Recent figures from East and Partners reveal Australian Federal Government spending on IT&T will increase by 9.2 percent over the next 12 months to AU$14.6 billion. However, the bulk of this is likely to go to large multinationals.
-The Coalition is turning its back on the most direct form of ICT [Information and Communication Technology] industry development just when Australia needs it most, by telling departments and agencies not to worry about SMEs when they make ICT purchases," said Shadow Minister for IT, Senator Kate Lundy, in a statement.
Lundy chided the Government for not doing enough to support the development of domestic ICT SMEs, which she said are often the most competitive and innovative businesses selling to the public sector.
-The opportunity to prime a Government contract also provides an export credential in the form of credibility in the eyes of the global market," Lundy said. -The purchasing power of the Federal Government should be used to ensure if these opportunities are to be forthcoming."
However, not everyone believes the Government should have a bias towards local companies. Steve Bittinger, research director at Gartner, told ZDNet Australia the practice would do more harm than good. -Local companies need to compare themselves against international best practice," he said. -Australia is such a small market, a reasonable market in Asia-Pacific, but rapidly being overtaken by other countries."
He said that although we have some reasonably successful mid-tier companies, Australia has no IT companies on the scale of Nokia, for example.
Joel Schwalb, managing director of IPEX, which has an outsourcing contract with the Government, disagreed with this point of view. He pointed out that exports from small to medium businesses (SMBs) in Europe are enormously big compared to Australia.
-The reason why companies can do so well is because they start with a strong local base," he said. -The Government, both Federal and State, in those countries are extremely supportive of small to medium businesses. In Australia that is very rarely seen."
Schwalb believes companies need a strong local base if they are to expand overseas. -The Government is talking about it but its not filtering down to decision makers," he said, claiming a national inferiority complex was influencing Government purchasers to buy from US companies.
-Of the $14 billion spent on IT, very little in percentage terms will go to local companies," Schwalb said. -Among SMEs we'll get the lion's share, but it will be small compared to IBM and Compaq."
Bittinger agreed that government rhetoric does not often translate into action. -There are guidelines that to some extent are intended to favour Australian businesses, but in practice those guidelines get used to suit the circumstance rather than the letter of the law," he said.
According to Bittinger, Australian companies should focus on what they do best. He cited a project involving Macquarie University that developed the 802.11a wireless standard, which was sold to Cisco for -several hundred million US dollars", as a big IT&T success.
-A lot of organisations, all they want to do is build themselves up to be big enough to buy," said Bittinger. -This way they can bypass the commercialisation stage, and we become a research country."
The Office for the Minister for IT and Communications, Senator Alston, failed to respond to ZDNet Australia enquiries by the time of publication.
