Post on 02-Aug-2018
ICT Statistics Review 2014-15
AIIA response
March 2015
T 61 2 6281 9400
E info@aiia.com.au
W www.aiia.comau
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Contents
1. Introduction 3
About AIIA 3
Overview 3
2. ICT, Productivity and Growth 5
3. Definitions 7
4. Statistical Collections 8
Current Limitations 8
Development of a Principle Based Framework 8
5. Measuring Impact 10
6. Data 16
7. Recommendations 17
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1. Introduction
About AIIA
The Australian Information Industry Association (AIIA) is the peak national body representing
Australia’s information technology and communications (ICT) industry. Since establishing 36 years
ago, the AIIA has pursued activities aimed to stimulate and grow the ICT industry, to create a
favourable business environment for our members and to contribute to the economic imperatives of
our nation. Our goal is to “create a world class information, communications and technology industry
delivering productivity, innovation and leadership for Australia”.
We represent over 400 member organisations nationally including hardware, software,
telecommunications, ICT service and professional services companies. Our membership includes
global brands such as Apple, Avanade, EMC, Google, HP, IBM, Intel, Lenovo, Microsoft, PWC, Deloitte,
and Oracle; international companies including Telstra and Optus; national companies including
Data#3, SMS Management and Technology, Hills Limited, Technology One and Oakton Limited; and a
large number of ICT SME’s.
Overview
The AIIA appreciates the opportunity to provide comments to the Information and Communications
Technology (ICT) Statistics Review, 2014-15. The Review is a welcomed initiative. It is AIIA’s strong
belief that you don’t value what you don’t measure. Compared to other industry sectors (e.g. mining,
the financial services sector, agriculture, manufacturing etc.) the measurement of the contribution
of ICT to our national economy is inadequate and requires urgent attention to improve the quality,
granularity and timely availability of data available to inform policy (at all levels of government) and
business investment decisions in a competitive global digital economy.
Currently, routine data collections are narrowly focused on the household and business use of ICT,
internet activity and broad labour market statistics. While there is no shortage of Reports that use
‘proxies’ to measure the impact of ICT, the internet or the value of the digital economy, there is no
nationally accepted and internationally aligned standard or instrument that holistically measures
either the performance of the ICT industry or the overall performance of our digital economy.
The rapid rate of change compels us to do things differently. AIIA acknowledges the difficulty of
measuring and quantifying the contribution that ICT makes to Australia’s economy. However we are
concerned that the ‘search’ for a perfect instrument coupled with the ongoing debate about the
ability (or inability) to quantify the positive impact of ICT on GDP, means Australia does not have
access to the data it needs to inform important policy and business investment decisions. As a result
it is losing precious time in understanding the investment required to leverage technology capability
more effectively to ensure continued competitiveness.
In framing this response AIIA’s view is that, as far as possible, a pragmatic approach to (i) measuring
the contribution and impact of ICT to our economy; and (ii) the way in which relevant measurement
data is collected, must be adopted.
In the absence of well delineated standardised, economic metrics, we advocate the need to identify
and agree ‘proxies’ for ICT driven growth and productivity. To the extent that these can be
benchmarked, change over time can be monitored and measured sufficiently to
inform future policy and business investment decisions.
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In responding to the Terms of Reference to the Review, our response:
Overviews the reported contribution ICT/digital technology makes to productivity;
Provides additional comments relating to working definitions;
Identifies key limitations of current ICT statistical data sets;
Recommends principles to guide development of an ICT measurement framework for the
future;
Suggests core dimensions of an ICT measurement framework, having regard to direct,
indirect and dynamic ICT impacts;
Discusses the opportunity to leverage big data and data analytics capabilities of third
parties; and
Summarises our position in a set of recommendations.
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2. ICT, Productivity and Growth Notwithstanding the absence of an international standard to measure the contribution that ICT
makes to economies – to productivity and economic growth at both the micro and macro levels,
there is no shortage of ‘evidence’ to suggest that the link between the two is inextricable.
