How can small-to-medium businesses in Australia get a bigger piece of the Government spending pie?
The Australian Bureau of Statistics tells us there are now more than 21,000 ICT businesses in this country with fewer than 20 employees.
More than three-quarters of them have fewer than four people working within them to develop that innovative new product or service.
Here, as overseas, many of these small to medium outfits (SMEs) have continued to carve out a living in cooler economic climates by learning to stay fast on their feet, carefully managing scarce financial resources, and partnering effectively with other like-minded small shops offering complementary capabilities.
For many, opportunities have been found in much larger organisations as cost-cutting has forced layoffs, thereby depleting internal skill pools and making outsourcing one of the few viable alternatives for corporations.
A fair number of the SMEs counted by the ABS, have, of course, been formed by victims of those layoffs huddling together trying to develop markets for the skills they developed in the big end of town in happier times.
Whatever their makeup and business model, they are crucial to driving technology in a country where small business now counts for more than half the workforce; there are 1.1 million small businesses out there.
But one sector of the market remains generally beyond the reach of our ICT SMEs: federal government.
Navigating the government procurement maze is simply too daunting a challenge for many SMEs to undertake alone, preferring either to take a ride on the coat tails of some lumbering multinational vendor, aiming their bids at local or state governmentâ€" or to restrict their market to the private sector.
There are lobbyist/consultants in Canberra whose sole stock in trade is to help guide SMEs towards opportunities via the required bureaucratic imposts, and many earn their fee. But for all that, few SMEs report much success in getting government business, and the reasons why are many and varied. Some lack the financial foundations requiredâ€"others simply fall short in capability.
Getting on a government list of approved suppliers is essentially simple enough by meeting the terms of the Endorsed Supplier Arrangement (ESA), and few would argue against a need for sufficient asset and resource backing in any supplier/procurement relationship, public or private.
There are obvious advantages to the small ICT shop with a successfully completed government contract on its belt, particularly in adding to the critical mass required to develop its products to exportable level.
However, it can be an expensive punt for those deciding to invest in the required levels of professional indemnity and public liability insurance, develop a costly and time-consuming bid, and after waiting sometimes six months or more for a decision, fail.
There are few if any channels for review and futility is often seen as the only result of the time and effort put in.
After years of internal review, pressure from the private sector and some highly publicised examinations of flawed procurement policies and procedures, the federal minister for ICT (and the arts) Richard Alston has called for proposals to make the path to Treasury's door less difficult for local SMEs.
The extent of government spending on ICT still remains one of the great economics mysteries. A range of proposals is scheduled to be delivered for ministerial consideration before year's end.
Whether any or all are adopted remains to be seen, but given that Australia's ICT trade deficit continues to run at more than AU$16 billion a year, our SMEs must be given greater opportunity to work to develop their capabilities to begin redressing this imbalance.
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Richard Hogg is National president of the Australian Computer Society (ACS). The ACS is the recognised association for Information Technology (IT) professionals, attracting a membership (over 16,000) from all levels of the IT industry and providing a wide range of services. A member of the Australian Council of Professions, the ACS is the guardian of professional ethics and standards in the IT industry, with a commitment to the wider community to ensure the beneficial use of IT.
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