Best ASX Tech Stocks to Buy?

How is the Australian Technology sector positioned amid existing market environment?

Technology has played a vital role since the COVID-19 outbreak. Digital technology became even more critical to Australian businesses, students, e-commerce businesses, schools, and higher education providers as they moved to the online mode of delivering services.

Although schools and offices are gradually opening, experts still believe that the trends toward digital ways of working or providing services will likely reverse any time soon.

As per the recent reports by Deloitte, home deliveries are expected to remain 25% higher than the period before March 2020. Also, it is likely that over 50% of the employed Australian workers want to maintain or increase the amount they presently work from home.

In order to meet this rising demand for digital infrastructure and services, technology workers would have a major role to play. Despite the global health crisis, there was an increase in the workforce in Australia by 33,400 over 2020 to 805,525 workers. By comparison, employment in professional industries increased 1.3%. However, the total number of people employed in Australia shrank by 1.7%.

As per ACS, Australian Capital Territory (ACT) continues to have the largest proportion of technology workers. 35,209 Canberrans work in the IT sector. This number is expected to increase to 48,662 in the coming 5 years. The annual growth of the ACT’s tech workforce is projected to be 5.5%.

About the Australian Government’s Digital Economy Strategy 2022:

Australian Government had released Digital Economy Strategy 2022, which was released with the 2021-22 budget. The strategy talks about Australia’s progress in the direction of becoming a top 10 digital economy and society by 2030. The strategy sets the framework and direction to achieve the 2030 vision.

In 2021, the first iteration of the strategy was launched and included an investment of AU$1.2 billion. An additional AU$347 million was provided last year to strengthen investment in the digital economy.

In 2022, the Government is building on these investments, with an additional AU$1.1 billion to aid the development of Australia’s leading digital economy.

Since the launch of this new strategy, some of the new actions taken were:

• AU$1 billion for Technology Investment Boost.
• AU$70 million is for establishing a Quantum Commercialisation Hub.
• AU$22.6 million to aid 5G innovation.
• AU$3.9 million for helping women shift mid-career to the digital workforce.
• Reformation of Australia’s payment system for the digital age.
• Cyber Security

On 07 April 2022, the Minister for Science and Technology declared priority collaboration areas & recognised partners for the first year of the strategic element of the Global Science and Technology Diplomacy Fund (GSTDF). The Government announced an AU$60.2 million fund to boost Australia’s science and technology diplomacy.

The GSTDF would provide the researchers as well as businesses to ensure that Australia remains at the front of science and technology innovation. It would also act as support as the country gradually moves out of the COVID-19 pandemic.

Technology Trends to drive tech future

• Data Sharing
• Cloud is going vertical
• Blockchain
• Automation at Scale
• Cyber Artificial Intelligence

Technology Sector Outlook:

As pointed out above, the technology workforce continued to increase during the pandemic period. It is expected that by 2024, there will be more than 1 million technology workers in Australia. It will increase to 1.2 million by 2027.

Experts believe that improving diversity in the technology workforce could generate significant benefits contributing to over AU$3.00 billion yearly for the coming 20 years.