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Tuesday, 15 October 2002
Page: 5192


Senator LUNDY (7:18 PM) —I rise this evening to reflect on the loss of Ericsson AsiaPacific labs in the Australian information and communications technology landscape. The announcement earlier this month of the pending closure of one of Australia's last big research and development facilities—Ericsson's AsiaPacificLab in Melbourne—can only be described as a very sad event for Australia, our future and, in particular, the employees of Ericsson, who put their hearts and souls into their work there over many years. But it is an understatement to say that Ericsson's investment in R&D in Australia was significant. It was very impressive. But then it had real history here. Ericsson has been in Australia for over 100 years, opening up a manufacturing centre in Broadmeadow in the 1960s, and making a huge commitment to R&D in the mid-1980s. Since then AsiaPacificLab has created no fewer than 75 high-tech patents.

It is important to note that Ericsson will continue to have a strong engineering presence in Australia, with over 600 employees continuing in Ericsson's local and regional services group. At the time the lab closure was announced, the company employed over 400 of Australia's best and brightest scientists and engineers doing highly skilled, innovative and globally recognised research and development into telecommunications technologies.

I would like to take this opportunity to recognise the managing director of the lab, Mr Ric Clark, as a leader of substance in ICT in Australia. He fought constantly to ensure that AsiaPacificLab won research projects for the Australian labs over other Ericsson labs world wide. He was highly successful in doing this. He was a key contributor to building Australia's reputation as a global centre for ICT research and development, a task that is central to our nation's ability to attract and retain the interest of global companies in an era where R&D is almost as footloose as labour and the whole sector is racked by a devastating downturn.

Over the next six months or so the labs will be continuing their work on their current major projects as decisions are made about what happens next. I know that it is the primary goal of Ric Clark to work towards finding the best opportunities for his talented staff, who have immense experience in a range of ICT critical competencies. It is my hope that these people are not lost to overseas but are snapped up by other organisations dedicated to the highest quality research, development and commercialisation in information communications and related technologies. The government have recognised Mr Clark's contribution and achievements by appointing him to the board of their ICT Framework for the Future Steering Committee.

I would like to take this opportunity to give some examples of the technological contribution made by the researchers in the Ericsson labs in Melbourne. On September 11 2001 New York's phone system received its biggest ever work-out. In the aftermath of that terrible tragedy the city's phone exchanges carried a record number of calls. I have no doubt that the recent tragedy in Bali has challenged the phone systems and technology in a similar way. The fact that these phone systems withstood this pressure was thanks to technology used in those exchanges—technology that was developed in Australia by scientists and engineers at the lab.

Achievements of the lab also include developing key mobile phone technologies, work on technology which supports third generation mobile phone systems in Europe and Hong Kong, and the development of one of the call-queuing systems—the technology behind call centre phone systems the world over. This invention has been rated in the top 100 Australian inventions of the 20th century.

The lab's contribution to Australia's broader research and development environment will also be missed, as will the role the lab played in creating crucial relationships between public and private sector organisations—a key challenge if Australia is going to be a player in ICT innovation. This ability to collaborate extensively was a key strength.

The lab spent up to $100 million each year on research and development and contributed to the research efforts of three Australian universities: the University of Melbourne, the University of New South Wales and, here in the ACT, the Australian National University. It also contributed significantly to two cooperative research centres: Australian Photonics and Australian Telecommunications. In 2001 the firm sponsored the Ericsson Innovation Prize, which both this year and last year saw tens of thousands of dollars being awarded to deserving innovative Australian companies. Clearly, AsiaPacificLab played a key role in not only engaging in but also supporting research and development in Australia.

Unfortunately, the Ericsson research lab is merely the latest in a long list of foreign companies that, under the current government, have made significant reductions in their Australian investments—some have even left these shores entirely. These companies include, among others: Lucent Technologies, Nortel Networks, Alcatel, Dell, ADC Telecommunications and JDS Uniphase. These accompany further local reductions in ICT R&D, such as the huge cuts made to Telstra's research labs and the closure of the Centre for Telecommunications Information Networking at the University of Adelaide and the Centre for International Research on Communication and Information Technologies, or CIRCIT, at RMIT.

Undeniably, conditions in the global information technology and communications sectors are pretty bad. No single government could prevent this depression. It is no secret that the capital expenditures by telecommunications companies are at historic lows. We know that Ericsson has planned to cut between 10,000 and 20,000 jobs from its global work force of 70,000. It was always going to be tough to argue that Australia should keep the lab and that the home office, in Sweden perhaps, should close theirs. This situation presents a key challenge for the government.

What if Australia were the global centre of excellence—a genuine one—and the capability here were so renowned that this presented a credential that could not be resisted even by the head offices of global ICT companies? Alas, this is not the case. When times get tough, it really is the responsibility of the government to respond in the interests of the citizens. In this case, the government needs to defend Australian research and development capability in the field of ICT, and the best defence is to invest in the strongest, most robust research, development and commercialisation environment for ICT. The defence is best demonstrated by showing leadership, expressing a vision and pursuing that vision with sharp, focused industry development policies. Unfortunately, this challenge was not met by the current government.

Last month I read—quite incredulously, I have to say—the response from Senator Alston, the Minister for Communications, Information Technology and the Arts, to news that across two years Australia's ICT trade deficit had climbed by $2 billion. This means that we are importing more than we are exporting. Senator Alston said:

We shouldn't be overly concerned about it so we shouldn't put a great deal of effort into reversing it.

In other words, he is not concerned that this sector is increasing Australian debt by a billion dollars a year. Senator Alston was also quoted as saying that the reason the government should not put a great deal of effort into reversing it was that Australia does not have a comparative advantage in the production of IT. This illustrates to me—and, I think, to the rest of the industry in Australia—that the minister was not backing the industry he represents. Imagine the impression this gives in the boardrooms overseas: I can just hear people saying in those boardrooms, `If Australia's IT minister doesn't back their local capability, why should we invest there?'

This is a very important issue, and I believe that there may have been an opportunity for the coalition to champion far more strongly our capability and to do what they could to ensure that that capability is strengthened, particularly through this downturn, which has been so difficult for so many in the sector. Supporting this point, Mr Clark said:

If [Ericsson] felt Australia was just as keen, just as excited about developing a strong technology sector as it was about winning gold medals, then those sorts of things would have more influence as well.

I think that goes to the point about the need for a champion of ICT in government. The ICT sector in Australia expects government ministers, especially the minister for IT, to champion our capability and not to talk us down in the way that Senator Alston did. We should be seeing, and we need to be seeing, the government create a strategy to preserve and nurture our capability during this global downturn. If the government wants Australia to reap the benefits of foreign investment in ICT, as well as grow our own and make investments in research and development, it should be doing far more than it currently is to encourage it.

I would like to take this opportunity to personally recognise and acknowledge the contribution of Mr Ric Clark and all of the staff at the Ericsson AsiaPacificLab in Melbourne. It is a great shame that that lab will not be able to continue as it has done in the past, and I sincerely hope that those people find for themselves very stimulating employment here in Australia so that they can continue their great work and their great contribution to our future. (Time expired)