. This expenditure is split between supporting back-o#ce functions and delivery of services.

Today, governments around the world face a range of systemic, complex policy challenges such as climate change, an ageing population and lifestyle health challenges such as obesity and diabetes.6 The scale and complexity of these problems, coupled with increased service demands, changing community expectations and constrained budgets requires the development of innovative, collaborative, community-wide solutions. ICT can play a central role in our capacity to understand and address these challenges.

As the creators and holders of signiﬁcant data and information, governments are coming under increased pressure to make these resources more accessible to businesses, citizens, researchers and other policy-makers. ICT can enable more ﬂexible access to government data and information, giving industry and the community greater scope to develop innovative new ideas and services.

ICT can also enable greater engagement with the public and help address community expectations for government to be more transparent, accountable and to engage more frequently on key issues. The use of social media platforms allows the government to form active partnerships with business and the community in planning, priority setting and policy development.

The future shift to a high capacity, ubiquitous broadband environment will also open up a range of transformative capabilities. Governments will encounter the challenge and opportunity of providing better quality services with greater accessibility, directly to citizens at home and on the move. It will also support more widespread application of smart infrastructure systems to the management of key infrastructure and resources such as energy, water and roads.

Much like the ﬁrst wave of broadband adoption, high-capacity broadband presents the opportunity to transform the speed, nature, quality and location of government operations and services.

ROLE OF GOVERNMENT

Governments have a responsibility to provide services that reﬂect and respond to the needs of citizens. The Victorian Government has a good record of service reform and improvement through the use of ICT and is currently investigating opportunities to change how information and services are provided to Victorians. At the same time, governments can play an important role in supporting the smart use of ICT by businesses and the community in a range of ways. As a large purchaser of ICT products and services,

6 Australian Government, Empowering Change: Fostering Innovation in the Australian Public Service, 2010, pp. 11 - 12 PAGE 43 VICTORIAN ICT ACTION PLAN

M1 UPGRADE " MONASH!CITY LINK WEST GATE

Smart infrastructure is being used to realise e#ciencies in a range of settings—for example the use of smart energy meters in suburban settings and use the of water sensor networks in agriculture. The Victorian Government is leading the way in the application of ‘smart technologies’ to provide transport solutions which are faster and more sustainable.

As part of the M1 upgrade, the Victorian Government has implemented an ITS, in partnership with Transurban, covering 75 kilometres of freeway and making it the biggest ITS system in Australia. This includes freeway ramp signals to monitor and manage tra#c entering the freeway, overhead electronic lane use signs and on-road signage to provide information to drivers ahead of time.

The ITS enables VicRoads to monitor and manage tra#c congestion and incidents at a new, sophisticated level and improve tra#c ﬂow and safety along one of the state’s busiest transport corridors.

Since December 2009, the ITS system has contributed to: i travel time reductions of approximately 40 per cent and 15 per cent during the afternoon peak and morning counter-peaks respectively i increased travel speeds from 50 km per hour to 85 km per hour in the afternoon peak, and 79 km per hour to 87 km per hour during the morning counter-peak i average peak period tra#c volumes up by 10 per cent despite overall daily tra#c volumes remaining static pre and post opening.

These enhancements are making in-roads into reliable travel time and improving safety for Victorians.

government has a direct connection with the commercial development of ICT products and services. In this role, it has scope to drive market use and innovation, and support local industry growth.

The Victorian Government is an Australian leader in the design of procurement practices and other mechanisms supporting industry development and innovation, such as supplier panels, seed grants, competitions and pre-commercial research and development. The eServices Panel continues to play an important role in increasing the participation of local companies in government procurement. From its refresh in mid-2007, the panel has seen more than $150 million worth of business in more than 2,000 ICT projects, with around 70 per cent of contract value paid to Victorian companies.

In addition, the Victorian Government remains the only Australian jurisdiction to have an ICT procurement policy that speciﬁes a default position on intellectual property (IP) allowing contractors to retain ownership of the IP they produce.

