Technology

ICT & e-commerce

BLAST breakthrough International ICT companies are making technological breakthroughs from their Australian bases. Lucent Technologies’ R&D arm, Bell Labs, achieved a 3G wireless ‘first’ at its Sydney centre, developing MIMO (multiple input/multiple output) chips capable of data reception at a blazing 19.2Mb/s, almost eight times current rates. The chips, designed in collaboration with researchers at Bell Labs in New Jersey, use BLAST technology (Bell Labs Layered Space-Time), and are the world’s first chips to successfully implement MIMO for handsets with four antennae. They will enable higher-quality, higher-speed mobile services for greater numbers of subscribers.

A vast land of open spaces, a country located far from many of its major trading partners – little wonder that Australia has so rapidly moved to leverage the international advantages of state-of-the-art communications and information technology.

Australia is connected through an extensive IT backbone infrastructure; thousands of kilometres of copper and fibre-optic cable are complemented by satellites and wireless base stations. And this advanced and competitive telecoms infrastructure comes with some of the lowest subscription fees in the world.

Innovators and early adopters
The Australian culture of innovation and early adoption makes it easy for industry here to keep pace with the speed and pervasiveness of global technological change. Australia ranks highly against other developed economies on most indicators of internet access, cost and usage – online sales have increased 43% in a single year, with both businesses and consumers adopting e-commerce as a viable and trusted sales channel.

Business expenditure on ICT R&D grew by 14% per year from 1996/97 to 2000/1, more than three times as fast as overall R&D spending.

Competitive cost base
This base of knowledge and IT skills is backed by a competitive tax environment, low operational costs and proximity to growing IT markets in Asia. All of these reasons have made Australia an attractive location for companies including Avaya, IBM, Nortel, Microsoft, Citrix, Lucent Technologies, Symantec, Computer Associates, American Express, Fuji Xerox, IBM, RSA Security and Motorola. No other country in the region can match Australia’s breadth and depth of ICT opportunity.

A growing industry
In proportion to GDP, Australia’s ICT market is currently ranked third in the world. It grew by 26% in the two years to June 2001, and a Microsoft white paper released in April 2002 predicts at least 45% further growth in the Australian market between 2001 and 2005.

As at June 2001, more than 22,000 ICT businesses in Australia directly employed about a quarter of a million people, with the value of domestic ICT production (A$50bn in 2000/1) representing nearly 8% of Australia’s gross domestic product.

The industry’s larger players are mostly foreign multinational corporations attracted by Australia’s investment environment, but these are complemented by Australian-grown companies such as Telstra, Computershare, Altium, Keycorp, Tower Software and Technology One. Yet some of the biggest breakthroughs have come from the smallest start-ups, demonstrating the scope of opportunity in Australia.

Indeed Australia’s ICT industry is dominated by small and medium-sized enterprises (SMEs). ‘Microfirms’, with up to four employees, account for 82% of firms and 14% of employment. Large firms are strongest in telecommunications, whereas small companies still perform well in areas such as computer services and consultancy, with strong niche positions in some software sub-sectors – Vertical Applications in particular.

Creating clusters: Sydney’s Australian Technology Park will welcome NICTA, a new Centre of Excellence

Clustering
Smaller ICT businesses obviously benefit from cooperation with other firms, while larger firms, including multinationals, often cooperate with strategic local partners. The resulting ‘clusters’ of ICT activity have produced regional networks around Australia (and a strong capacity to build more). Examples of existing activities include:

• clusters of ICT activity in South Australia focused on defence and electronics activities, built around the Defence Science and Technology Organisation (DSTO);
• computer/video games clusters in Victoria, Queensland and the Australian Capital Territory;
• e-security activities in southern Queensland;
• a world-class photonics cluster in Sydney; and
• an emerging e-learning cluster in Tasmania.

The IBM Tivoli Centre on the Gold Coast is another example of ICT clustering; the company expects the laboratory to generate an additional A$50m in exports over the next five years, and recently created a further 65 jobs for software developers at its Security Software laboratory, increasing the total number of staff to 100.
Such multinational corporations are a significant part of Australia’s ICT business activity, some having been major contributors to the Australian economy over many years. Australia’s open markets and competitive investment environment welcome foreign firms, recognising their potential positive impact as large users which can stimulate local-firm growth, provide links to export markets, and provide a flow of knowledge into the Australian economy through new technology and skills development.

Australian innovation
Along with the work of Australian facilities operated by companies like Alcatel, Fujitsu and NEC, Australia’s homegrown firms can boast their own impressive record of innovation. From the country that brought you the black-box recorder, the pedal-powered radio, the pacemaker and the cochlear ear implant, Australian researchers are now producing leading work in fields like quantum computing, software, wireless networks, photonics, Internet II, VoIP, robotics and nanotechnology.

