Revenue from the Australasian photonic and quantum core components goods and services industry has grown from A$6bn in 2023 to A$7.4bn in 2025, but the rate of growth is still below the global average.
The situation frustrates ANZOS President, Professor David Lancaster, who says we are competing against mature markets with significant private and public sector investment.
“We’ve got some great start ups emerging, but not enough skilled people to work for them. This is getting really serious,” he says.
“Further, Australia is at risk of devaluing our photonics expertise by separating it from quantum technologies. Countries making a commercial success of the science keep these two streams in lockstep,” says Lancaster.
Ambitious Australia
Alongside the strategic examination of the research and development system (Ambitious Australia) and new funding models, two Centres of Research Excellence in quantum technologies and two quantum related Industrial Transformation Training Centres have been opened since 2024.
The Federal Government has also introduced billions into the industry via the Critical Technologies Challenge Program and the National Reconstruction Fund.
Tech skills shortage
Against this promising backdrop, Australia is facing a critical technology skills shortage. Last month the Department of Industry, Science and Resources (DISR) dropped its technology jobs target of 1.2m technology-related jobs to be created by 2030 amid a noticeable slowdown in economy. This, despite Austrade in 2025 claiming Australia had the world’s fifth-largest quantum workforce. In the same year the DISR found international innovation indices continued to position Australia near the bottom.
“Dropping our technology jobs target feels like acceptance of defeat and doesn’t address the issue, just as more than a decade of sustained research comes to commercial fruition,” Lancaster says.
Australia has real strengths in defence, mining, health, biotech and other photonic and quantum value chains. Start-ups in these areas are popular with venture capitalists who can access the patient capital in the country’s superannuation funds.
As global competition ramps up, there is an opportunity to collaborate with New Zealand in projects, in infrastructure and across the Pacific in defence, security and to maintain sovereign capability.
Read the report here: https://optics.org.au/2026-industry-report
This article is an edited media release from Australian and New Zealand Optical Society via Scimex.