Australia ’s superannuation system—a compulsory and well-regulated retirement savings framework—has evolved into a major institutional investor poised to drive growth in deep technology sectors. With assets under management exceeding A$4.1 trillion, these funds possess both the capital and long-term investment horizon needed to fuel innovation in deep tech.
The advantage of super funds as long-term capital providers
Superannuation funds have unique features that make them ideal backers for deep tech ventures. These characteristics set them apart from traditional investors:
- Built for the long haul: Superannuation funds operate with inherently long investment horizons, enabling them to back illiquid, high-growth sectors like deep tech over extended periods.
- Scale and sustainability: Their massive, sustained inflows—such as A$3.2 billion each week—provide the stability required for patient capital deployment.
Deep-Tech: A natural fit for super fund capital
The relationship between deep tech’s needs and superannuation funds’ capabilities is particularly strong. Here’s why they are such a good match:
- Strategic alignment: According to Damian Kassabgi, head of the Tech Council of Australia, deep tech—encompassing areas like quantum R&D—demands long-term support, a need well-matched by super funds.
- Untapped potential: Kassabgi also estimates that channeling just 1% of superannuation into tech and innovation could inject over A$30 billion into the sector.
Institutional momentum and global reach in Australia
Super funds are already playing an active role in innovation, both locally and internationally. Their involvement can take several forms:
- Backing through established channels: Australian super funds are investing indirectly in startups via VC firms like Blackbird Ventures. Notable participants include AustralianSuper, Hostplus, HESTA, and Aware Super.
- Diversification into digital infrastructure: Global managers such as Macquarie Asset Management facilitate super fund investments in AI-supportive infrastructure—like data centers and fiber networks—in the US.
Policy & productivity impacts
Beyond funding, superannuation investments influence the broader economy. Recent studies highlight the following impacts:
- Call for policy reform: ASFA recommends stabilizing regulation and redefining performance benchmarks to encourage investment in long-term sectors such as advanced manufacturing and digital infrastructure—key allies for deep tech expansion.
- Productivity gains: Research by ASFA shows that superannuation investments have contributed to approximately a 2% uplift in Australia’s productivity and GDP, adding around A$2,500 in pre-tax wages per worker annually.
Challenges and future outlook for Australia
While the potential is enormous, certain barriers need to be addressed to unlock the full impact of super fund capital in deep tech:
- Liquidity and governance hurdles: Super funds must balance demands for liquidity (due to member switching) and governance constraints, which can complicate direct investments in small or early-stage deep tech ventures.
- Policy uncertainty as a barrier: Proposals such as taxing unrealised capital gains could dampen the willingness of super funds to invest in innovative, high-risk sectors.
Conclusion
Australia’s superannuation sector is exceptionally well-positioned to catalyze deep tech, thanks to its size, long-term orientation, and growing sophistication. By deploying capital strategically—whether through VC partnerships, infrastructure plays, or targeted policy reforms—these funds could become the bedrock of Australia’s deep tech future. With structural support and appropriate regulatory settings, they have the potential to transform the innovation landscape and elevate Australia’s global competitiveness.