Are ASX Tech Stocks on a Long Term Growth Path?
Team Veye | 21-May-2023
ASX Tech Stocks
The Australian tech sector, after running topsy turvy since June 2022 came into focus recently when it started making consistent gains. In last week alone, it grew by more than 3.6%
Any country’s technology sector is integral to the country’s economy, playing a vital role in contributing to its progress and economy. Australia’s tech industry has seen a rapid growth in recent years. Global demand for innovation and search for newer solutions to persisting long time problems has played a major role in the growth.
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Why Australia is Better Placed for Investing in Tech Sector Stocks?
Australia has a motivated workforce, fast acquiring skills, supported by its universities that rank among top 100 globally. The country is unique in attracting talent and investors alike, which has led to creating vast opportunities.
Australia’s technology sector is now estimated to be at $167 billion and is the third largest contributor to GDP in Australia, though behind mining and finance but ahead of health and construction.
Australians are tech-hungry consumers who welcome innovation. Ranking fourth in the world for digital consumption, its faster digital adoption having led to economic growth of 26% between 2020 and 2021. Australia with its tech credentials make this sector the fastest-growing area for skills growth.
Stocks to Watch in the Tech Sector
Australia has about 600 edtech companies with $2.2 billion edtech market where 50% of companies are early-stage start-ups. In early January 2023, it also had 551 agritech start-ups with $800 million invested per annum via Rural R&D Corporations, its 8 innovation hubs had received more than $100 million investment for innovation adoption.
ASX tech stocks offer a stable and potentially lucrative investment opportunity for long-term growth. With options of investing in startups or established companies, investors can take advantage after carefully weighing risk reward ratio.
As per Export Council of Australia, technology is already, the country’s fourth-largest export sector. It was worth $8 billion in 2018 and could more than double to $19 billion by 2030.
Advanced and developed economies like the US, the UK, Singapore and New Zealand have brought large research and development (R&D) fiscal-stimulus programs suggesting that similar countries could witness major opportunities in their domestic technology industries. And Australia is fast emerging the front runner.
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