Here’s what will replace the mining boom

July 31, 2013, 11:08 am Kochie's Business Builders Yahoo!7

With a bit of encouragement, this startup rich sector can smooth the Aussie economic transition...

Here’s what will replace the mining boom.

Tech.

Australia is now one of the fastest growing global crowdsourcing hubs, spitting out innovators and industry leaders, leads the world with the rate of new online stores opening up and boasts some of the biggest tech companies in the business.

To say it’s an industry with the potential to fill the big footprint of the mining industry is no exaggeration.

PwC research shows the Australian tech sector is growing so rapidly that it has capacity to contribute as much as 4% of GDP, or $109 billion to the economy, by 2033. Along the way that will directly create 540,000 new jobs.

To put that in perspective, mining and related services tipped in 8.4% of GDP in 2010.

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One tech sector already dominated by Australian outfits is the design crowdsourcing space, with the two largest players originating Down Under, 99 Designs and DesignCrowd.

“Crowdsourcing is disrupting global traditional design industry. We’re excited to be at the forefront of this wave of innovation,” Alec Lynch, Founder and CEO of DesignCrowd says, who just notched up $10 million in projects commissioned.

“We’ve seen demand for our design services double in the last six months with businesses wanting to crowdsource everything from logo and business card design to t-shirt and app design.”

And it’s the ease of starting up that Bigcommerce co-founder Eddie Machaalani says is allowing everyday entrepreneurs like Lynch to become global leaders from the garage.

“Just a few short years ago, entrepreneurs needed a five-figure budget to launch a professional online store, but today all you need is a few hundred dollars and a few hours,” Machaalani.

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And that’s exactly how DesignCrowd went about it.

“In our first year, DesignCrowd was run out of the garage and we made $20,000 of sales,” Lynch says. “We now do that in a few hours, and soon we'll be doing more than $1M of projects a month.”

There are currently around 1,500 firms in the Australian tech sector, ranging from one or two person startups created in the last 12 months to more established businesses.

And that's to say nothing of ASX-listed medical tech giants like ResMed and Cochlear. Again, booming industry leaders.

One speed bump to growth is that 3 out of every 4 tech start-ups are targeting the information media and telecommunications sectors, when huge opportunities abound throughout the local economy.

But while PwC’s research forecasts might appear a bit ambitious, they’re certainly not out of reach.

To hit the $109 billion mark by 2033, Australia needs to draw 2,000 more tech entrepreneurs each year from the existing workforce, and in the long run for our education sector to produce more skilled tech entrepreneurs.

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What that requires is more investment in the sector. To provide a yardstick, Australia currently invests approximately US$7.50 a head in venture capital per annum, compared to the United States (US$75) and Israel (US$150).

Whether that investment comes to fruition or not, Lynch certainly remains optimistic about the outlook for Australian tech.

“Maybe it’s a coincidence; maybe it’s a rare example of Australia realizing its potential in tech; or maybe it’s been helped by Australia’s proximity (and affinity) with Asia.”

“Either way, Australia appears to be taking a leading and global role.”

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