Ambitious entrepreneurs and sensible policies could make WA the world’s pre-eminent location for data analytics, remote operations and high-tech industries.
Almost one in 10 people aged 24 to 30 have left WA in the past five years, signalling more must be done to create a culture of opportunity.
It may have gone unnoticed until now, but recent data indicates the number of young people choosing to live in this state is shrinking.
There were 9 per cent fewer Western Australians aged 24 to 30 in June 2019 than five years prior, when the population for that group peaked.
In raw numbers, the demographic fell by 26,156 people to about 262,000, according to the Australian Bureau of Statistics.
That’s despite growth, albeit slow, in the state’s population overall, which increased 4 per cent to 2.6 million across that five-year period.
While the millennial exodus will spark concerns of a brain drain for policy makers, a move overseas or interstate can be the opportunity of a lifetime for a young person.
The team from startup Humm moved from Perth to San Francisco in 2018 to participate in the University of California Berkeley’s prestigious Skydeck accelerator program.
Last December, the business raised $US2.6 million ($3.7 million) from US-based investors to commercialise its Edge headband technology, which stimulates brain function for learning and work.
“We had to leave WA for what we’re doing, we’re doing something really weird,” chief executive Iain McIntyre told Business News.
“To convince people to invest, to be closest to the most customers possible, and be linked up to the science, we had to be in San Francisco.”
Mr McIntyre said the attitude towards the brain drain needed to be inverted and that WA actually benefited from people leaving and bringing back new skills and ideas.
He said there was a different business culture in San Francisco and nearby Silicon Valley, the startup capital of the world.
“That mentality of doing weird things and seeing if they work isn’t in Perth,” Mr McIntyre said.
“People in Perth want to do it as it is done.
“In San Francisco, [you are] encouraged to do it as it has never been done before.”
The streets of San Francisco.
Although WA as a whole needed to have a more innovative culture and celebrate entrepreneurship, he said Perth’s tech ecosystem had been very supportive.
An example was Spacecubed, which had offered quality mentoring programs led by people with business experience.
Another factor in Perth’s favour was that it was a great place to live, Mr McIntyre said.
“Most of the people in San Francisco and around the world think Australia is the best place in the world,” he said.
“All of us [the Humm team] intend to live in Australia, even if for me it’s less certain.”
Mr McIntyre’s sentiments were reflected in a Business News survey of Western Australians who had worked or planned to work overseas or interstate, with 57 responses.
About 90 per cent said they had looked to other markets because there were more work opportunities, while 51 per cent wanted to broaden horizons.
Only 27 per cent said they had moved or intended to move because WA was an unexciting place.
But luring all those expats back will be a challenge.
Nearly half of those surveyed responded ‘maybe’, when asked if they intended to return to WA.
Of those intending to come back, about 62 per cent said it was a great place to raise a family and 67 per cent cited family already here.
Some of the biggest concerns were about economic diversification, with respondents commenting they felt there were not many opportunities in industries outside resources.
Stairway or circle
In some ways the problem is circular.
Take technology as an example.
Big tech businesses may not set up offices in Perth because of a lack of expertise here, meaning local talent has to look offshore for opportunities, shrinking the remaining technical pool to attract companies in future.
Innovation consultant Lauren Amos said prospects for tech graduates would depend on the type of work they wanted to do.
“If you want to work for a [local] company … you’d be in house doing something for a company that’s not their specialty,” Ms Amos said.
“If you look at the biggest industries in Perth – utilities, a couple of banks, resources, oil and gas – tech companies don’t really have their hubs here.
“You can get a job as a data scientist, but you’re not really going to be working in Google’s DeepMind [an AI subsidiary].”
Innovation consultant (and Business News contributor) Kate Raynes-Goldie said some specialty sectors had successful businesses but did not necessarily have clear options for progression.
An example was in digital twin technology, where businesses build virtual replicas of processing plants or mine sites to sharpen operational efficiencies and study responses to equipment failure.
