What a week! Investors are bailing out of technology stocks and several companies are seeing the need for new leadership. Things change quickly in this industry.

Innovation and ICT uptake in Australia are highly dependent on the e-skills of the workforce. However, evidence is pointing to growing e-skills gaps. The transition to a knowledge-based economy is making education and training a lifelong process rather than a one-off activity.

What are the key aspects to building a vibrant ICT industry in Australia? Some of the common characteristics for a vibrant ICT industry seem to be

1. An educated and willing workforce,
2. Some key academic centres of excellence,
3. A stable business environment,
4. A strong and flexible communications infrastructure,
5. A good climate for investment for start-up activities, and
6. Strong leadership.

But then we don't have to be perfect. On the one hand it is a high-growth industry and on the other it is also now a global industry. Because of the rapid pace of technological development, if we are to keep up we must make sure that public opinion, and investments in R&D, education, literacy, and leadership do not stand in the way of technology implementation. That said, Australians must benefit from our advances in technology and ensure we are able to exploit technology regardless of its sophistication.

The factors affecting ICT spending today include economic conditions, business environment, corporate culture, senior systems installed, vertical market growth, and many others. Together they constitute a shifting mosaic of influence over ICT budgets.

The challenge for all ICT vendors is survival; how do they get from today's economy to tomorrow's? Vendors can't manage their companies the way they have in the past and hope for survival. It's not that companies have been poorly run; it's just that the rules have changed too quickly for some of the older vendors.

Strong local leaders are now essential to build an effective organisation around values and work styles. In terms of who will win, the jury is out as there is a lot of innovation now reaching markets. Established vendors that broaden their portfolios will influence the rest of the market and cause other vendors to follow suit. Acquisitions, too, can influence the market as well as customer purchasing decisions, while the move of a CEO can lend a new found level of expertise to a formally inconsequential vendor.

Len Rust is publisher of The Rust Report