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Digital economy to contribute 7% of Australia’s GDP

Besides improving living standards, digital technologies could also lead to a resurgence of manufacturing in Australia

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Australia will achieve the prosperity and wage increases it seeks only by driving deeper adoption of digital technologies among businesses and the public sector, according to a top government official.

Speaking at the launch of the Digital Pulse report for 2017 by the Australian Computer Society (ACS), Angus Taylor, assistant minister for cities and digital transformation, said the country’s digital economy would be worth A$139bn (US$104bn) by 2020, accounting for 7% of gross domestic product (GDP).

Taylor said digital technologies remained crucial to the government’s agenda, with more than 600,000 people now employed in the infocom sector.

The ACS has a list of 13 policy recommendations, including strengthening Australia’s cyber security capabilities, which it believes are important for Australia to be a digitally prosperous nation.

Now in its third year, the ACS’s Digital Pulse report provides interesting data on trends. “For the first time, we have very clear statistics that the digital economy is contributing hugely to Australia,” said ACS president Anthony Wong.

Based on new economic modelling, the report noted that each Australian will be better off by A$4,663 (in 2016 dollars) thanks to the adoption of technology that not only improves workforce productivity and quality of products and services, but also reduces prices.

The digital economy is currently contributing A$79bn to Australia’s GDP, according to John O’Mahony, a partner at Deloitte Access Economics, which prepared the report for the ACS.

O’Mahony said that although the higher living standards expected from digital adoption would be about half of that delivered by the last mining boom, digital transformation was here to stay, and not just part of an economic cycle.

“We are in the middle of a digital boom in Australia, but it is somewhat of an invisible boom compared to the mining boom,” he said, adding that improvements in living standards must be visible to the average Australian, or continued investment in technology might be challenging to sell politically.

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O’Mahony called for continued IT investment, not least by the government itself. “There have been a few high-profile disasters in the last 12 to 24 months, but the government has to be brave,” he said. “To go slow because of the census and robo-debt is not the answer.” He was referring to the failure of Australia’s online census system last August and the error-riddled Centrelink automated debt recovery system.

The Australian Information Industry Association (AIIA), which represents the country’s technology industry, welcomed the ACS report, saying it largely aligned with what the industry was seeking.

AIIA CEO Rob Fitzpatrick said: “As always, the issue is about execution. What are the few things we need to focus on that will really shift the needle? The AIIA continues to work with the government to translate policy objectives into real, tangible actions.”

Fitzpatrick said these efforts were currently centred on R&D tax incentive, using procurement reform to promote digital government, cyber security and the 457 visa reforms.

The report also identified technologies that would benefit Australia the most: artificial intelligence and machine learning, 3D printing and additive manufacturing, blockchain, genomics, the internet of things, robotics, drones, self-driving cars, virtual and augmented reality, and wearables.

Telsyte analyst Rodney Gedda called for enterprises in all sectors to take better advantage of emerging technologies, which could have “surprising results” for Australia, even leading to a resurgence of the manufacturing industry or innovation in waste disposal.

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