For example:
Global output from IT industries more than doubled from $1.2 trillion to $2.8 trillion
between 1995 and 2010 - some 6% of global GDP;1
The direct contribution of the internet to the Australian economy is around $50 billion,
or 3.6% of GDP;2
Between 2006 and 2011 the Internet economy accounted for some 21% of GDP growth in
13 leading economies, Brazil, Canada, China, France, Germany, India, Italy, Japan,
Korea, Russia, Sweden, the UK and the US;3
For every job that is ‘eliminated’ by the Internet, another 2.6 are created because of it;4
Companies that use IT intensively experience three times more growth than non-IT
intensive companies;5
It is estimated that IT workers contribute three to five times more to productivity than
non-IT workers;6
Broadband adoption increases the productivity of manufacturing firms by approximately
5%, of services firms by approximately 10% , and of firms in the information industry by
approximately 20%;7
The probability of a firm developing a product or process innovation increases with the
intensity of the firm’s IT use;8
In Canada, France, Germany, the UK and the US, small companies that adopt Internet
business solutions earn approximately 9% more revenue than other small firms;9
The 38% employment growth in the Australian computer systems design industry since
2008 (compared to 22% in the US and only 10% in the UK), outstrips the overall
employment gain of 8% in the rest of the Australian economy;10
As recently as 2015 Seek has reported that 10% of job vacancies are currently in the ICT
sector;11
Australian research shows that small and medium sized enterprises actively using new
technologies to improve communications and business processes create more new jobs
and generate more revenue than SMEs that use little technology – in fact, between 2010
and 2012 SMEs regarded as leaders in the adoption of technology increased revenues 15
percentage points faster and created jobs at twice the speed of less progressive
companies.12
1 Just the Facts, the Information Technology and Innovation Foundation, May 2013 www.itif.org 2 Deloitte, 2011 The Connected Continent. How the internet is transforming the Australian economy. 3 McKinsey Global Institute, 2011 The Great Transformer. The Impact of the Internet on Economic Growth and Prosperity. 4 Accenture,2014. Remaking Customer markets. Unlocking Growth with Digital 5 The Information Technology and Innovation Foundation, May 2013 Just the Facts, www.itif.org 6 Deloitte, 2013, Connected Small business. How Australian small businesses are growing in the digital economy. 7 The Information Technology and Innovation Foundation, May 2013 Just the Facts, www.itif.org 8 PWC, 2014, Expanding Australia’s Economy, How digital can drive change 9 The Information Technology and Innovation Foundation, May 2013 Just the Facts, www.itif.org 10 Michael Mandel, Progressive Policy Institute, 2014 Jobs in the App Economy 11 http://www.arnnet.com.au/article/566384/ict-leads-growth-aussie-jobs-market/?fp=2&fpid=1 12 Deloitte, 2013, Connected Small business. How Australian small businesses are growing in the digital economy
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In Australia it is estimated that our industry contributes some 8% of GDP and around $91 billion of
revenue.13 We contribute as much to Australia’s economy as the mining sector and only marginally
less than the manufacturing and finance and insurance sectors.
Estimates are that our internet economy is forecast to grow twice the rate of GDP between 2012
and 2016. By way of example, in 2012 online retail sales were estimated to be around $11.3b (5% of
all retail spending). It is estimated they will continue to grow by about 15% a year – well above the
4% of traditional retail.14
According to these statistics, Australia’s ICT sector is a substantial contributor to Australia’s
economy and high standard of living. The problem – and their weakness, is that they reflect the
conclusions of individual studies taken at points in time using specific, and sometimes limited,
definitions of the market and data.
13 ACS, 2013 Statistical Compendium
14 Deloitte, Digital Disruption. Short Fuse Big Bang. 2012,
http://www.deloitte.com/view/en_AU/au/news-research/luckycountry/digital-disruption/index.htm
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3. Definitions The AIIA makes the following comments in relation to the proposed working definitions outlined in
the Review’s Terms of Reference.
ICT Statistics - statistics to inform decision-making for ICT and the digital economy
AIIA broadly agrees with the above definition. For our purposes we have defined this in
terms of statistics that measure the direct, indirect and dynamic impact of ICTs. This
includes measures relating to ICT
Connectivity (infrastructure)
Inputs
Uses – with a focus on the integration of ICTs
Outputs
Outcomes
Digital Economy – markets based on digital technologies that facilitate the trade of goods and
services e.g. through e-commerce
AIIA takes this to include the ‘sharing economy’ – peer to peer products and services,the
‘Apps economy’, APIs and cloud services.
e-business – includes e-commerce as well as processes such as production, inventory
management, product development, risk management, finance, knowledge management and
human resources aimed at achieving cost savings, and improvements in both efficiency and
productivity
AIIA believes that the definition of e-business should also include consideration of data
creation, management, storage and data analytics that play a large part in ICT and the
digital economy capabilities.
In addition to the above, AIIA has identified the following additional working definitions.
Digital adoption:
The rate of market penetration, extent of adoption and/or level of use of ICT amongst
individuals, businesses, or governments.
Digital disruption:
Changes facilitated by ICT/ digital technologies that disrupt, challenge, and re-shape
established business models and methods of value creation or social interactions.
