Martin Duursma is a Partner at Main Sequence Ventures. Prior to Main Sequence Ventures, Martin co-founded Datapac Australasia and then went on to become a senior executive at Citrix after it acquired Datapac. Martin shares his predictions on where Australia’s next breakthroughs in energy, advanced manufacturing and space lie.
What are Australia’s biggest industry opportunities right now?
We have a number of industry opportunities here in Australia. We’re starting to see a growing acknowledgement of the opportunities in energy and manufacturing.
Since COVID-19 hit, there’s been a lot more emphasis on low emissions. Renewable energy has become more important in people’s lives and we certainly have opportunities in Australia to leverage these trends. We could be using more renewable energy in general as well as become a net exporter in energy, especially in hydrogen.
We have a natural advantage because we have a lot of renewable energy available through wind and solar and other things, and we can use that to produce renewable hydrogen. That can then become an export opportunity and we can export energy in the form of hydrogen to countries in Asia. South Korea and Japan have indicated that they would like to take hydrogen from Australia. So I think decarbonisation is an opportunity for us.
That then flows into other area like transportation. For example, if we have a developed hydrogen industry, we could see how that could be applied to trucking and transportation. You would decarbonate and make interstate travel much more efficient. That’s one area where there’s a lot of opportunity for Australia.
The other one is in manufacturing, especially advanced manufacturing. In COVID-19, reliance on global supply chains has become fractured. A lot of countries have focused on local situations. In an Australian context, we have the opportunity to set some national priorities around growing our local manufacturing capabilities using high technology. For example, using automation and robotics to efficiently manufacture. Especially in a pandemic, we need to rely on our own manufacturing capability and not just global supply chains.
You’ve done quite a lot in space investment. Is there an opportunity there for Australia?
I view the space industry as a sunrise industry in Australia.
We formed the Australian Space Agency a couple of years ago, with a goal of tripling the size of the Australian space industry by 2030. There’s a lot of opportunity there. We’re starting to see more application around things like earth observation. For example, having satellites monitoring the environment leads to better efficiency in agriculture.
We’re also seeing a number of companies around space-based communication. For example, satellite IoTs let us understand what’s happening in our environment and what’s happening in farming. These are all applications that space-based technologies allow us to achieve.
Australia has traditionally been underrepresented in the space industry. While we’ve played an important role historically (from the very beginning, we were involved in communications in the Apollo program) we now have an opportunity to get more involved in the commercial side of the space industry.
We have natural advantages here. We have a big country, so there’s a lot of opportunities around launch. For example, we have a number of organisations proposing and/or in the process of building launch facilities in Australia. With our large coastline and a lot of water around us, it’s an ideal location to launch rockets and satellites from.
What do you think are Australia’s biggest economic challenges over the next few years?
It’s probably around workforce training. There are a lot of industries that are changing and as such people need to be retrained into new industries. There’s a strong workforce training element that’s important in the economy.
There are also structural changes. For example, the university sector is undergoing massive change. Their business models are changing with less international students, which means that we’re going to see quite a large exodus of individuals from the university sector.
By some accounts, we’re talking up to 20,000 people leaving the university sector over the next year or so. That’s a highly skilled set of people. They’ve typically got multiple degrees and deep expertise. How do we tap into that talent?
There’s a generational opportunity here. Lots of researchers are looking for new opportunities in the commercial world. How can we connect small businesses to them? New staff can give those businesses a competitive advantage.
What skills should the Government be focusing on?
It depends on the industry you’re looking at. It’s hard to draw a generic statement here. People need easy access to micro-credentialling, where they can undertake short courses and adapt skills based on technology trends. Those are the types of things that are important going forward.
Do you think Australia will have jobs available for people after they have been re-skilled?
It’s hard to tell. A lot of these predictions have proven to be incorrect because things are moving so fast. People have based their predictions around models which have changed, and so many industries have suffered sectoral change. For example, if you look at what has happened with the airline industry, there’s been massive disruption.
Look at food and hospitality. Restaurants have had to be more efficient because you can’t have too many customers inside restaurants due to social distancing restrictions. That’s forcing the adoption of new technologies, different business models and innovation.
One of the most interesting observations we can make is that when there is a crisis of any sort, that drives innovation. One of the challenges that we’ve had in Australia is that we have had so many years of economic growth and it takes a health shock like this to make people accelerate hard on innovation.
It’s innovate or perish.
If you don’t innovate, the way you do business and approach customers will not work any more. It also remains to be seen what new growth areas of industry will emerge.
I could conceive that the airline industry will have to reinvent itself because of the different load factors or different ways that people want to travel in a post pandemic world. Every industry is reinventing itself and figuring out how it will serve its customers in this new world.
There are two industries that you mentioned are huge opportunities for Australia: energy and manufacturing. Taking what you’ve just said about industries reinventing themselves, how will energy and manufacturing have to reinvent themselves going forward?
On energy, there’s two sides. On one side, Australia can be a larger net energy exporter of hydrogen. On the other side, Australia can adopt it in the transportation sector. For example moving cars, trucking and transportation onto hydrogen as a fuel source.
With manufacturing, it’s about becoming more efficient with automation and robotics. It’s about thinking from the beginning: how do I automate it from day one. It’s a different way of thinking. If you automate things, it insulates humans against a pandemic. If you have less dependency on people standing next to each other, if you think about how you lay out your manufacturing facility, you can still be in operation in future pandemics.
When we put factories together, we never considered a pandemic situation. We never foresaw social distancing or thought about how many people we could have per square meter to minimise cross contamination. The old way of manufacturing – having people in close proximity – has to change. And we can do this with more automation and better safety protocol. I don’t think this pandemic is a one off. We’re going to see more of these situations going forward.
What will entrepreneurship and business look like in the next few years?
I’d come back to my earlier point. Given that business models are changing, price points are changing and costs are changing, it’s more expensive to run a business. You’ve got to worry about whether you are doing things appropriately and safely for a COVID-19 world. That would drive you to think more about innovation and cost-saving because you’ve got to do things more efficiently.
What other risks should businesses be aware of in the future?
The world is a dangerous place from a cyber perspective. We have seen the rise of cyber threats over the last couple of years and more businesses are aware of the need to take appropriate caution.
Business owners now need to be much more aware of cyber hygiene. The challenge for business owners is finding the right cyber hygiene for your company. How do you know you have the right security in place and the right protocol to protect your business and employees? There’s a business opportunity for consulting groups to help provide cyber hygiene checks to deliver a secure workplace for their employees.
You’ve really driven home the point that Australia must “innovate or perish.” When compared to the rest of the world, are Australian businesses and industry innovating quickly enough?
The challenge that we have with innovation is the commercialisation of our research. The opportunity for Australia now is to try and get closer linkages between industry and research. We need to try and have more of a semi-permeable membrane between industry and research.
Industry has challenges and research has the solutions.
We can reframe the conversation. It’s not that we have industry and we have research – it’s that the two work together.
I view this as an opportunity. We’re a world leader in AI and machine learning. Many universities have world leading teams and the opportunity is to connect them more to industry and show how those technologies can help accelerate capability.