Besides having experienced a dramatic decline in IT jobs during the past five years, Sydney is also fast losing ground as Australia's IT hub, according to a study conducted by Monash University's Centre for Population and Urban Research.
Researchers Bob Birrell, Ernest Healy and Paul Smith analyzed data from the Australian Bureau of Statistics and found a decline of nearly 16,000 computer servicing jobs in Sydney since the turn of the millennium, compared to a decline of about 2,700 jobs in Melbourne.
And while Melbourne has maintained its national share of about 27 percent of all IT jobs in Australia, Sydney's national share has dropped from nearly 41 percent in 2000-2001 to 34 percent this year.
Healy attributed the nationwide decline in IT jobs to a number of factors, including millennium bug fears and the Sydney Olympics in 2000, which could have led to a boom, and subsequent collapse, in the employment of IT staff.
The July 2000 introduction of the Goods and Services Tax in Australia could also have contributed to the boom, as most companies had to either install new accounting programs, or modify their existing business software to be able to conduct business under the new GST regime.
In addition to GST and the millennium bug, which are expected to have affected all Australian cities similarly, Sydney has also experienced a decline in population growth and a move towards the outsourcing of IT services, which Healy said could be contributing factors to its loss of national share of Australian IT jobs.
"I suppose in the first place, there does tend to be a higher concentration of high-end servicing jobs in Sydney relative to the rest of the country," he said.
"[But] Sydney is no longer accounting for as big a part of the total number of computer services people that it used to; part of that absolute decline might be due to ... Y2K, GST and offshoring. But the decline in national share may be simply to do the fact that the population is growing rapidly in other parts of Australia, whereas the population growth in Sydney has slowed right down."
Rapid population growth in Queensland with the development of the Brisbane Hinterland region, and a resources boom in Western Australia are expected to have lead to the two areas now accounting for a much larger proportion of computer services personnel than in the past, Healy said.