Digital innovation could deliver $315 billion in gross economic value to Australia over the next decade, according to a new report released today.
But first Australia needs to work out how to take advantage of the opportunity which has largely passed it by in the past.
The report, Digital Innovation: Australia’s $315b opportunity from AlphaBeta and commissioned by Data61, states that in the past, “aside from some pockets of success, Australia has failed to capture the same economic value from digital innovation as other countries.”
According to the report, in advanced economies digital innovation has created enormous value globally and accounts for around 11 per cent of GDP, amounting to an annual value of $6 trillion. So far, Australia hasn’t been able to capture these benefits or build digital industries at the same scale as comparable countries.
The report noted Australia has captured a third less value than its advanced economy peers: the total economic value derived from digital innovation in Australia represents 7.4 per cent of the country’s total GDP over the past two decades. This compares to 11.2 per cent of GDP in advanced economies.
Despite 26 years of economic growth, Australia needs to increase productivity and find new sources of export competitiveness to secure the economy’s future prosperity, the authors argue.
“Every sector of the global economy has been re-defined as a result of digital science and technology and the extensive use of data,” Adrian Turner, CEO at CSIRO’s Data61, said.
“This next digital wave to revolutionise existing industries and create entirely new ones is ours to capture. But the opportunity is perishable if we don’t collectively take action now.”
Turner argued unlocking the value of data and combining it with domain expertise in areas like healthcare, agriculture and mining meant Australia “can create an unfair advantage.”
Indeed the report argues Australia shouldn’t attempt to emulate Silicon Valley, but should play to its strengths, by applying digital technologies to existing industries.
“Digital innovation is critical to improving our nation’s productivity and sustaining economic growth. It’s not just about creating the next Google or replicating Silicon Valley,”AlphaBeta Director and report author Dr Charlton said.
“Rather, almost half of economic benefit from digital innovation comes from the adoption of new technology across existing industries.”
The report identified eight high-potential opportunities for Australia in digital innovation, set to be worth $155 billion annually in the Asia- Pacific region over next decade: precision healthcare, digital agriculture, data-driven urban management, cyber-physical security, supply chain integrity, proactive government, legal informatics, and smart exploration and production.
Economic value is created through productivity gains and new revenue streams from emerging industries, products and services.
The report acknowledged other opportunities will emerge as new technologies such as quantum computing develop and mature.