Since 2003, the Victorian Government has invested more than $40 million in next generation applications to enable end users, including government agencies themselves, to innovate using ICT and broadband-enabled applications. Such programs provide the opportunity to experiment with how ICT can be used to work more productively, o$er services in a new way or address a pressing problem. PAGE 44 VICTORIAN ICT ACTION PLAN

Projects and users play a key role in generating and disseminating information and supporting the di$usion of outcomes and lessons more broadly.

Recognising the potential of ICT to support e#cient management of key infrastructure and resources, the Victorian Government is working closely with industry to deploy smart infrastructure systems, such as the current state-wide roll out of smart meters. The Victorian Government will continue investing in these opportunities with industry over the coming years.

Governments around the world have also begun to realise the value of the data and information they hold. In responding to the Victorian Parliament’s Inquiry into Improving Access to Victorian Public Sector Information and Data, the government has committed to improving access to public sector information. In 2010, the Victorian Government held App My State—a competition to stimulate the development of innovative mobile or web-based applications using government data. Supported by $100,000 in prizes, the competition engaged citizens as co-creators of new services and products that beneﬁted other citizens, using existing government and other data. The competition was run in conjunction with a Hack Day, which is a promising model for future ideas generation and potential application development.

To support the competition and the release of public sector information more broadly, the government trialled a beta version of a Victorian Government data directory: data.vic.gov.au. The directory is a resource for Victorians, including developers, to search or browse datasets, extract data and request additional data that can be used for a range of purposes.

Another area of rapid development is the use of social media. A rich mix of new media is already in use across the Victorian Government through program-speciﬁc podcasts, RSS feed options, the micro- blogging service of Twitter and the provision of information and data in a variety of formats. While these initiatives are providing new and valuable services for Victorians, there is no overall coordinated approach to their design and development. Guidelines are being developed as a way to ensure consistency and quality of services and information, and encourage greater use of these tools.

TECHNOLOGY TO IMPROVE ACCESS TO ALPINE RESORT

More than 275,000 visitors, 60,000 cars and 2,000 buses head to Mount Buller resort each year. A key challenge is managing tra#c ﬂow in the highly variable driving conditions and ensuring community safety.

In 2010 the Victorian Government invested $1.5 million through its Smart SMEs Market Validation Program to investigate the use of innovative RFID technology to track and manage vehicles in the resort. Geelong company FE Technologies, with the Mt Buller and Mt Stirling Alpine Resort Management Board, is developing a solution using RFID tags and readers in ice and snow that will read and transmit information from vehicle passes at entry/exit points in extreme weather conditions, and manage car parking.

By investing in technology needs of government organisations, the program assists SMEs to research and develop commercially viable products and services. Ultimately this technology will enable Mount Buller to better manage access to the resorts, facilitating year-round visitation and improving visitor safety. PAGE 45 VICTORIAN ICT ACTION PLAN

ACTION 4 ! USE ICT TO FOSTER INNOVATION

THE VICTORIAN GOVERNMENT WILL CONTINUE TO INVEST IN ICT TO DRIVE INNOVATION WITHIN AND OUTSIDE OF GOVERNMENT.

4.1 Demonstrating innovative use of ICT

The Victorian Government is committed to demonstrating replicable projects that exhibit models and best practice relating to next generation broadband applications. i Provide $5 million to support innovative projects demonstrating the next generation of ICT applications to the high-capacity broadband environment through the collaborative Internet Innovation Fund. i Implement the $9 million Re-Innovate Broadband Program to develop and pilot projects that use high-speed broadband to improve regional services and lifestyles – positioning Victoria to capture early beneﬁts from establishment of the NBN.

