Australia’s ICT dynamism is opening new opportunities in the information economy.

Technology, ingenuity and a strong commitment to economic reform have driven vast increases in Australia’s productive capacity and economic performance during the last two decades. This dynamism is opening up new opportunities in the information economy in Australia.

Australians have seized on information and communications technology. With 8.7% of GDP spent on ICT products and services in 1999, Australia was surpassed only by Sweden, New Zealand and the UK (as ranked by the OECD).

Business adoption of information and communications technology is approaching saturation. Virtually all medium and large businesses are connected to the internet, as are 70% of small businesses.

Australia is among the world leaders in secure e-commerce capability, placed second only to the USA in the Economist Intelligence Unit’s E-business Readiness Rankings.

Australia has radically transformed its economic environment to make it more business and investment friendly. The Australian ICT sector grew by more than 30% between 1995/6 and 1998/99, to include 18,000 specialist ICT firms.

Australia has the third highest availability of IT skills in the Asia-Pacific region (World Competitiveness Year-book 2000) with Australians ranking as one of the most technologically literate people in the world. In addition, immigrants from more than 160 countries provide a strong multilingual element to Australia’s ICT skills base. This is reflected in the large number of multilingual call centres based in Australia.

A booming economy
The Australian economy has been a star performer over the last 10 years. The country’s rapid adoption of information and communications technology, together with the hard work of economic reforms, have been behind its high growth – about 4% annually through the 1990s. The Reserve Bank of Australia estimates that about one third of Australia’s surge in productivity growth has been generated through growth in ICT use. Despite the current global economic downturn, the OECD has predicted (in November 2001) that Australia’s high economic growth rates will continue. These estimates place the expansion over the next year at 3.2% – more than three times the OECD average and more than four times the currently predicted rate for the United States.

A new pro-business environment
The Australian Government is committed to establishing Australia as a leading player in the global information economy. Economic and regulatory re-forms over the last 20 years have made the environment more favourable to business development. Critical changes include a flexible labour market and competition in key infrastructure sectors.

Australia now has a competitive telecommunications market and one of the most competitive bandwidth pricing regimes in the region, ahead of countries such as Singapore and Japan.

Australian time zones facilitate business transactions with Asia – global companies can also use Australia as a base for research and product development operations, switching between countries to enable 24-hour operation. With the recent connection of a 640-Gbps fibre-optic cable between Australia and Japan, as well as the 120Gbps Southern Cross fibre-optic cable linking Sydney to the US mainland, Australia’s international telecommunications infrastructure and capability are world-class.

Australia’s programme of economic and regulatory reform has also delivered a growing venture capital industry, an intellectual property system supporting innovation, and a ‘light touch’ regulatory environment for ICT. Greater focus is being placed on entrepreneurship and assistance for start-up firms. In October 2001 the Government announced new rules that will introduce tax concessions to non-resident investors, including endowment funds and venture capital fund-of-funds vehicles from certain countries, including the United Kingdom.

Australian ICT Centre of Excellence John Rimmer, Chief Executive Officer, National Office for the Information Economy (NOIE) The Australian Government has committed A$129.5m for the establishment of an Information and Communications Technology Centre of Excellence. The ICT Centre of Excellence will be a world-class research and research training institute that significantly enhances Australia’s ability to create and exploit ICT. John Rimmer, Chief Executive of Australia’s National Office for the Information Economy, says the ICT Centre’s role will extend beyond its own walls to help spread technology skills. “The whole point of the Centre is capability building,” he says. “It’s designed to be a magnet for the recruitment of world-class researchers. It’s also designed to be part of a growing cluster of R&D in order to produce the next generation of high-level researchers, practitioners and teachers.” The creation of the ICT Centre of Excellence is being overseen by an advisory panel of prominent Australian business people and academics, with a number of eminent international researchers from Scotland, Germany and the United States assisting the selection process. The Australian Government will announce the successful operator of the ICT Centre of Excellence by June 2002. Website: www.noie.gov.au/ictcentre

The Australian advantage
In addition to a significant ICT market, Australia offers a unique combination of advantages. Geography is a key factor – providing a stepping stone for companies based in Australia to the large ICT markets of China and Japan, and several emerging markets. Its multicultural ICT workforce gives Australia unique ties to the region.

Research costs are internationally competitive. Investment by multinational companies in ICT R&D has been a hot spot over the past three years, reflecting their perception of Australia’s technological strengths and availability of ICT skills. To name just a few – Ericsson and NEC both have key R&D centres in Melbourne, Canon in Sydney, and Motorola in Sydney and Adelaide.

Australia has several world-class research organisations that support new technology development, including the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the Defence Science and Technology Research Organisation (DSTO), and Centres such as the Australian Photonics Cooperative Research Centre (CRC). Key areas of strength include quantum computing, wireless, information systems, speech recognition and photonics.

The country’s 39 universities generate the skills and training to sustain rapid industry growth. In recognition of the essential role of educational institutions, increased funding has been allocated to schools and universities for the development of skills and innovation in the areas of ICT, mathematics and science skills.

The supply of skills is further fuelled by Australia’s immigration arrangements. With no quotas on the number of skilled individuals that can be sponsored into the country, the net result has been a gain during the 1990s of around 55,000 scientists and engineers – a big boost to a country with a population of 19m. In 2001, special arrangements were introduced to accelerate visas for people with ICT skills.

UK companies such as BAE Systems, BT Australasia, Invensys, Logica Pty Ltd, and Logical Networks Pty Ltd have invested significantly to take advantages of the opportunities available in Australia and the Asia-Pacific region. The Australian Government encourages global companies to form strategic partnerships that will assist the development of a dynamic and globally competitive Australian ICT sector.

Many Australian companies are making their mark with ICT in the world market. Some emerging global companies are ERG (smartcards), Computershare (share registry system), Mincom (mining software), Pracom (software) and Aristocrat Leisure (gaming machines), exporting to Europe, Asia and North America.

A bevy of rapidly-growing smaller companies are also at the leading edge of ICT innovation. Key areas include microchip design, wireless transmission, encoding and decoding, security, mobile applications, voice over IP, optical communication and advanced networks.

To enhance the competitiveness of Australian industry, the Commonwealth Government announced a A$2.9bn innovation action plan in January 2001. Significantly for ICT, the initiatives provide a major injection of additional funding for Australia’s research and innovation. A centrepiece is the establishment of a world-class ICT Centre of Excellence (see panel). Other initiatives enhance the incentives for businesses to undertake R&D. In particular business will have access to a premium tax concession rate (175%) for incremental expenditure on R&D.

Article supplied by the National Office for the Information Economy (NOIE), Australia’s lead government agency for information economy issues. For further information, contact:
Telephone: +61 2 6271 1222
Fax: +61 2 6271 1780
Email: info@noie.gov.au
Website: www.noie.gov.au