Image-modelling. Melbourne-based Vision Control International developed an image-modelling program in the 1990s to help police reconstruct faces, speeding identikit sketching from four hours to 20 minutes. The technology is now used in 15 countries.

Resource planning. The resources sector has been particularly active in IT solutions that have proven export winners. Mincom is just one company that has used its knowledge of asset-intensive mining, oil, gas and defence industries to develop tailored solutions, including Enterprise Resource Planning and a B2B management
system. Mincom now serves customers in more than 40 countries from 14 offices worldwide.

Smart exports: Hong Kong’s transport system uses ERG’s Octopus cards

Smart cards. Perth-based ERG has grown to become a world leader in smart cards, fare management and transport transit systems, designing and building the ‘Octopus’ system. Hong Kong’s MRT public transport system uses Octopus cards throughout, and ERG has also installed smart ticketing systems in Berlin, Singapore, Melbourne, San Francisco and Manchester. Octopus cards can be used on multiple modes of transport, most public payphones, vending machines, and even in some shops.

Cards is another Australian company exporting smart-card technology through its Arterium software. Arterium offers platform independence between various card payment platforms, including Multos, Open Platform, JavaCard and Smart Card for Windows. Cards is a company heavily focused on exports, selling to markets in Taiwan and Japan.

Games. In the games area, Canberra-based Micro Forté, supported through funding from the Australian government, has developed BigWorld Technology, which allows thousands of people to play in the same online game simultaneously. Micro Forté has formed a first-party publishing relationship with Microsoft Game Studios for the creation of an exclusive Xbox game to be published by Microsoft.

Research strengths. International companies, too, are making breakthroughs from their Australian bases – Bell Labs’ BLAST technology, for example (see panel p71). Or in Queensland, where a joint venture between Saab Systems and Brisbane City Enterprises is developing traffic control systems for around the world.
Meanwhile, the key government science research organisation, CSIRO, has recently embarked on a major new ICT initiative by establishing the CSIRO ICT Research Centre, which will be a whole-of-CSIRO focal point for ICT research. Its primary task will be to develop and sustain an inter-nationally-competitive CSIRO ICT research program, focusing effort into a limited number of research areas in order to enable a world-competitive effort in each.

Exporting knowledge Can Australia become a ‘knowledge exporter’? After riding on the sheep’s back, then building up our manufacturing and services sectors, will Australia end up exporting ideas and knowledge to the world? According to new ABS data published by Allen Consulting, Australia has seen a change in trade in know-ledge services in recent years. In 1991/2 Australia ran a significant trade deficit in knowledge-based services – A$2.4bn. Just seven years later, however, Australia enjoyed a trade surplus of A$55m, and currently runs a knowledge surplus in education (which has been maintained since 1991-92) and in finance and insurance services.

A wider brief
ICT has, of course, a broader role in solutions beyond its own industry. As an enabler of transformation in
business, government, and society, ICT products and services underpin the development of Australia.
Recognising this, and also that technology may not drive itself to perform such transformations, the Australian government supports a wide range of ICT initiatives aimed at providing a policy environment to encourage IT strategies from individuals, firms and governments.

In April 2003, the government report Enabling our Future laid out recommendations under an ICT Framework for the Future which was announced in February 2002. The report highlights Australia’s commitment to:

• sustained government and industry leadership to build the profile of ICT in Australia;
• a world-class ICT R&D base with a focus on commercial outcomes and collaboration;
• a skills capability base;
• a secure communications infrastructure with broadband connectivity;
• a supportive environment for innovative ICT businesses;
• development of a culture of risk-taking and innovation; and
• effective and coordinated approaches to e-Government.

New ICT Centre of Excellence
One major initiative is the establishment of a Centre of Excellence, called NICTA (National ICT Australia).
Its mission is to build Australia’s ICT research capability via the four pillars of research, education, commercialisation and linkages. The four founding partners of NICTA are the Australian National University, the University of New South Wales, and the governments of New South Wales and the Australian Capital Territory, supported by the University of Sydney, Bovis Lend Lease, Redfern Photonics and Allen & Buckeridge.
The ICT Framework for the Future builds upon the previous A$2.9bn Backing Australia’s Ability innovation statement of early 2001, and integrates with other broad policy activities, including the Strategic Framework for the Information Economy (SFIE), the Electronics Industry Action Agenda, and other federal and state government initiatives.

These initiatives are complemented through other funding – for example the BITS Advanced Networks Program which supports broadband networks for R&D.

Australia’s ICT industry is a unique combination of international cooperation, homegrown innovation and government support, and is set to continue its development of groundbreaking technologies and export growth.

Websites:
www.austrade.gov.au
www.investaustralia.gov.au
www.dcita.gov.au
www.noie.gov.au