4.2 Government demand-led innovative ICT

The Victorian Government will continue to be the leader in using procurement and other mechanisms to support industry and foster the development of innovative applications and services for government. i Deliver a second round of the $28 million pilot Smart SMEs Market Validation Program. The program is a pre-commercial R&D initiative that gives SMEs the opportunity to develop technology solutions for government through to proof-of-concept. Solutions may be ICT, biotechnology, nanotechnology or environmental technologies and will involve the generation of new IP. i Hold a second App My State: Premier’s Information Competition in 2011 and investigate running more Hack Day events and other projects to stimulate the development of innovative applications using government data. i Expand and reﬁne data.vic.gov.au i Provide US$6,000 to hold several public-good competitions seeking improvements to current practices within government-related to data-modelling, analysis or forecasting. The competitions will be managed through Kaggle (kaggle.com), a Victorian start-up company providing a crowdsourcing web platform for data mining analysis and forecasting. Up to US$5,000 will fund a series of bioinformatics competitions and US$1,000 will fund a Victorian Government data prediction competition. i Continue the eServices Panel (expires 30 June 2011) and release a request for tender to establish a new panel to operate from this time. PAGE 46 VICTORIAN ICT ACTION PLAN

4.3 Gov 2.0

The Victorian Government will develop and implement frameworks to guide the use of social media, and the management and access to public sector information.

i Implement the Gov 2.0 Action Plan, released in August 2010, to provide a coordinated approach to the use of Gov 2.0 across the Victorian Government. with particular focus on:

— driving adoption in the Victorian public service

— engaging communities and citizens

— opening up government

— building capability.

i Develop a public sector Information Management Framework to provide guidance to agencies on the release of public sector data and information. DEVELOPING THE SKILLS FOR THE FUTURE PAGE 48 VICTORIAN ICT ACTION PLAN

DEVELOPING THE SKILLS FOR THE FUTURE

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

Every industry sector and most businesses rely to some extent on ICT capabilities. ICT workers are found across the workforce and comprise about 4.7 per cent of the total Victorian labour pool. On average, there were 131,500 people employed in ICT in Victoria in the year to August 2010.1

Victoria is recognised as the preeminent state for the supply of ICT skills. It has the largest share of ICT students of any Australian state, accounting for 35 per cent of the national ICT undergraduate enrolments and 40 per cent of postgraduate students.2

Nonetheless, like other states, Victoria continues to experience areas where the supply of ICT skills is not adequate to meet industry requirements. Key supply issues include negative perceptions of ICT as a career among young people and women; a persistent decline in domestic ICT enrolments; a lack of business and soft skills among ICT graduates; and high levels of attrition between enrolment and graduation.

At the same time, demand for ICT skills is expected to continue to exceed supply. The pace of technology change is fast and the cycle of skills obsolescence in ICT is short. Workers are under constant pressure to adapt and re-train as ICT platforms, capabilities, services and devices evolve. Particular areas of current demand reﬂect the importance of a mix of ICT and other skills and the need for more environmentally sustainable ICT solutions.

These are substantial infrastructure and services projects that will put signiﬁcant pressure on the market for ICT skills. The construction of the NBN from 2010 to 2017, and the switch to digital television broadcasting, will change the balance of industry skills needs and add to overall demand for ICT workers. While the nature and mix of skills needed is unknown, the NBN build is expected to demand vocational educational and training (VET) qualiﬁcations.

Securing a reliable supply of ICT workers who increasingly have multi-disciplinary skill sets will continue to be one of the major challenges facing the industry and the education sector. The ability of Victoria’s education system to work with industry to produce ICT professionals with business skills as well as technical knowledge will be crucial to Victoria’s future economic performance and competitiveness. This includes ensuring industry maximises the opportunities under the Victorian Goverment’s recent reforms to the TAFE sector.

“Over the past ﬁve years the combined initiatives of government, education and industry focusing on middle to senior Victorian students has been e"ective in raising the ICT industry proﬁle and increasing enrolments in ICT courses at post-secondary level across industry sectors.” Renee Hoareau, Executive O#cer, Victorian IT Teachers Association (VITTA)

1 ABS, Labour Force, Australia, Catalogue No. 6202.0, August 2010

2 DEEWR, Selected Higher Education Statistics, Commonwealth of Australia, 2008 PAGE 49 VICTORIAN ICT ACTION PLAN

PARTNERING TO DEVELOP THE NEXT GENERATION OF ICT SKILLS

In July 2010, global technology giant Huawei announced it will partner with RMIT University to open a new super-fast broadband training centre in Melbourne.