“There’s only a few people in WA who have really advanced skills in [digital twin technology], who can combine the digital and the artistic,” Dr Raynes-Goldie said.
“In a lot of industries there’s a pathway, there’s a progression in your career to get to a senior level.
“We don’t really have that clear progression; it’s hard to build your career here without having to leave and get experience elsewhere.”
Perhaps the challenge for WA is not young people leaving but whether they return, and the state’s capacity to attract the right people to fill the gap.
A big impediment to innovation in WA has been Australia’s visa system, DownUnder GeoSolutions co-founder Matt Lamont told Business News.
“We’ve got a young guy who’s got a PhD in computer science from the University of Cambridge, as good as you get in the world, and he’s got under two years experience so we can’t bring him in,” Mr Lamont said.
“How silly is that?
“Is this a knowledge environment if you can’t bring in the best in the world?
“We’ve got another guy who’s got a PhD in computational mathematics and numerical methods from a top Russian university; who wouldn’t want to bring him in?”
He said these and other highly skilled people did not meet the latest visa requirements, adding that the abolition of the 457 visa, in March 2018, had been a step backwards.
“If you have somebody installing plasterboard in your house, a guy who works really hard might install four times more plasterboard than somebody who is average,” he said.
“That’s not the case in physics, mathematics and programming.
“The guy who is top notch, a programmer for example, will produce 50 or 100 times more rapidly than another guy, and produce stuff the other guy can’t do.
“The difference is just immense and you can’t grow a top-tier technical knowledge business without top-tier people.
“It drives you to start overseas research and development. How is that good for Australia, driving R&D offshore?”
Mr Lamont said Perth was a highly appealing location for skilled workers, and attracting them to WA was not as much of a challenge as working through the immigration system.
The World Economic Forum’s 2019 Global Competitiveness Report backs up these concerns.
It ranked Australia 138th out of 141 places in ease of hiring foreign labour.
Visa issues have also played havoc with WA’s credentials in terms of attracting international students.
For a period the state was excised from the Regional Sponsored Migration Scheme visa subclass.
Although the decision was reversed late last year, the effect had been to reduce incentives for students to choose WA education providers, with fewer employment opportunities after graduation.
Across higher education, vocational training, schools and other providers, commencements fell about 10 per cent over three years to 2019, according to federal education department data.
A place to live
There’s a series of factors to consider for a small and isolated city such as Perth in attracting talent.
One positive is the city’s high level of liveability.
Data on this varies, with The Economist Intelligence Unit selecting Perth as the world’s 14th most liveable city in 2019.
But the city has fallen in recent years, with the category of culture and environment reportedly the poorest score.
On other metrics Perth has performed well, such as a March 2019 survey by Ipsos, which ranked the city Australia’s second most liveable.
The nearby harbour city of Fremantle was ranked in the world’s top 10 places to visit by Lonely Planet.
A big selling point for some has been the Forrest Foundation’s funding, which has so far brought about 20 highly talented young people to WA with research grants.
Erica Smyth, who is a director of numerous organisations including National Energy Resources Australia, said WA was the pinnacle of where highly skilled people wanted to live.
“If you can deal with the isolation, there’s not many places like this to live in the world,” she said.
There were challenges to be worked through, however, including an element of loneliness for new migrants, and sharpening up the strategy of how universities approached recruiting researchers.
“The people we want to attract need to see there are others in that field of expertise they can communicate with, Ms Smyth said.
“Having diversity within our universities is key.
“Maybe we should consider ourselves as a group of universities of the whole state, rather than individual unis competing with each other.
“If they acted in a strategic way to ensure this is a place of skills and learning and innovation, we shouldn’t have trouble attracting academics and people who rely on academics.
“There’s a relationship between innovation and fundamental research in universities.”
That would be similar to the international student market, where there is a level of collaboration between universities already.
But success will be crucial.
There was a real risk WA could face a skills shortage in the decade ahead, Ms Smyth said.