When growth capital only comes with foreign ownership.
International firms maintain Australian operations because our market is large and attractive. It therefore comes as no surprise when successful Australian technology companies need to find the capital to scale, they often find it with those same companies. We fund world-class research but exclude our existing local companies, watch those same companies get acquired, and then jump up and down about our nation’s slide down Harvard’s economic complexity index.
The pattern is systematic. Cisco paid $565 million for WiFi technology in 2001. ABB acquired Darwin-based PowerCorp in 2011, a battery energy storage business managing renewable integration and grid stability in remote locations. Sandvik bought Universal Field Robots in 2024. Caterpillar is acquiring RPMGlobal for $1.1 billion. Between 2021 and 2024, Epiroc systematically acquired five Australian mining technology companies.
These acquisitions were not bailouts or buying failures. These represent strategic acquisitions of successful Australian companies with proven commercial capability. They highlight international recognition of competitive value. They recognise growth potential requiring capital.
Most importantly, this is hard evidence of what innovation policy systematically misses: Australian companies can compete in markets worth billions. They do develop globally attractive capability international firms value enough to acquire. They have to go offshore because there is a lack of support for domestic scaling.
Industry policy funds research institutions and end-user optimisation while systematically starving Australian vendors of scaling support.
International presence in Australia
The major industrial technology companies from every continent have major representation in Australia. ABB employs 1,600 people across Australian operations. Siemens, Mitsubishi, Toshiba, Hitachi maintain industrial technology facilities. Boeing and Thales serve aerospace and defence. GE provides power and automation technologies. Caterpillar, Sandvik, Komatsu compete intensely for mining equipment customers.
These firms don’t maintain Australian operations as charity. They compete because market economics justify substantial investment. When Siemens introduces automation solutions, ABB responds. When Caterpillar launches mining equipment, Komatsu counters. Commercial competition at mature scale proves market fundamentals work.
If Australia’s industrial sector as a market is large enough and attractive enough to support international technology vendors from across the globe, then our local market clearly has scale. Not theoretical viability, proven opportunity through fierce international competition across mining technology, automation, agricultural, construction equipment, energy and utilities, aerospace and defence.
Australian companies continue to demonstrate capability to compete in these markets. They develop technologies, prove customer traction, build commercial operations. The capability exists. What’s systematically absent? Scaling support enabling growth while maintaining Australian ownership.
When growth capital only comes with foreign ownership
Industry Policy funds collaborative research, with high profile partnerships like BHP and Rio Tinto to optimise mining operations. These end market operators invest millions into local research institutions developing next-generation technologies. These partnership programs connect researchers to end-users, and deliver extraordinary value.
However, there is a gap in this approach. What policy systematically bypasses? Commercial vendors translating research into products serving multiple customers globally. When Australian technology companies need capital to scale operations internationally, invest in product development, build sales capabilities, and expand manufacturing, they find international buyers, not domestic scaling support.
Radiata’s WiFi expertise now directs global wireless strategies from Cisco’s Silicon Valley operations. Mincom’s industrial software capability informs ABB’s worldwide systems. Universal Field Robots’ automation knowledge shapes Sandvik’s Swedish headquarters mining technology development. RPMGlobal’s mining software will guide Caterpillar’s global direction.
The pattern proves two realities simultaneously. First: Australian companies develop commercial capability worth billions to international firms. Second: when growth capital becomes necessary, offshore acquisition provides the accessible path.
Not because Australian markets are too small. International firms’ substantial presence disproves that. Not because companies lack capability. Acquisition values prove capability. Because systematic scaling support for commercial vendors remains absent from innovation policy.
The economic complexity relationship
Australia currently ranks 105 out of 145 countries on the Harvard Atlas of Economic Complexity, behind Botswana and Panama. The ranking continues declining.
In real terms economic complexity measures productive knowledge embedded in a nation’s products and companies, or in other words the commercial capability to translate knowledge into diverse, sophisticated products serving global markets.