The Next Generation Technology Training Centre will train more than 1,000 students nationally over the next three years, including at least 500 based in Victoria.

A major part of the centre’s function will be training people in next-generation technologies, with a particular focus on products and hardware for the NBN.

As part of the partnership, Huawei will dedicate permanent R&D training sta$ to teach and train students on the company’s latest technology, ready for use on the NBN.

This collaboration demonstrates the immense value that can be gained by industry and the education sector working together to develop the ICT workforce. Along with the NBN Co’s National Operations and Test Facility in Docklands, the establishment of this training centre in Victoria will ensure the state is the nerve centre of the NBN.

“The partnership between RMIT University and Huawei will help place Australia at the forefront of Next- Generation technology, applications and innovation. This is especially timely given that the ICT industry is in need of a highly-skilled workforce to make full use of the future roll-out of high-speed broadband.”

Peter Rossi, Huawei Australia, Chief Technology O#cer

ROLE OF GOVERNMENT

The Victorian Government has been the most proactive of the Australian states in developing a responsive environment for ICT skills. In 2008, it committed to an ICT Skills Package worth $1.85 million, which included actions in awareness raising, industry-education linkages, workforce development and retention, and skills research.

These remain important areas of continuing focus for the government, under which there have already been some excellent outcomes. The Victorian Government, education sector and industry organisations have worked together to develop and deliver the ICT: Start Here. Go Anywhere careers awareness campaign. The campaign aims to improve young people’s perceptions of ICT careers and to encourage greater numbers of young people to study ICT. From 2008, the campaign’s branding was adopted nationally for National ICT Careers Week.

With increases in ﬁrst preferences for ICT courses of 12 per cent in 2009 and a further three per cent in 2010, it is important that these joint e$orts continue.

The government can also help broker stronger linkages between education providers and the industry, including the development of industry-based learning (IBL) opportunities for ICT students. As part of the ICT Skills Package, the Victorian Government has given support to course providers to o$er students PAGE 50 VICTORIAN ICT ACTION PLAN

an opportunity to gain workplace experience or work on real-world projects as part of their studies. The University Scholarship Program and the TAFE IBL Program have seen partnerships established with businesses such as Fenwick Software, Netsolutions, Target Australia, Network 10, Oxfam Australia, IBM and local councils.

In 2008, the Victorian Government announced fundamental reforms to the VET sector through its $316 million policy statement, Securing Jobs for Your Future – Skills for Victoria. The reforms aim to ensure that a subsidised training place is guaranteed to anyone who wants to upgrade their qualiﬁcations. An independent review was undertaken in 2010 on the implementation of the reforms and the government has committed an additional $37.6 million to act on the ﬁndings of the review. The Victorian Government will continue to work with industry and the VET sector to make the most of the system changes.

The Victorian Government can also play a role in improving the supply of ICT workers from other pathways, such as through skilled migration, increasing the participation of women, and retraining or upskilling workers with other primary skills or training.

Underpinning these e$orts is the generation of accurate industry intelligence to help guide where action is needed. The ICT Skills Snapshot has become the industry standard for tracking patterns of supply and demand for ICT skills. Produced annually since 2002, the document provides information and statistics that government, industry and education stakeholders use to shape their activities. It also helps to respond to emerging skills challenges, such as construction of the NBN.

GAINING PRACTICAL EXPERIENCE THROUGH INDUSTRY!BASED LEARNING

For one second year university student, summer breaks are providing valuable insights into the world of work, courtesy of the Victorian Government’s University Scholarship Program.

Rebecca is currently undertaking a double degree in Business Information Systems and Information Technology at Deakin University. Through the scholarship program she is undertaking a supported internship with major retailer Target.

As part of her internship, Rebecca has been involved in the development of a website for Target’s suppliers and planning for an update to Target’s main website.

