How We Can Use Technology to Improve Productivity

11 December 2009
By Katie Lahey

Chief Executive, Business Council of Australia

Treasury Secretary Ken Henry has identified the information and communication technologies (ICT) revolution as one of the four long-term forces affecting the Australian economy.

The Business Council of Australia also places high importance on the effective use of ICT by our businesses, governments and households as a driver of future prosperity.

The announcement of the proposed $43 billion National Broadband Network (NBN), providing fast transmission speeds to Australia’s businesses and households over fibre, has elevated discussion on how using ICT more effectively can lift productivity. Along with the rapid development of Australia’s wireless broadband networks, the NBN has the potential to contribute to innovation, productivity and economic growth.

The council anticipates the $53 million NBN implementation study, due in early 2010, will resolve a number of important questions about the Rudd Government’s policy objectives. These include what is the most cost-effective and timely way to roll out broadband networks, and what are the preferred settings for wholesale market competition. It should also clarify how the potentially conflicting role of government as provider and regulator in this sector will work.

It makes sense to start thinking now about how we can get productivity gains out of the NBN when it eventually comes on-stream. We should not be distracted, however, from also achieving the full benefits from the advanced technologies that are with us now, and from the changes we can make to improve ICT efficiency ahead of the NBN.

The federal government’s Realising our Broadband Potential conference being held in Sydney today and tomorrow is well-timed to consider these challenges in some depth. The conference offers a perfect opportunity to put some definition around the benefits that underpin the rationale for the NBN investment. It also provides an opportunity to identify the policies we will need to drive productivity from the use of ICT now, as well as in the future.

There are potential productivity gains from better using fixed and wireless bandwidth available now as well as the many ICT products we have access to such as personal digital assistants and new generation telephones, software applications and the rapidly expanding scope of the internet. We should also remain focused on how we can overcome any barriers that exist in our current regulatory or policy settings that are preventing us from reaching our full potential in the lead up to the NBN’s introduction.

A key area for discussion should be our policy and regulatory frameworks. Policy settings directly impact on the ICT-enabled growth of industries such as health and education. An effective transition to ‘e-health’ and ‘e-education’ demands a shared policy agenda across federal and state governments to support the greater use of electronic networks for information management and delivery of these key services. It will also require government actions to establish national standards, update certification processes, implement national privacy legislation and provide seed funding for pilot projects. These are policy initiatives that we can move ahead on now and are largely unrelated to bandwidth availability.

While services sectors such as health and education are often singled out, we should remember that ICT-enabled process and product transformations are an important way for all businesses to compete, as has been highlighted by the Productivity Commission. This extends from the automation of production and better targeting of mineral deposits via GPS in the mining sector to the use of satellite technology to guide and control spraying and cultivation equipment in agriculture.

It is therefore important that we continue to set economy-wide policies that enhance Australia’s competitiveness. Seamless and competitive national markets will encourage businesses to use ICT to innovate to meet the needs of consumers. Trade and investment liberalisation will continue to give Australian businesses access to the latest technologies around the world. The development of ICT infrastructure and our skills base will provide the inputs that businesses need to compete at home and abroad.

Again when it comes to skills we need to think broadly. While technical skills will be in high demand, it will be better business and management skills that will enable our workforces to identify opportunities from new technologies and leading-edge practices both here and overseas, and implement new production methods successfully.

Finally, we need a competitive and efficient telecommunications sector into the future so that businesses and consumers can source low-cost and high-quality fixed and wireless broadband services.

The Realising our Broadband Potential conference is an opportunity to bring together thinking on the objectives and future potential of the NBN as well as ways to make the best use of communication technologies available in the meantime. Policy that supports the best use of technology available now will stand us in good stead to reap the rewards from higher bandwidth in the future.



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