The business opportunities for cybersecurity make it an appealing industry, and though countries like the United States and Israel dominate the cybersecurity market, Australia is making some noise. However, Australia does face some challenges when it comes to breaking through on the global cybersecurity scene.
Despite the high-profile success of companies like Telstra, many Australian technology companies – including cybersecurity startups – struggle to find success. Why? Because Australian startups face a tough road securing the venture capital funding they need to turn promising ideas into competitive, real-life technologies.
Even though securing VC funding has been more challenging for Australian cybersecurity startups than their peers globally, the country – in the form of the Australian Government, universities and the private sector –recognized the need and has taken steps to ensure Australia will play a significant part of global growth of this industry.
According to Australia’s Cyber Security Strategy report’s first annual update, the country ranks fourth globally in patent filings in cybersecurity research and development. A March 2017 report funded by the Australian Government, “Engaging the Future of STEM,” noted that 22 percent of Australian economic activity, and more than a quarter of its exports, are based on advanced physics and mathematical research. Despite these facts, the country will have to clear other hurdles to ensure the thriving cybersecurity ecosystem continues to flourish.
Multipliers, Mentors and Cheerleaders
To help solve a lack of available VC funding, once seen as a roadblock for turning the innovative ideas behind patents into real-world solutions, the Australian government has made significant investments to encourage cybersecurity research.
Included in this is the foundation of the Australian Cyber Security Growth Network (ACSGN), a non-profit entity founded by the government as part of its National Innovation and Science Agenda. The ACSGN is one key driver of Australia’s $240 million (AUS) (invested in various programs over differing time frames) Cyber Security Strategy (launched in April 2016 to “advance and protect” the country’s interests online) aimed at defending the nation's cyber networks from organized criminals and state-sponsored attackers. Some of that investment involves the Australian Signals Directorate (ASD), which is responsible for foreign signals intelligence (SIGINT), and the Digital Transformation Agency, which is tasked with ensuring cybersecurity is part of the foundation of digital projects undertaken by the government. The Australian Defense Ministry funds a separate $400 million (AUS) cyber initiative of its own.
The ACSGN released its Cyber Security Sector Competitiveness Plan in April 2017, acknowledging VC funding for early-stage startups in Australia is thin. Australian executives surveyed for the World Economic Forum's Global Competitiveness Index rate access to venture capital in Australia at 40th in the world.
Another roadblock is the lack of human capital to drive and maintain these initiatives. Cybersecurity research firm Cybersecurity Ventures recently predicted a worldwide shortfall of 3.5 million cybersecurity workers by 2021. As the world faces this skills shortage, the Australian government is spearheading initiatives to find and implement best practices for encouraging its youth to take up scientific learning. In part, because the country has a reputation for excellence in scientific research that it wants to maintain. These initiatives include establishing a Rural and Regional Enterprise Scholarships program targeting STEM education, launching Academic Centres of Cyber Security Excellence and investing $10 million (AUS) in the “cyber smart nation” program.
Business and Government Work Together
Just as important as government investment in research are the partnerships that have been and will be formed between academia and the corporate world. My company, QuintessenceLabs, is the product of just such a partnership. The research that led to the founding of the company began at the Australian National University while our founder, Vikram Sharma, was completing his Ph.D. in Quantum Physics. While at ANU, Vikram’s team used their research to implement one of the world’s first second-generation quantum key distribution systems, and that became the basis of QuintessenceLabs.
The Cyber Security Cooperative Research Centre (Cyber CRC) is the most recent effort in this area. Developed by the Australian Cyber Security Research Institute (ACSRI), a not-for-profit company dedicated to promoting industry investment into cyber security research and development, and announced on September 22, the Cyber CRC will receive $50 million (AUS) in grant funding from the Australian government over the next seven years.
On top of this, it involves a cooperative effort between 24 organizations including universities and research institutions, industry partners and government agencies that will contribute than $89 million (AUS) towards the project.
There have also been many joint efforts between businesses and universities on a less involved scale, including examples such as staff members from the Australian Centre for Cyber Security (ACCS) at the University of New South Wales (UNSW) briefing groups at cybersecurity companies such as Thales on relevant topics.
Of course, it’s not just business benefiting from education, cybersecurity companies are giving back to schools as well. For instance, Optus developed a program to inspire curiosity about cybersecurity in secondary school students.
Nowhere are the close relationships between the Australian Government, academia and industry more evident than in the country’s capital, Canberra. In addition to being home to the ANU and the campus of the UNSW that houses the ACCS, Canberra is home to the Centre for Internet Safety (CIS) at the University of Canberra, and many government agencies involved in cybersecurity. Also, Canberra’s Cyber Security Directory lists 48 companies involved in the industry – a considerable number for a city with just under 400,000 residents.
A Hopeful Future
While the challenges for the Australian cybersecurity community are not small, the country, in the form of federal and state governments, corporations and non-profit organizations is making a concerted effort to find ways past any potential road blocks. A lack of VC funding is offset in part by government funding and tax incentives, students are being encouraged to explore cybersecurity as a career in programs sponsored by Australian businesses, and universities are conducting world-class cutting-edge research into cybersecurity solutions.