These projects have provided Rebecca with the opportunity to gain practical experience to complement her studies.

“Right from the start everyone treated me as one of the employees—I was involved in sta$ meetings and I had plenty of hands-on experience working on important projects.”

Associate Professor Dineli Mather, Director Work Integrated Learning at Deakin University, recognises that the program has also provided beneﬁts to the university through deeper engagement with industry.

“The ICT IBL program has given Deakin the opportunity to partner with industry to develop work-ready graduates and get feedback from employers to ensure our curriculum is relevant and current,” she says. PAGE 51 VICTORIAN ICT ACTION PLAN

ACTION 5 " ENSURE VICTORIA HAS THE SKILLS TO ENABLE INNOVATIVE USE OF ICT

THE VICTORIAN GOVERNMENT INTENDS TO MAINTAIN A STRONG FOCUS ON ICT SKILLS DEVELOPMENT AND WILL REFRESH ITS PACKAGE OF SKILLS PROGRAMS AND SUPPORT IN 2011.

5.1 Inspiring future talent

The Victorian Government will continue to work with education providers and industry to address inaccurate perceptions of ICT careers by young people and to encourage students to pursue ICT-related study and careers. i Extend the ICT: Start Here. Go Anywhere career awareness campaign with further participation from the TAFE sector, young ICT professionals and greater industry demonstration of ICT employment opportunities. The campaign will be delivered through the Australian Industry Group (AiG) and the AIIA with a strong emphasis on regional towns and schools. i Continue to support VITTA through an ICT Teaching Package to promote awareness of ICT skills and careers and provide innovative professional development for ICT teachers. As part of a new package over the next two years, the government will support the ICT Careers Expo, Annual Teachers’ Conference and ICT Achievers Program, which provides around 20 students per year with the opportunity to gain ICT work experience.

5.2 Post-secondary ICT skills programs

The Victorian Government will continue to work with the post-secondary education sector to enhance the quality and breadth of ICT courses and improve the job readiness of ICT graduates. i Implement the VET sector reform, Securing Jobs for Your Future, including the Victorian Training Guarantee (VTG). Areas of focus will include:

— increasing student awareness of the beneﬁts of VET qualiﬁcations, using the VTG, while also studying higher education

— raising industry awareness of the diversity of VET-level skills and qualiﬁcations and the employability of VET graduates

— working with TAFE and universities to facilitate access to VET qualiﬁcations, using the VTG , while studying higher education

— enhancing TAFE and university relationships particularly where dual sector institutes can develop a fully articulated pathway for students. PAGE 52 VICTORIAN ICT ACTION PLAN

i Review the University Scholarship Program and TAFE IBL Program and work with industry and tertiary education providers to continue to support industry-based learning for students.

i Through the additional investment in NICTA VRL, support more than 160 additional research positions.

5.3 Workforce development and retention

Skills development and improvement is important for workers in the ICT sector and for those considering transitioning into it.

i Work to ensure ICT skills continue to be recognised as a high priority skill under Australian Government skilled migration initiatives and industry maximises the opportunities under the Australian Government’s recent reforms.

i Continue to support the Victorian Women in ICT network, established in 2005, which aims to boost the number of women in the ICT industry through practical programs such as the Go Girl, Go For IT interactive and ICT career showcase for secondary school girls in years nine and 10.

5.4 Data intelligence and research

Critical to the delivery of targeted activities is accurate and timely data on the supply and demand of skills.

i Continue to produce the ICT Skills Snapshot and conduct other ICT skills research in areas of emerging importance, such as in relation to the NBN and the participation of international students in the Victorian ICT workforce. ACCELERATING BROADBAND PAGE 54 VICTORIAN ICT ACTION PLAN

ACCELERATING BROADBAND

CURRENT ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

The move to a ubiquitous high capacity broadband network will enable industry and government to boost productivity, provide innovative services, improve global competitiveness and accelerate regional economic development. To achieve these goals, new broadband infrastructure must be deployed rapidly and extensively across Victoria to keep up with escalating demand.

