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Copyright© 2002, Australian Computer Society Inc.
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National Library of Australia Cataloguing-in-publication data:
Australian Computer Society.
ICT Development in Australia: A Strategic Policy Review
Bibliography.
ISBN 0 90992 599 2
1. Information Technology. 2.
Communications
3. Policy. 4. Australian Computer Society
As we move into a new century, Australia's ability to harness ICT for the collective national benefit has been questioned.
The Australian Computer Society commissioned Professor John Houghton from the Centre of Strategic Economic Studies to draw together the most recent performance data on Australia's participation in ICT as both a user and producer. ACS also asked Professor Houghton to review the various Australian government policy initiatives implemented since the first pro-active ICT programs were applied in the mid 1980s, and provide a perspective of the current gaps in ICT policy.
Professor Houghton has brought these two inquiry paths together into a strategic policy framework for ICT. The result is a three-tiered strategy that groups over 50 detailed policy options and priority actions. The three interdependent elements of that strategy are:
Platform for Production - support to stimulate Australian-based production in both ICT producing and using industries
Building Businesses - initiatives aimed at enterprise improvement, finding ways to expand and develop Australian firms, creating linkages between companies and forming enterprise clusters
Achieving Scale Through Investment - creating the competitive environment in Australia for foreign ICT investment.
Our objective in releasing this report is to raise the level of debate among the key stakeholders and influencers - ICT companies, ICT professionals, institutions and public policy makers. Clearly, bold policy initiatives are necessary to address current negative trends.
Professor Houghton's report warns of decline in a range of economic measures of national ICT 'well-being':
at the end of the 1990s there were fewer ICT manufacturing businesses in Australia than at the beginning
employment in specialist ICT industries has been in decline in the latter years of the decade
Australia has been spectacularly unsuccessful in growing medium to large indigenous ICT companies, despite nearly two decades of policy support
ICT equipment exports are now lower than they were at the beginning of the 1990s
our reliance on overseas ICT has ballooned, producing a trade deficit of around $16 billion in 2001
our ranking on a range of OECD national technology penetration measures has seen Australia slip down the OECD country pile.
In March 2002, at the World Congress on Information Technology in Adelaide, Prime Minister Howard announced the formation of an important industry-government-institutions advisory group to develop an ICT Framework For The Future. The ACS has welcomed this initiative and now offers this report as one of the first detailed contributions to the Framework process.
We would also like to see this debate extend beyond industry boundaries and become a public issue. The reality is that what we do or don't do in relation to ICT over the next five years will impact on the wealth and well-being of all Australians.
Richard G. Hogg
President
Australian Computer Society
June 2002
The Commonwealth Government recently established a Broadband Advisory Group and a joint industry-government advisory group to develop an ICT Framework for the Future. The Australian Computer Society (ACS) welcomes these initiatives. As an input to discussions the ACS commissioned a review of policy reports in order to distil and synthesise the key strategic directions and policy suggestions emerging from recent analysis. Our aim in releasing this summary is to contribute to policy debate. We seek to build on what has already been learned and achieved, and to move forward by building consensus for a bipartisan approach to the development of ICT in Australia.
Major insights
Recent policy reports contain a number of insights, which provide an essential input if we are to learn from experience and build on past achievements. They include:
Australia's information and communication technology (ICT) industry is not fully competitive - because of small local firm size, because Australian capital markets are not competitive for technology companies (beyond early stage financing), because there is limited electronics production, and because multinational firms tend to be oriented to the domestic market rather than exporting;1
Competitive advantages in high-technology industries around the world have been created through combinations of attracting multinational firms to establish manufacturing plants, building the national skills base, and strengthening R&D in key areas;2
It is not sufficient for Australia to be a fast user of other nations' technology: we must have leading edge capabilities so that we can develop pioneering technologies that will ensure the competitiveness of our industry in the global marketplace of the future;3 and
Australia will struggle to maintain its strong economic performance if we do not have a focused effort to continually up-date domestic capacity in ICT innovation and production. Without ICT research and production capabilities we may well lose the capability to be intelligent purchasers of ICT goods, let alone pioneers.4
Elements of a strategy
Recent policy reports have different foci and use different terminology, but certain themes are common. The key elements of a strategy are clear:
We need to take a strategic approach, which entails adopting a longer-term perspective and focussing on key points of leverage;
We need vision and leadership to energise and direct the process;
We must understand that education, skills and professionalism will be the key ingredients;
We must realise that the process will be one of continual upgrading and renewal, and commit to a coordinated and sustained business improvement program;
We must understand that investment is the key to realising outcomes, and make the investment climate and pro-active investment attraction top priorities;
We must ensure that the business environment and regulatory frameworks are supportive;
We must understand that linkages facilitate innovation, and make cluster development a focus for action;
We must ensure that policy initiatives are adequately resourced; and
We must develop a sense of urgency to drive the process forward.
This report outlines more than fifty detailed priority actions, three of which are identified as flagship initiatives.
Establishing a platform for production to support both ICT producing and using industries - by fostering innovation, developing the necessary infrastructure and regulatory framework, and enhancing skills and professionalism;
Building businesses - by fostering business improvement, enabling market access and expansion, and actively facilitating cluster development; and
Achieving scale - by creating an attractive investment environment, establishing an investment fund and engaging in pro-active investment attraction.
Government must recognise that having a local ICT research and production capacity enables rapid take-up and deployment of ICTs across the economy. It is equally important to realise that ICT production and trade play a significant role in driving employment and productivity growth. By joining with industry in providing vision and leadership, governments can underpin ICT development in Australia. By failing to do so, they can undermine it.
The ACS calls upon governments and other industry stakeholders to join forces, constructively develop and debate policy options, build on the lessons of the past and strive for a brighter and more prosperous future.
This web adaption of the foreword and executive summary of the report was prepared by Tom Worthington, 27 June 2002 from the MS-Word version. The report is also in PDF