The U.S. insists on self-destruction. Australia should fill its boots

Australia’s public debate around Trump has been too timid and too focused on defensive measures against tariffs. This misses the bigger threat that US tech leadership will wane and also misses the economic opportunity to develop our tech sector.

For nearly a century, the US has been the place to do science and innovation. Every country on earth has leaked their best people and ideas to America, now the U.S. almost unbelievably has decided to press self-destruct.

That is a tragedy. We cannot alter it. We can only fill our boots.

Trump’s team is gutting science and government funding. He has reversed dozens of presidential executive orders to develop next generation of green technologies. The Inflation Reduction Act (IRA) – the program to turbocharge green manufacturing has also been put on ice. This could be more consequential in the long run than the tariffs.

In response to Trump’s tariff announcement, Anthony Albanese yesterday promised a $1 billion fund in zero interest loans for firms to take advantage of new markets and export opportunities (supported by Peter Dutton with some quibbling over process).

This misses the opportunity. Australia can develop a world-class tech sector that can build resilience in the face of declining US tech leadership and develop an economic edge. Australia been making attempts to reinvigorate its tech sector, but the IRA, executive orders and US attraction made it so difficult. Most of that has now disappeared.

We can have a one-time brain gain from scientists, technologists and funders fleeing the US. We can entice Australian innovators to stay here rather than relocate to the US. We have a political window to truly make bets on emerging tech – the public will understand. And we can address some of the long-term domestic inhibitors to growing the tech sector.

There will not be another chance. The US will eventually retreat from this extreme position.

Of course, other countries are already making moves. But Australia has high wages and good living standards. We need to get the ecosystem right.

I have suggestions the Australian government can do quickly:

1. A cross-departmental small agile taskforce to identify and smooth the talent pipeline (as already suggested by Danielle Cave). There is a flood of US talent hitting the market right now. Policymakers are so often reticent to touch immigration, but this is targeted to a relatively small number of people. This approach needs to combine with funding outlined below.

2. A scale-up infrastructure fund. Top-end talent will not come without funding. One of the dead zones where companies leave Australia is the demonstration stage – the step between lab scale and full commercial production. This has been one of the strengths of the US, and they have laboratories in most key technologies that do this work. Trump is gutting these facilities.

   Demonstration-stage facilities are rarely profitable. They mostly do work for high-risk startups with no money and commercial operators won’t touch it. Australia has very few of these because government programs such as National Collaborative Research Infrastructure Strategy focus on research infrastructure not scale-up.

   At the other end, the National Reconstruction Fund wants to turn a profit which is impossible for these facilities. This does need to be overly expensive. Something in the order of $2 billion over 10 years ($200 million per year). We need these facilities to attract the newly available talent, and also to bring in research from abroad.

3. A $500 million per year ($5 billion over 10 years) expansion of funds for scientific research. Most of the non-digital tech IP in Australia is either held by universities or in companies that spun out of universities. The underlying science is central to the tech sector.

   I know universities are not popular recipients of govt largesse. But this is the unsexy bit of building an ecosystem. If we want to attract good scientists, there needs to be funds. Something of the order of $5 billion over 10 years would indicate a serious approach with quick turnaround times on funding applications.

   At $500 million per year, this is affordable for the value it offers. It would be separate to ARC funding. The announcement alone of such funds would pique the interest of good scientists.

4. Faster visa processing for tradespeople and technicians. Once a tech company get past lab stage in Australia, their skills blockage is often tradespeople, technicians or engineers. Not scientists. This is well known, and these positions are already on the skilled visa list, but it is not working as quickly as it should. We need this to take advantage of the potential US brain gain

These four steps would help us take advantage of America’s own goal. The funds would be in the high hundreds of millions of dollars per year – not particularly expensive. And it would deliver a step change in Australian capability over any of the current defensive measures proposed.