The NBN will deploy ﬁbre-to-the-premises (FTTP) infrastructure (capable of 100 megabits per second) to a minimum of 93 per cent of premises, with new high quality terrestrial wireless and satellite networks to serve premises not reached by ﬁbre.

The past decade has seen broadband infrastructure deployed in Victoria at an exceptional rate. In 2003 broadband was an emerging technology, with less than 75 per cent of Victorian households and businesses being covered by entry level or ﬁrst wave broadband. By 2010 there was near ubiquitous coverage of ﬁrst wave broadband services. At the same time, the speed and quality of broadband services have greatly improved through second wave broadband services, such as ADSL2+.1

Despite this rapid rollout of broadband infrastructure, Victorians’ appetite for broadband continues to exceed market supply, with over half a million households and businesses aspiring to, and willing to pay for, greater speeds than they can currently obtain from networks available to them.2

MAP 1: BROADBAND COVERAGE IN VICTORIA $ACCESS ECONOMICS, JUNE 2010%

# MELBOURNE

# WERRIBEE MELBOURNE AREA ENLARGEMENT

# MILDURA # SUNBURY

# CRANBOURNE # HEALES # GEELONG

# MELBOURNE

# WERRIBEE Melbourne urban boundary # SWAN HILL

# CRANBOURNE EELONG

# COBRAM

# ECHUCA # WODONGA

# DONALD # SHEPPARTON # WANGARATTA Melbourne urban boundary # BENALLA # ST ARNAUD # HORSHAM # BENDIGO # MOUNT BEAUTY

# SEYMOUR # # STAWELL # CASTLEMAINE MANSFIELD

# DAYLESFORD

# BALLARAT # SUNBURY # HEALESVILLE # ORBOST # HAMILTON # # WERRIBEE

# MORTLAKE # # GEELONG CRANBOURNE # TRARALGON

# WARRNAMBOOL THIRD WAVE %50 MBPS AND ABOVE& # LEONGATHA # SECOND WAVE %8!50 MBPS& FIRST WAVE %8 MBPS AND BELOW& NOT SERVED BY TERRESTRIAL NETWORKS

1 Access Economics, Telecommunications Spend and Demand Report in Victoria, May 2010

2 Ibid PAGE 55 VICTORIAN ICT ACTION PLAN

FTTP coverage is currently limited to higher-end business and government users and small scale deployments to households in new estates. While only one per cent of households and four per cent of businesses currently have access in Victoria, the evidence suggests that demand for third wave broadband is already racing ahead of supply. In June 2010, approximately 13 per cent of Victoria’s telecommunications market would have taken up a NBN-like service if it was o$ered. By 2013, this demand is expected to grow to about 50 per cent of the market.3

It is critical for Victoria that the NBN’s ﬁbre coverage meets the increasing demand across Victoria as soon as possible within the funding parameters of the project. It is also vital that regulatory arrangements governing the network are conducive to competitive, a$ordable and innovative services that are compelling for end users, and support productive use of the network.

ROLE OF GOVERNMENT

With forecast strong demand for broadband services and the Australian Government’s commitment to deploy the NBN, Victoria has the opportunity to have the most extensive and productive economy of any state. The challenge for the Victorian Government will be to ensure that all parts of the state are connected to the high-quality network infrastructure as quickly as possible and to generate the beneﬁts associated with its use.

The Australian Government’s commitment for the NBN ﬁbre network to reach 93 per cent of the population is expected to be determined on a commercial basis. The Victorian Government believes that Victoria can achieve signiﬁcantly better broadband coverage by identifying commercial factors that make greater deployment economically feasible.

