Opening Remarks to the Digital Economy Forum
FRI 05 OCTOBER 2012
I think it's very appropriate that we've gathered here at a university, the places where so much of our destiny in the 21st century will be written, as much as the mines and gas fields to our north.
Just last week, a major breakthrough in quantum computing that will open up whole new opportunities in areas like drug manufacturing and materials design was announced in the journal Nature.
That breakthrough wasn’t made at MIT or Stanford, but right here at UNSW.
So I’m very proud to be here today, and I thank the Vice-Chancellor, Professor Fred Hilmer, for his generous hospitality.
It is also, I think, quite symbolic that we've gathered in this beautiful building - the Scientia Building – the Latin world for 'knowledge' because that is why we are here today.
The commodity most precious in the 21st century, more valuable even than iron ore, is knowledge.
The way we create and share knowledge will be a key determinant of our success in the Asian Century.
It seemed not so long ago that thinkers like Barry Jones were counselling us to be ready for the digital future.
That future is here.
It is well and truly here.
In a range of visible and invisible ways, it’s already integrated into all of our lives, and into our nation’s economy.
Economic activity directly related to the internet contributed $50 billion to the Australian economy in 2010, but the indirect effects are just as important.
These effects aren’t captured in GDP figures but they’re worth an extra $80 billion a year.
Like the social connections the Internet age can bring to those confined at home through disability or illness.
The benefit to a working parent of ordering groceries online and having them delivered to your door.
Or pregnant women wearing foetal monitors that can be monitored remotely by midwives to alert them to any problems.
It's certainly made my life easier.
For a century, each Prime Minister used to lug his Cabinet papers home in a bulky folder that would have felled a forest worth of paper over a year. I slip an iPad into my brief case.
I’m sure that everyone in the room could tell a story about how digital technology has changed things for them.
We’ve seen some extraordinary gains made so far.
Last year, there were 11.6 million internet subscribers in Australia, an 11 per cent gain on the previous year.
But there isn’t an industry that won’t benefit from finding more effective use of digital infrastructure.
A recent report by Deloitte Access Economics found that one-third of our economy will be significantly affected by digital-driven change in the next three years.
It would be a change on the scale of the tariff cuts of the 1980s, with the biggest impact to be felt in the retail, finance and media sectors.
So we have to be ready to take advantage of these opportunities, and that’s why I’ve called this Forum today.
Nothing is more important to the success of Australia’s digital economy than building the NBN.
Not only building it – but doing it right, upfront.
The NBN is what the economists call a ‘public good’.
One of those projects like the Transcontinental Railway, the Sydney Harbour Bridge and the Snowy Scheme that creates a wealth of indirect benefits beyond those that can be calculated on a spreadsheet.
Business recognises it.
In fact the Chairman of Google, Eric Schmidt, has said of the NBN, "The decision to have universal fibre access is one of the most important decisions the Australian government has made… investing in the national broadband infrastructure at this level is probably the highest leverage investment that the country can make because it touches so many aspects of the society."
I’m pleased that we have Google represented by Nick Leeder here today.
The NBN will help Australians to exploit the digital economy by boosting productivity and creating new opportunities.
First to productivity – or working smarter.
We all know that the application of new technologies and digital innovations can improve the quality of our products, and reduce the cost of producing them.
Every nation ahead of Australia in the Global Competitiveness Index has the universal access to broadband that the NBN is going to provide.
Through better exploitation of the digital economy we can increase the output of both our capital and our labour, and make Australia more competitive.
The productivity improvements that the NBN will provide are absolutely essential for Australia, as they are for every developed nation.
Because if we can’t compete on quantity with developing nations that can provide ten times the number of workers for the same price, we will compete on quality.
With quality skills, and quality infrastructure, we’ll be better able to take advantage of the opportunities that come our way.
And there will be opportunities, some predictable, others not so much.
As the digital economy continues to alleviate the tyranny of distance, barriers to overseas markets will fall for Australian producers of goods and services.
As economies in our region develop further, demand for Australian goods and services high up the value-add chain will increase, particularly as internet penetration increases.
As well as opening up new markets to existing industries, further exploitation of the digital economy will create entirely new industries that none of us have imagined yet.
I’m not exactly sure what all the benefits of fully utilising the digital economy will look like.
No one is – and that’s the point.
You just have to be ready, with the skills and infrastructure in place to create and capture change.
What I do know is that the digital economy will bring money, jobs and sustained prosperity to Australia.
The direct contribution of the internet to GDP is expected to grow from $50 to $70 billion by 2016 alone.
But we have to work closely together to get the benefit.
If we don’t collaborate to get to the front of the digital pack, we’ll see our competitiveness decline, jobs move elsewhere, and our overall prosperity reduced.
The National Digital Economy Strategy that the Government released last year outlined eight goals to reach by 2020.
The goals we’ve outlined aren’t things that can be achieved just by new spending or the enactment of new legislation.
They require an economy-wide effort.
Government will provide enabling infrastructure, and seek to give Australians the education and skills they need to work in innovative Australian firms.
We want to equip Australians in their work to produce the new ideas, new products and new ways of working.
So today I’m looking forward to sharing ideas about how we can ensure that Australia remains at the cutting edge of the global digital economy.
About how business and government can work together on these important challenges.
In particular, how we can work together to improve digital literacy and ICT skills in Australia.
We’d also like to hear from you about what barriers you might be experiencing in exploiting the digital economy.
But today is not just a discussion between government and business.
Today is also an opportunity for participants in the forum to share their experience, for business to learn from business.
I encourage you all to listen closely and gain from one another’s experience.
Today is not just a one-off discussion either.
It is my hope that we will take the significant ideas tabled here today, refine them further, and that we continue to consult together on them.
In helping to start that conversation today, I urge you to share your views frankly and freely.
And after we leave here room today, I urge you all to carry on that conversation with your stakeholders and with the Government.
By doing so, you contribute to the future of our digital economy and help make Australia a winner in the Asian Century.