No codes cracked: Australia’s drive to invest in new cyber technology

Australia is investing in advanced technologies to boost economic growth, national security and social cohesion. To counter digital threats stemming from these new technologies, Australian business and government are applying future-facing cyber security measures.

One driver of the focus on strengthening data security is the growing use of AI-powered threats. Australia’s 8 Artificial Intelligence Ethics Principles aim to protect the integrity of AI-based systems by prioritising data protection and security. The National Reconstruction Fund, often touted for its role in manufacturing, also has a focus in technology and defence capabilities. Australia is also participating in the International Network of AI Safety Institutes and partnering with other nations on responsible AI.

Critical infrastructure entities that provide services such as clean water, energy and transportation must also ensure the safety and security of their operational technology (OT). The Australian Energy Market Operator has an OT Program to ensure it has the operational and technological capabilities to maintain system security, reliability and resilience. The Australian Cyber Security Centre also provides best practice guidance to critical infrastructure providers.

Australia is also preparing for a future where quantum computers might crunch numbers so efficiently that current encryption could be easily cracked. The Australian Signals Directorate (ASD) is monitoring Post-Quantum Cryptography (PQC) standardisation efforts, and will update Australia’s Information Security Manual in the event of any changes.

Australia’s focus on future-facing cyber security and reputation as an early adopter offers innovative cyber firms a market in which to grow their business, and to research, develop and test new technologies.

Investors can draw from a talent pool that is among the best in the world. Our universities and research institutions are leaders in cyber development. Plus, our location puts investors in direct access to Asian markets – nations that consider Australia a regional cyber leader.

The place to surf for cyber solutions and research partners

Although Australia is the fifth most powerful cyber nation in the world¹, we’re still not immune to illegal actors online. In fact, a cybercrime is reported in Australia every 6 minutes.² Ransomware, cyber extortion, scams and digital theft are causing serious damage.

Australian businesses are taking action to protect their data, assets and operations. According to Gartner, organisations are expected to spend almost A$6.2 billion on information security and risk management in 2025 – a 14.4% increase from the previous year.³

Australia is a great market to grow a cyber security business, and undertake research and product development. Our cyber ecosystem is expected to grow from the current 315 firms, to 500 by 2030. Fifty per cent of cyber companies are already exporting,⁴ including Australian cyber firms QuintessenceLabs, Sekuro and Airlock.

Australia’s cyber industry has strong capabilities in:

• infrastructure security
• system security
• software and platform security
• attack and defence systems (Australia is ranked first for defence capabilities)⁵
• professional services and training.

Australia’s focus on future-facing cyber security offers innovative cyber firms a market in which to grow their business, and to research, develop and test new technologies.

International investors taking advantage of Australia’s expertise include global cyber security leader Fortinet, who opened its first Innovation Hub in the Asia-Pacific region in Sydney. The A$75 million facility reflects Fortinet’s growing presence in the Australian market, where business has tripled over the past 5 years.

Microsoft is collaborating with the Australian Signals Directorate (ASD) on an initiative called the Microsoft-Australian Signals Directorate Cyber Shield (MACS). The initiative aims to improve protection from cyber threats for Australian residents, businesses and government.

Australia also offers research partnership opportunities for investors seeking to capitalise on our strong track record of innovation, including across the space and quantum fields. San Francisco-based Arkose Labs conducts R&D for global clients from its office in Brisbane, Queensland.

US-based MITRE set up its first international applied research centre in Australia. The MITRE Centre for Information Integrity & Defence has cemented Australia as a prime location for space, defence and cyber security in the Asia-Pacific region.

Australian universities are also partnering with global organisations on cyber R&D. CISCO and the University of Canberra have established a cyber innovation hub to validate cyber security technologies, develop prototypes and de-risk the adoption process. UNSW is working with UK’s National Cyber Security to develop and deploy the seL4 microkernel.

A rich talent pool of cyber professionals

Australia’s growing cyber workforce means investors can find the talent they need to grow globally. Our talent is comparable in scale to competitive cities. Around 125,800 people were employed in the Australian cyber security workforce in 2022. More than 50,000 are dedicated roles. Talent is also cost-effective, thanks to industry and government co-investment in cyber skills development. 

Australia is also developing the cyber workforce of the future. Government and industry are collaborating on cyber skills programs. Australia has 22 universities offering 62 cyber-specialist degrees. Vocational education institutions also offer high-quality cyber security courses.

Trusted cyber security hub for Asia Pacific

Australia is an ideal market to develop and deploy product innovation centres, security operations centres and hardware testing centres close to Asia. An Australian base also provides time zone benefits for global companies maintaining a 24-hour cyber security footprint. US cyber threat intelligence provider Recorded Future has established an Australian office as a bridge to Asia.

Australia’s strong geopolitical alliances also boost our global cyber capability. Australia is part of AUKUS, a trilateral security partnership with the UK and the US to support a secure and stable Indo-Pacific. Australia is also a member of the Quadrilateral Security Dialogue (QUAD) with the US, India and Japan. As a trusted partner and leader in regulatory reform, Australia can play a key role in influencing and shaping regional cyber policies.

A regulatory framework that supports cyber investment

Australia’s supportive regulatory framework makes us an attractive market to develop and deploy cyber solutions. The federal regulatory framework drives cyber market growth by addressing risk management and consumer privacy objectives.

The Australian Government has legislated positive cyber security obligations for businesses deemed ‘critical infrastructure’, across 11 industries. The obligations require over 2,000 businesses to develop a risk management program to address cyber security. Recent high-profile cyber breaches have also led to increased penalties for businesses that do not sufficiently protect customer data.

These obligations will drive cyber uplift among key businesses in the economy. 

Incentives to support innovation

The Australian Government provides programs and incentives to support cyber innovation. They include:

• REDSPICE program: A$5 billion for industry under a program that aims to triple the Australian Signals Directorate’s cyber security capability and double its cyber hunt activities.
• The Critical Technologies Challenge Program provides grant funding to support solutions to market-led challenges.
• The National Reconstruction Fund has A$1 billion to finance development of Australia’s industrial capabilities, including digital technology.
• The Defence Industry Grants Program, which provides funding for small to medium enterprises that can assist with Australia’s sovereign cyber capabilities and competitiveness.
• R&D Tax Incentive: a refundable tax offset for companies to support investment in innovative R&D. According to Deloitte, Australia’s R&D Tax Incentive is globally competitive for loss-making cyber startups with aggregate revenue under A$20 million.
• State-based incentives: Selected states offer payroll tax relief and employment subsidies to support employment in cyber to help boost domestic cyber security capability. Austrade can help investors find the most appropriate visas for their needs.

Find out more about Australia’s cyber security industry.