Going for gold: Why Australia’s digital competitiveness is off the pace

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We are now less than a month away from the Olympics in Brazil. There’s a high national expectation that Australia should finish the medal count in the top 10 at these Games – as we have at each Summer Games since 1992.

Our achievements are even more significant if you think about our relatively small population, geographical isolation and short colonial history. Some of us credit our Olympic achievements to large and sustained investments in elite sporting excellence. Others point to our Aussie punching above our weight spirit. Either way, most of us hold our underdog status as a badge of honour.

The time has come to bring the same kind of focus and determination to outperform larger and longer-established nations to Australia’s global digital competitiveness.

Our workforce is currently facing an age of reformation to meet the challenges and opportunities of a digitally enabled economy – most recently associated with the fourth industrial revolution. Our future is digital. Racing ahead of the pack will help us build a prosperous future for our economy and society.

However, the latest data shows Australia is instead slipping behind. The World Economic Forum (WEF)’s 2016 Global Information Technology Report assesses the factors, policies and institutions that enable a country to fully leverage ICT for increased competitiveness and well-being. These are boiled down into a single number: the Networked Readiness Index.

Australia’s Index ranking has fallen from 16th place in 2015 to 18th in 2016. The top ten are pulling away from us.

Some have responded by asking: Shouldn’t we be content with being in the top 20? Surely there are only marginal differences that separate us from the others in the top 10?

This is not the way we treat the Olympics! And unlike the Olympics medal count, the complex WEF ranking is based on a wide range of factors that have direct impacts on Australia’s wealth and wellbeing – from the quality of our infrastructure to the ease of doing business. The gap in real-world impacts between a WEF ranking in the top 10 and one outside of the top 10 can be quite significant.

So should Australia give up and settle for 18th place? No. If anything, our digital ambitions should be even higher than our sporting achievements. The disadvantages that stack the odds against us in the world of sport – small population, physical isolation – are significantly diminished in the world of digital.

Look at smaller countries like Luxembourg (population: 600K) and Singapore (population: 5.5m). Our population is almost four times larger than these two countries put together. And yet these two countries are in the top 10. Clearly size does not guarantee success, as we’ll see below. And a top 10 goal for Australia isn’t just possible: we’ve actually done it before, in 2004 when we ranked 9th in the world.

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While Australia cannot match some of the advantages other nations enjoy, such as Luxembourg’s better access to international bandwidth, there is much that we can learn from other countries to get into competitive shape.

For example, the following are some of the features of the top 10 countries that the WEF identified in its report:

  1. Singapore: “strong government commitment to the digital agenda”
  2. Finland: “extremely good access to the latest technologies as well as venture capital, and its businesses are highly connected”
  3. Sweden: “businesses are taking advantage of the fact that their consumer base is highly connected”
  4. Norway: “firms are capitalizing on the high ICT literacy among the general population and workforce by using digital technologies heavily in their interactions with consumers as well as among each other”
  5. US: “extremely favourable business and innovation environment, which has given rise to one of the most agile and digitized business sectors globally”
  6. Netherlands: “businesses are extensively deploying digital technologies to reshape their business and organizational models”
  7. Switzerland: “high business technology absorption and innovation capacity and high levels of digital B2B interaction”
  8. UK: “business adoption [of ICT] is high and UK businesses are top in the world in making use of the Internet to interact with their consumers as well as with their production network”
  9. Luxembourg: “government is perceived to play an important role in supporting Luxembourg’s digital economy, with business executives attesting to a high importance of ICTs in the government’s vision and its success in ICT promotion”
  10. Japan: “business and government [ICT] usage already among the highest globally”

As can be seen, both government and industry have roles to play to advance the digitally enabled economy. And six of these top 10 countries are already seeing significant economic benefit from high levels of business ICT adoption.

For Australia to climb up the overall rankings, there are clear priorities for business and government. Businesses need to lift their ICT usage (currently 24th place) and uptake of new ICT into their operations (ranked 22nd). Governments can also increase ICT usage (ranked 22nd), increase the efficiency of public services through ICT (currently 42nd), and encourage ICT as a means to enhance Australia’s growth prospects (ranked 47th).

Not surprisingly, the broad economic benefits of ICT are yet to be fully felt in Australia – we are ranked 23rd on economic impact. Interestingly though, we are closer to leadership in the use of ICT-related government social services to deliver a positive social impact (ranked 9th). The rankings are further analysed in Ai Group’s Australian summary.

Our Olympic performance is put to the test every four years. Our digital competitiveness is tested every day. As the WEF says, “new technologies are driving winner-takes-all dynamics for an increasing number of industries, getting there first matters.”

After years of half-hearted competition, Australia needs to rise to the digital challenge – and go for gold.

Looking at the stand-out features of the top 10 countries listed above, where do you think Australia suffers greatest by comparison? Please leave your ideas, experiences and comments below.

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Innes Willox
Ai Group Chief Executive since May 2012, Innes joined as Director International and Government Relations in 2008. Prior to this he held a number of senior roles in both the public and private sectors: Australian Consul General to Los Angeles (2006-08); Chief of Staff to Minister for Foreign Affairs, Alexander Downer (2004-06); and Manager for Global Public Affairs, Singapore Airlines (2000-04). He began his career as a journalist, with his positions including Chief Political Correspondent and Chief of Staff at The Age.

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