This report explores the relationship between technology investment and productivity in Australian companies. It draws from several sources: the Australian Industry Group’s 2013 National CEO Business Prospects Survey of nearly 350 CEOs, facilitated discussion groups with business leaders, and in-depth interviews with innovative companies from the manufacturing, services and construction sectors. The report examines the extent of Australian companies’ investment in new technologies and research and development, the success factors and barriers involved, and the impact of these investments on productivity.
Australian businesses have been keen technology adopters over the last two decades. At a company level, this has had a positive impact on productivity, with new research undertaken for this report confirming that companies which invest in new technologies are significantly more likely to experience improved labour productivity than those that do not.
Since the Global Financial Crisis, however, business investment in new technology has been broadly flat, and further weakness looms in the short-term. Over the past decade Australia’s ranking has fallen in international measures of technology adoption and competitiveness.
Looking further ahead, business anticipates new opportunities for collaboration, innovation and productivity gains from investment in new digital technologies and infrastructure. However, despite a bipartisan political commitment to rollout ubiquitous high-speed broadband, this Report finds concerning gaps in the capability of SMEs, and some industry sectors, to take full advantage of first-rate broadband infrastructure.
Australian businesses face tremendous opportunities over the coming decades: serious investment in fixed and mobile broadband infrastructure; escalating technological innovation, particularly in the information and communication technologies; and Australia’s proximity to the growth and innovation of Asia.
Taking advantage of these opportunities will be the foundations for improvements in productivity and Australia’s standard of living. The vision provided by the National Digital Economy Strategy is a good start. But Australia is not as ready as it needs to be. And ready or not, Australian businesses will have serious challenges to rise to over the next decade. The pace of global business is only accelerating, while our population ages and the mining boom peaks. Improving productivity will be vital if Australia is to remain prosperous and competitive.
Achieving higher productivity needs a concerted effort from business and governments to break down the barriers to investment and ensure Australian businesses lift their productivity and innovation capabilities. This Report recommends significant new policy initiatives, including development of a national workforce skills strategy for the digital economy; a standing taskforce of industry and government representatives to help drive Australia’s digital productivity; and new initiatives to increase collaboration between businesses and research institutions.
With the support of the Federal Government’s Productivity and Education Training (PET) Fund, the Australian Industry Group is also rolling out a multi-year program of research and training initiatives to help businesses improve workforce productivity and performance. This report was supported through the PET fund and will help shape those activities.