A €33 billion investment to build submarines in Adelaide, South Australia has led to a mushrooming of technology companies experiencing unprecedented organic growth.
The project, awarded to French shipbuilding company DCNS, starts this year and will last five decades, providing an opportunity for investors to jump in at the beginning of a lifetime venture that will need technology inputs from all sectors.
The biggest defence spend in Australia’s history is making Adelaide the place to be for the next 50 years and canny companies and investors are getting in quick before the rest of the world profits from the potential.
Once a center for automobile manufacturing, South Australia has had to diversify its economy and is now a state full of SMEs, many of which are startup technology companies with an interest in defence solutions.
According to the Australian Bureau of Statistics, South Australia has more than 2,000 computer system design companies, of which 750 are small tech startups ripe for investment.
Established companies like Codan, a radio and metal detector company, started in Adelaide and have spread worldwide, while international companies such as BAE Systems, Austal, Boeing and Babcock have established regional headquarters in Adelaide in conjunction with the national Centre for Defence Industry Capability.
Feeding into these multinationals are SMEs such as APC technology, Cresta Plastics, Jumbo Vision and Finetech – companies that have diversified to supply the defence industry.
Adelaide has become a hub for these startups not only because of the organic growth offered by the burgeoning defence industry, but also because it offers big city infrastructure alongside boutique city lifestyle – the Economist Intelligence Unit has ranked Adelaide the 5th most livable city in the world and the best in Australia for the past five years.
A recent study of office affordability by JLL found that Adelaide offered the same quality space for a third of the cost of Sydney or Melbourne, and labour costs are at least 9 percent lower than the rest of the country.
The city, which is the only Smart Lighthouse City in Australia, has also pledged to become the first 10 Gig City in the country. It is already linked up with other Gig Cities in the United States such as Chattanooga.
The French submarine contract has shifted the state’s focus to welcoming more French companies to set up in Adelaide. South Australia’s recently launched French Engagement Strategy outlines the opportunities for investment with “suppliers along the value chain”.
His Excellency Christophe Lecoutier, the French Ambassador to Australia, said there were many opportunities for education and scientific cooperation between France and Australia.
“The challenges for research and training linked to the construction of the submarines are significant and offer a fantastic opportunity to develop new collaborations,” he told the South Australian-French Tertiary Education and Research Workshop in Adelaide last week.
To help foster these collaborations the South Australian government has established Investment Attraction South Australia, an agency tasked with helping investors establish themselves in the state.
The agency, a sponsor of this week’s Futur en Seine technology festival in Paris, can help any companies wanting a head start in Australia’s hottest investment market.
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