MAP 2: INDICATIVE FIBRE, WIRELESS AND SATELLITE COVERAGE FOR VICTORIA FOLLOWING COMPLETION OF THE NBN, BASED ON INITIAL MODELLING $NBN CO, JUNE 2010%

Mildura Red Cliffs

Euston OPTIC FIBRE %MINIMUM 100 MBPS& FIXED WIRELESS %MINIMUM 12 MBPS& SATELLITE %MINIMUM 12 MBPS& Swan Hill

Kerang Barooga

Rutherglen Numurkah Wodonga Echuca Chiltern Corryong Warracknabeal Tallangatta Kyabram Nhill Donald Wangaratta Dimboola Wedderburn Shepparton-Mooroopna Benalla Myrtleford St Arnaud Rushworth Horsham Bendigo Bright Nagambie Euroa Dunolly Heathcote Seymour Stawell Carisbrook Mansfield Kyneton Broadford Alexandra Ararat Daylesford Kilmore Beaufort Gisborne Kinglake Casterton Ballarat Diggers Rest Mallacoota Bacchus Marsh / Melton Healesville Orbost Hamilton Yarra Junction Melbourne Bairnsdale Lara Mortlake Maffra Loch Sport Heywood Geelong Warragul Traralgon Camperdown Ocean Grove-Barwon Heads Lang Lang Portland Cobden Colac Yinnar Warrnambool Anglesea Timboon Sunset Strip Korumburra Lorne Yarram Cape Paterson Foster Apollo Bay-Marengo

3 Access Economics, Telecommunications Spend and Demand Report in Victoria, May 2010 PAGE 56 VICTORIAN ICT ACTION PLAN

Victoria’s relative population density and the Victorian Government’s investment in ﬁbre optic backbone infrastructure through programs such as VicFibreLINKS improve the economics of ﬁbre optic broadband in this state. If the NBN Co aims for the 93 per cent national coverage target, the Victorian Government’s analysis shows that approximately 95 per cent coverage is a reasonable expectation in Victoria.

While telecommunications is primarily an Australian Government responsibility, the Victorian Government can play a key role in facilitating the physical deployment of the NBN and advocating for the most e$ective competition and regulatory arrangements. Through active facilitation and advocacy, the government aims to deliver timely access to the NBN and better pricing, choice and quality of services for end-users.

There is also a critical need to ensure that Victorian citizens, government and businesses are early and productive users of high-capacity broadband. The Victorian Government has the capacity, through a range of policy actions and funding programs, to accelerate the innovative use of broadband, particularly for delivery of its own services (as articulated in Action 4).

“Ai Group believes the NBN is critical to securing Australia’s international competitiveness and economic future because it will deliver universal superfast broadband to all Australian businesses and households. As the centrepiece of the network, we are conﬁdent that the NBN Co’s National Operations and Test Facility will put Victoria at the forefront of delivering high-speed services and make possible new ways of delivering essential business services including smart infrastructure, e-health, digital education, e-business and e-community as well as delivering high-tech services to the home.” Tim Piper, Director Victorian Branch, Ai Group

WEB 2.0 TOOLS HELPING FARMERS IN THE HIGHLANDS

Drought and climate change are forcing farmers to develop new agricultural practices suited to changing and often extreme conditions. With support from the Victorian Government’s collaborative Internet Innovation Fund, the Central Highlands Agribusiness Forum, City of Ballarat, Moorabool Shire and Lateral Plains are working together to develop innovative web-based technologies to help farmers improve the management of resources in these di#cult conditions.

Under the project, climatic and environmental data is collected through sensor systems and weather stations located on farmers’ properties. This data is transmitted to a central point for analysis and processing. This analysis is made available to farmers in real-time on web 2.0 based interfaces accessible on computers and mobile devices.

By working with farmers to develop a simple, uniﬁed and user-friendly web 2.0 interface, the project will deliver a new generation of interactive and collaborative online tools and resources for farmers and agriculturists which will potentially improve e#ciencies and environmental impacts of farming and agricultural practices.