Each acquisition transfers more productive knowledge to foreign ownership. While the capability continues serving Australian customers through local operations, the commercial translation benefits shift offshore. Local know-how is transferred (often poorly) to foreign headquarters, in order to build a global presence and scale.
All the time back home our policy debate focuses on research investment declining from 2.24% to 1.68% of GDP, on the need for ‘institutional coordination’ (control), or on pathways for university-industry partnerships. These do matter, but the commercial lens reveals what systematic research focus misses: we produce valuable research outcomes proven by billions in acquisition values. We develop commercial translation capability proven by international recognition. Then we lose vendors systematically because scaling support flows to research institutions, not to commercial competitiveness.
Sweden ranks 3rd on economic complexity. Germany ranks 1st. Both systematically support technology vendors to scale while maintaining domestic ownership. Sandvik, Epiroc, Atlas Copco dominate global mining technology markets from Swedish ownership. Germany’s Mittelstand companies lead industrial technology sectors worldwide. Not through larger research budgets alone, but through policy support focussed on systematic vendor scaling.
What policy systematically overlooks
Current innovation policy reflects deep research expertise that identifies real challenges requiring research investment and institutional coordination.
What is missing is expertise in commercial operations, supplier experience, and experience in international competition. This distinction matters. Scaling companies globally while maintaining Australian ownership requires fundamentally different approaches than funding research institutions or end-user optimisation.
Supporting BHP to partner with universities improves mining operations. Supporting Australian vendors to commercialise mining technology builds a global industry. One optimises a customer, the other creates market advantage. Both valuable. But vendor scaling support remains systematically absent.
In Australia today, international firms fill that role. They maintain operations, employ local talent, serve customers, compete effectively. Their local country managers also advise government on policy, while at the same time acquiring successful Australian companies when growth capital needs emerge. The pattern demonstrates market viability while revealing a major policy gap.
Australian companies need capital to scale internationally, invest in product development accessing world-leading Australian research, build commercial capabilities, and expand operations. Without systematic domestic support, international acquisition becomes the viable path. Not because local companies fail, but because they succeed! ‘Industry’ is made up of both supply and demand, including innovation. Current policy exclusively supports research as the supply side of innovation, completely overlooking and ignoring Australian companies who produce equipment, technology and services to serve global markets.
The window narrows
Every acquisition is a celebration, as it proves Australian commercial capability exists. But it is a bittersweet story, because it removes that capability from Australian ownership. Every international firm’s success demonstrates opportunity Australian companies could capture. Every research breakthrough commercialised under foreign ownership represents foregone economic sophistication.
Sweden maintains 3rd position on economic complexity while supporting technology exporters to scale domestically. Germany maintains 1st position through systematic Mittelstand support. Canada invests in resource technology vendor competitiveness. These countries recognise research excellence doesn’t maintain economic complexity without vendor scaling support.
Unlike research capacity rebuilt through investment, commercial translation capability embedded in successful companies takes decades to develop. Each acquisition removes that capability from Australian ownership. The productive knowledge shifts to foreign headquarters determining global strategies.
The current SERD review presents an opportunity to complete the policy picture. Research investment matters. University partnerships deliver value. But systematic vendor scaling support remains missing.
Australian companies demonstrating commercial capability need growth capital aligned with commercial realities. They need incentives for accessing Australian research to build competitive advantage. They need commercial assistance scaling internationally while maintaining ownership. Without this, successful companies will continue following the pathway to international buyers.
We can support vendors to access research, scale commercially, compete globally, and maintain Australian ownership. Or we can continue watching successful companies sell offshore because domestic scaling support systematically flows elsewhere while we debate research investment and institutional coordination.
The message is clear – vendor loss through offshore acquisition due to lack of local support correlates with productive knowledge transferring offshore. We are down to 105th on economic complexity, while funding world-class research which we fail to capitalise on.
The companies exist. International competition validates market opportunity. Acquisition values prove commercial capability. Comparative models demonstrate what works.
The economic stakes are too high to continue funding research while systematically losing the vendors who could commercialise it under Australian ownership.
Australian Innovation Exchange – Building the bridge from research to market