Victorian ICT industry findings 2014
The Department of State Development, Business and Innovation's latest information and communication technology (ICT) industry survey indicates that the Victorian ICT industry remains strong, while facing uncertain global economic conditions.
- The Victorian ICT industry employs around 91,300 people – approximately 31 per cent of total Australian ICT industry employment.
- ICT companies operating in Victoria have gross annual revenues of $34.2 billion.
- Victorian headquartered ICT companies have annual revenues of $2.51 billion from overseas operations and exports of ICT equipment and services.
The Victorian ICT industry employs 91,300 people in approximately 8,139 employing companies:
- companies headquartered in Victoria account for 82 per cent of employment or 74,700 people
- Victorian operations of Australian ICT companies headquartered interstate account for 11 per cent of employment or 10,100 people
- Victorian operations of foreign based companies account for 7 per cent of employment or 6,500 people.
A rise in employment in Victorian headquartered companies (up 8 per cent on 2013) has partly offset lower employment in Victorian operations of foreign based companies (down 5 per cent on 2013).
Fifty-two per cent of Victorian ICT employees work in the three sectors of computer software development and installation; systems analysis and computer programming; and software consulting. While the proportion of people employed in these sectors has remained stable in the last two years, there has been an increase in jobs in systems analysis, computer programming and software consulting and a decrease in software development and installation employment.
The telecommunications services sector remains a strength in Victoria as does the software publishing, and internet and data services sectors.
Victorian industry employment
Ninety-three per cent of all employing Victorian ICT companies have fewer than 20 employees and these companies employ 46 per cent of the total ICT industry workforce (down 3 per cent on 2013). ICT companies with 100 or more employees account for 45 per cent of ICT industry employment (7 per cent increase on 2013). Companies with 20 – 99 employees account for 9 per cent of the ICT industry workforce in Victoria, a 4 per cent decline on 2013.
ICT industry revenue
The Victorian ICT industry generates annual revenue of around $34.2 billion, up 3.3 per cent on 2013:
- $27.6 billion is from Victorian headquartered ICT companies
- $5.0 billion is from Victorian operations of Australian ICT companies headquartered interstate and
- $1.6 billion is from foreign ICT companies with operations in Victoria.
Strong revenue growth in Victorian headquartered ICT companies has compensated for a significant fall in revenue from foreign ICT companies with Victorian operations. Forty-three per cent of total ICT revenue is derived from the telecommunications sector.
|Industry Sub Sector||
|Computer software consulting||$4,510||13%|
|Software development and installation||$4,270||13%|
|Manufacturing – ICT equipment||$2,830||8%|
|Wholesaling – ICT goods||$2,560||8%|
|Computer hardware maintenance and consulting||$2,260||7%|
|Systems analysis and computer programming||$1,400||4%|
|Internet and data services||$790||2%|
|Internet and web design and consulting||$600||2%|
|Computer software publishing||$70||>0.5%|
Large ICT companies (100 employees or more) account for $24.4 billion (71 per cent) of total revenue. Medium-sized companies (with 20-99 employees) account for $2.2 billion (7 per cent) of annual revenue with small ICT companies contributing $7.68 billion (22 per cent).
Overseas revenue and exports
Victorian headquartered ICT companies have annual revenues of $2.51 billion from overseas operations and exports of ICT equipment and services, which represents 9 per cent of the total industry revenue, and an increase of 13 per cent on 2013. Of this overseas revenue, 26 per cent comes from telecommunications services, with 18 per cent from software development and installation.
It is estimated that a quarter (25 per cent) of ICT companies in Victoria export ICT products and services regularly and 32 per cent export irregularly, with:
- 19 per cent of exporting companies listing the United States as one of their top export destinations and
- 15 per cent of exporting companies export to the UK, with 14 per cent exporting to New Zealand.
Sixty five per cent of all companies surveyed reported profits in 2013. Of companies surveyed, however, only 36 per cent met their profit expectations.
Uncertainty in economic conditions is reflected in a more conservative outlook for ICT sector profitability. Nevertheless Victorian ICT companies were far more optimistic about their own prospects with 71 per cent expecting to improve their profitability over the next two years.
Innovation and growth
It is estimated that in 2013, Victorian ICT companies spent around 13 per cent of gross revenues on R & D, compared to 12 per cent in 2012. The main focus of innovation activities was the development of new products and services, reported in 56 per cent of responding companies, up from 52 per cent the previous year. Only 2 per cent of companies reported that they were not involved in innovation activities, down from 5 per cent in 2013.
Looking to the future
ICT companies report a range of factors as barriers to company growth, the major one being the cost of doing business (identified by 72 per cent of respondents, up from 66 per cent the previous year). Forty-seven per cent of ICT companies report global economic conditions as a barrier to growth and 59 per cent of ICT companies rate domestic economic conditions as a barrier (up from 54 per cent in 2013).
Forty-two per cent of companies named access to skilled employees as a barrier; however 82 per cent of Victorian ICT companies reported they were able to access the skills they need for current operations. Fifty two per cent named cost of research and development as a barrier while access to finance was seen as a barrier by 47 per cent of companies.
Technology developments were seen as key enablers of growth with cloud infrastructure singled out as a driver of products and services by 63 per cent of respondent companies along with data as a service (63 per cent) and the National Broadband Network (37 per cent).
ICT Industry Survey approach
Industry research conducted in March 2014 captured information from 309 Victorian ICT companies about their employment profile, revenues, products and services, operations, export activity and innovation. The results were supplemented with data from the Australian Bureau of Statistics and other industry sources.
To find out more about the Victorian ICT Industry Survey please contact the Department of State Development, Business and Innovation on firstname.lastname@example.org.
De-identified data is also available at www.data.vic.gov.au