Think Tank: The online economic dividend

• 19 March 2009
• Page 1 of 3 : single page

The Panel

• Ian Birks, chief executive officer of the Australian Information Industry Association
• Stephen Collins, founder of social media consultancy acidlabs
• Senator Stephen Conroy, minister for broadband, communications and the digital economy
• Rob Fitzpatrick, director of commercialisation at NICTA, a government agency that supports ICT innovation
• Senator Nick Minchin, shadow minister for broadband, communications and the digital economy

Online economy

How could investing in online technologies and capabilities make a difference to the economy?

Ian Birks: Investing in online technologies means building new infrastructure for the future, rather than spending the same money replenishing the old – the returns will be exponential. At a basic level, these are the technologies and capabilities that allow us to diversify our existing resource-based economy and compete successfully in the increasingly global knowledge- and services-based economy. Innovation is the key to that market, and technology is the key to widespread innovation. These investments will also drive productivity and employment.

The Information Technology and Innovation Foundation in the US recently conducted a study demonstrating that an investment of $30 billion in American IT infrastructure across three key areas – electronic healthcare, broadband rollout and smart energy grids – would directly lead to the creation of over 900,000 jobs; more than half in small business.

(from top) Ian Birks, Stephen Collins, Stephen Conroy, Rob Fitzpatrick, Nick Minchin

Rob Fitzpatrick: Information and communications technology (ICT) overall contributes between 40–60% of our underlying economic growth. Online technology is a subset of that. It enables accelerated, efficient flows between businesses and a channel to customer markets.

Online has developed so fast that we are still learning ways to connect, ways to grow value. How can it make a difference to the economy: speed, accuracy, efficiency of transaction, reach and connectedness. Online technologies allow us to reach billions of people while making each one feel they are being talked to individually.

Reach enables us to connect rural and regional communities with the broader economy, and overcome Australia’s tyranny of distance. It also ups the ante on policy makers to accelerate infrastructure to ensure we can retain some comparative advantage throughout the global financial crisis and beyond.

Stephen Conroy: Long-term infrastructure investments are essential to drive productivity and secure prosperity for the years to come. This is certainly the case with communications infrastructure and is exactly why the government is engaging in the National Broadband Network project. Industry players and commentators have noted the vital importance of this nation-building initiative as we navigate the emerging economic storm.

Nick Minchin: During this extremely difficult period of the economic cycle, where job creation is paramount, the opportunities presented within the ICT sector and online environment generally are ripe for new investment and further innovation.

I think the online world will become increasingly attractive to individuals and small enterprises, through its lure of self-employment and small business opportunity. At an entry level it can be a very affordable way to create and do business.
On a broader scale the technologies are evolving at such a rapid rate that new opportunities are quickly emerging and are only limited by one’s capacity to innovate. Online diagnostics, records and data storage are areas for future growth, and, of course, e-commerce, including retailing, service provision and the like, also provides scope for further economic stimulus and jobs creation.

Targeted investment in new infrastructure, including technology, has a direct stimulatory effect through jobs creation and the like, but also provides opportunity for ongoing economic stimulus through the actual use of the infrastructure. This is an area where Government has a role to play, but obviously the private sector is a key driver and Government can help facilitate further growth by removing unnecessary impediments to investment.

Stephen Collins: I think we need to create, somehow, an incubator and investor culture, as well as a physical place that people can do business in the same way it’s done in the US. The scale of Silicon Valley is probably out of the question, but something more like Austin, Texas where technology, creativity, the arts and general business ‘big thinking’ is encouraged would be great for Australian start-ups.

Investment priorities

Where should such investments be focused for maximum result? Is that where they’re going now?

Conroy: The National Broadband Network is a critical infrastructure platform for Australia’s participation in the digital economy. The digital economy promises many opportunities for growth and development. It opens up entirely new markets for existing businesses, as well as new, more efficient ways for businesses to serve their existing customers. It creates new ways for citizens to organise and have their say, and new ways for Government to respond, and deliver, public services.
Broadband infrastructure is a vital enabler for this emerging environment. It is the infrastructure foundation for digital innovation, and the platform for new and emerging services.

Infrastructure investment has been sorely misplaced. We have made clear that our investment priorities should: lift national productivity, drive Australia’s international competitiveness, develop our cities and regions, reduce greenhouse gas emissions, and improve the quality of life for all Australians.

Broadband fits all of these criteria. Investing now will help Australia manage the current and emerging global economic conditions.

Fitzpatrick: Yes, not just at some basic level of 12Mbps, but at true global broadband rates. Not just main infrastructure, but through to the dataport in the wall by each of our computers and with wireless broadcast capabilities to allow mobile interoperability. And not just this essential enabler, also applications and services sitting over the top, and powerful engines that lie below and maximise the efficiency and effectiveness of our burgeoning connectedness.