The project demonstrates the beneﬁts from the deployment and use of new technologies in agribusiness and, ultimately, these tools and processes will be applied to similar farming environments in other parts of Victoria and beyond. PAGE 57 VICTORIAN ICT ACTION PLAN

ACTION 6 ! ESTABLISH VICTORIA AS THE MOST EXTENSIVE AND PRODUCTIVE BROADBAND ECONOMY IN AUSTRALIA

SINCE THE RELEASE OF THE BROADBAND FRAMEWORK IN 2005, THE VICTORIAN GOVERNMENT HAS ACTIVELY PROMOTED THE DEVELOPMENT OF BROADBAND INFRASTRUCTURE AND SERVICES ACROSS THE STATE. IT HAS USED A MIX OF DIRECT INVESTMENT, FACILITATION, ADVOCACY TO THE AUSTRALIAN GOVERNMENT AND LEADING USE OF BROADBAND IN SERVICE DELIVERY. GOVERNMENT EFFORT IS NOW FOCUSED ON THE ROLLOUT OF NEXT GENERATION BROADBAND NETWORKS AND SERVICES.

6.1 Investing in infrastructure

The State Government will invest in extending Victoria’s competitive ﬁbre optic backbone infrastructure, which directly attracts additional investment in more extensive and competitive broadband coverage.

The $20 million VicFibreLINKS program will establish competitive ﬁbre optic cable backbone links in key regional markets, including routes to Mildura and Warrnambool in combination with the Australian Government’s Regional Backbone Blackspots Program. The proximity and cost of backhaul access will be a key commercial determinant of the timing and extent of the rollout of FTTP infrastructure under the NBN. Additional competitive backhaul will improve the business case for higher ﬁbre infrastructure coverage in regional Victoria.

6.2 Maximising the next generation of broadband in Victoria

The NBN is a massive and complex infrastructure project. It also promises massive economic and social opportunity. The success of the project in Victoria will depend on combined e$orts of all levels of government, businesses across the economy and end users in the community.

The Victorian Government will actively facilitate and advocate for the earliest and most extensive possible deployment of the NBN in Victoria. The government will work with NBN Co, the Australian Government, Victorian local governments and the training sector to ﬁnd e#cient solutions to infrastructure access, planning arrangements and skills required for the progressive construction and activation of the network.

The Victorian Government will also advocate to the Australian Government on the commercial advantages of the NBN exceeding its minimum rollout obligations in Victoria. The Victorian Government will publish expert studies, such as the Telecommunications Spend and Demand in Victoria series, to support its advocacy. By publishing such information, the Victorian Government will also help businesses, particularly the ICT industry, local governments and end users, to track the progress and impact of the NBN and to inform their actions in response. PAGE 58 VICTORIAN ICT ACTION PLAN

6.3 Supporting e&ective use of broadband

Alongside these initiatives, the Victorian Government will take a leading role in translating broadband access into economic and social beneﬁts by supporting rapid adoption of new broadband applications, conﬁrming the state’s national leadership in the e$ective use of broadband. These initiatives are outlined in more detail in Action 4.

PAGE 59 VICTORIAN ICT ACTION PLAN

ACRONYMS

Acronym Full title

ABS Australian Bureau of Statistics ACS Australian Computer Society ADSL 2+ Asymmetric Digital Subscriber Line service (category 2 broadband connection) AiG Australian Industry Group AIIA Australian Information Industry Association BVA Bionic Vision Australia CEET Centre for Energy-E#cient Telecommunications DEEWR Department of Education, Employment and Workplace Relations (Australian Government) FTTP Fibre-to-the-premises GDAA Game Developers’ Association of Australia Gov 2.0 Government 2.0 HD High deﬁnition IBES Institute for a Broadband Enabled Society IBL Industry-based learning ICT Information and communication technology IP Intellectual property IPv6 Internet Protocol version 6 ITS Intelligent Transport Systems KPI Key performance indicator MVP Market validation program NBN National Broadband Network NBN Co National Broadband Network Co Limited NICTA National Information and Communication Technology Australia NICTA VRL National ICT Australia Victorian Research Laboratory R&D Research and development RFID Radio-frequency identiﬁcation SME Small to medium sized enterprise TAFE Technical and further education VeRSI Victorian eResearch Strategic Initiative VET Vocational education and training VGBO Victorian Government Business O#ce VITTA Victorian Information Technology Teachers Association VTG Victorian Training Guarantee