IT is currently the third largest sector listed on the ASX with 204 companies, behind materials (686) and financials (212), and IT stocks are eighth in value and fourth in volume.
The current S&P/ASX 200 Information Technology Index covers companies that provide software & services, technology hardware & equipment, and semiconductors & semiconductor equipment manufacturers - but rather than list just those companies that are part of the ASX top 200 companies, the AllTech will incorporate all listed tech stocks.
“My hope is to see IT become the second largest sector on the ASX by 2024,” Gauci said.
“The introduction of an All Technology Index is recognition of the importance and significance of the technology sector to Australia’s economy. The sector is growing rapidly and it’s time to have a standalone Tech Index as part of the ASX that includes relatively small-cap stocks.
“The AllTech will provide a good benchmark that will allow investors to see how each individual company is performing compared to their tech peers, and will also promote our vibrant and growing tech start-ups and lead to more local listings.
“The tech sector contributes 6.6% to Australia’s GDP, creates $122 billion in value, and is vital to every industry sector. Australia now has a digital economy with a tech spine running down its centre.
“Tech services exports are worth $3.78 billion with a tech trade surplus growth of over 200% from $170 million in 2017 to $515 million in 2018.
“Over 700,000 Australians are employed in the tech sector, accounting for 5.7% of the workforce, and there was an average trend growth of 2.5% between 2011 and 2018, outpacing the overall labour market growth rate of 1.7%. By 2024 the tech workforce is expected to grow by another 100,000.
“In particular, Artificial Intelligence (AI) represents an enormous opportunity for Australian tech companies which are both using and developing powerful AI technology. According to the Government’s AI technology roadmap, AI will improve productivity, create thousands of new jobs every year, help us live longer and improve our quality of life. Digital technologies, including AI, could be worth $315 billion to the economy by 2028,” concluded Gauci.