Google earmarks $1b investment in Australia’s digital economy

Google Investment Australia
Google Australia MD Melanie Silva meeting PM Scott Morrison

Appearing to set aside earlier grievances with the Federal Government, tech juggernaut Google has announced a five-year, $1.2 billion commitment to help boost Australia’s digital economy, including local investments in cloud infrastructure, tech talent building, and the establishment of localised Google Research Hub.

The Digital Future Initiative will, according to a report commissioned by Google, support upwards of 6,500 direct jobs and a further 21,000 jobs indirectly across Australia, with the bigtech set to deliver $1.26 billion in direct investment.

Google estimates the deal could offer a $6.3 billion boost to Australia’s economy, made up of direct and flow-on macroeconomic impacts from the Initiative, as well as resultant benefits from R&D programs.

Among the three core Digital Future Initiatives include: investments in digital infrastructure – and most notably boosts to its local cloud regions in Sydney and Melbourne; a new Google Research Australia hub to build a pipeline for “local tech talent”; and new partnerships with local researchers, including the national research agency, the CSIRO, to explore initiatives in clean energy, quantum computing and AI technologies.

Speaking at a virtual event in Sydney, where the deal was announced, CSIRO chief executive Dr Larry Marshall, praised the investment from the bigtech, believing it would “supercharge our emerging innovation ecosystem, which is passionate and world-class, but still small and fragmented, hindering our national delivery of real solutions from science”.

One-third of its $1 billion promise will be directed to enhancing “digital infrastructure”, Google said, including additional resources for its newly opened Melbourne cloud region, launched in mid-2021; Melbourne plays host to Australia’s second Google cloud region after the inaugural Sydney hub, which opened in 2017.

Investments in additional cloud infrastructure in Sydney and Melbourne, it said, would ensure the maintenance of “sub-second latency”.

“Low latency services ensure near-instant access to files and information stored digitally, the faster processing of online payments, and more generally, enhanced access to real-time information and the ability to respond instantaneously to rapidly changing data.”

The bigtech also plans to boost its engineering headcount over the next five years, “including high paying advanced technology jobs such as skilled engineering, computer science and AI roles”.

“Combined with other growth across Google, this increase in STEM headcount would bring the number of Google employees in Australia towards 2,500 FTEs [full-time employees] within the coming years.’’

Around $200 million will be directed to R&D partnerships, most notably with the CSIRO as well as local universities, and its dedicated Google Research Hub (GRH), expected to add “$1.5 billion in net present value terms over 10 years”. The location of the GRH is yet to be announced.

“Google Research Hubs are at the core of Google’s worldwide research activities. Google maintains significant computer science, AI, and machine learning research capabilities across the globe, including at its research hubs in Bangalore, Zurich, New York and Accra,” the report noted.

Areas of research currently being explored with the CSIRO include energy, natural hazard management and food waste. The bigtech noted that it has already partnered with the CSIRO to help map the incidence of the Crown of Thorns starfish on the Great Barrier using AI and machine learning.

While establishing a number of partnerships with local universities to support the advancement of quantum computing technologies, Google said it would “substantially increase these investments in the coming years”.

Despite a fallout with the Morrison Government earlier this year following negotiations around the News Media Bargaining Code, which mandated payments to news organisations for the redistribution of their proprietary digital content, Google’s planned $1 billion investment in the country appears to offer some level of reconciliation between the pair.

Report author, Henry Ergas AO, said the investment “is an important vote of confidence in this country’s economic and social future”.

“Above and beyond the direct effects, that vote of confidence, by one of the world’s most highly respected enterprises, should help place us on the path to a full and prompt recovery from the pandemic and facilitate our smooth adjustment to the stresses and disruptions which lie ahead.”