Digital productivity:
The marginal productivity gains facilitated through digital adoption and the use of ICT
products and services by individuals, businesses and governments in their processes of
value creation.
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4. Statistical Collections
Current Limitations
The major limitation of existing measurement approaches is that they focus primarily on the
availability and adoption of ICT technologies. Data collections are narrowly focused on the
household and business use of ICT, internet activity and broad labour market statistics,
supplemented by a biannual ICT Industry Survey.
We note that since the last comprehensive ICT Industry survey in 2006-07, the ICT industry profile
has now been spread across various sections the ANZSIC (Australia and New Zealand Industry Codes)
2006 classification, making it increasingly difficult to capture a holistic view of either the
performance of the ICT sector or the contribution the sector makes to the economy overall.
In 2014 for example, despite its stated objective to collect workforce, financial and product data from information, media and telecommunications (IMT) businesses in Australia in order to measure the size, structure and performance of the industry15, the ABS’ Information, Media and
Technology (IMT) Survey did not include major ICT related components. Computer design and
related services, cloud computing, mobile services and ICT professional services – to name only
some – were excluded from the survey.
While the rapid pace at which ICT is evolving makes developing a measurement instrument for the
digital economy challenging, the need for a multi-dimensional measurement instrument is clear.
This includes the ability to collect and analyse firm level data rather than aggregated data. This is
necessary to surface the raw data that is otherwise hidden in national statistics.
Development of a Principle Based Framework
Australia needs quality ICT statistics to inform better and more strategic policy and business
investment decisions. We need this information to, for example:
Inform telecommunications infrastructure investment such as in the NBN, mobile and wi
fi infrastructure;
underpin national ICT investment decisions, such as in digital technologies skills
development, smart infrastructure investments, ICT innovation and R&D investment;
assess the return on investment in ICT related projects and expenditure;
facilitate business development and investment activities such as in Growth Centres and
national research bodies including NICTA and CSIRO;
share and inform eGovernment, taxation, education, health, employment, industry etc.
policies;
manage an ageing population and shrinking workforce effectively and efficiently;
understand our competitiveness relative to other economies;
develop our export development focus and leverage emerging opportunities;
assess the breadth and scope of the potential digital divide.
In short, the effective measurement and analysis of ICT statistics is imperative to the sound
understanding of economy value. This is not simply a matter of measuring the performance of the
ICT industry.
AIIA acknowledges the complexity of developing a comprehensive, holistic
measurement framework in a constantly evolving and maturing technology
environment. Virtualisation, gamification, convergence of infrastructure,
15 ABS, 2014 Information, Media and Technology Survey
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cashless payment systems, new peer to peer business models, the Internet of Things – represent just
some of the emerging new ICT capability that is disrupting all aspects of the economy. It is this
overarching impact of ICT on the economy, productivity, growth and competitiveness that AIIA
believes is of greatest value and must be the focus of an ICT measurement agenda.
To assist this process AIIA recommends this work is guided by a set of overarching principles. At a
minimum our view is that this framework include the following high level characteristics.
1. Internationally comparability:
o To ensure Australian outcomes are comparable with international peers and
competitors and used to benchmark Australia’s international competitiveness.
2. Benchmarked:
o Underpinned by reliable benchmarks against which change and progress can be
monitored, measured and reported
3. Frequent and Sustainable:
o Statistical data is current and relevant, reported frequently and provides the base
for longitudinal analysis over time.
4. Breadth and granularity:
o Adoption of multi-dimensional data elements (to capture for example, the
individual, business, social and economic impacts of ICT). This includes supply
and demand side metrics and granularity to state/regional, industry sector and
firm level.
5. Availability:
o Statistical data is open and available for broader use in real time (or as close to
real time as possible).
6. Adaptive:
o To accommodate the evolving nature of ICT innovation and capability. This may
mean that while measurement dimension remain relatively constant, specific
measurement indicators may change to reflect new circumstances.
7. Multi-source and multi-use:
o ICT statistical data can be sourced from third parties or as a by-product of other
data collections. This includes federated data from levels of government and
industry and from multi sources, including sensors, wifi networks etc; from all
levels of government,
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5. Measuring Impact As noted earlier, notwithstanding the profound impact ICT has on shaping our modern society and
acknowledgement by policy makers of its increasing economic and social importance, there is no
accepted or consistent methodology for assessing its impact or value on Australia’s economy or
competitiveness.
Conventional measurement approaches such as measuring supply side (hardware, software,
connectivity, some services) on the one hand and use (by individuals and businesses) on the other,
has provided a useful but narrow and increasingly limited view of the impact of ICT.
With the diffusion, convergence and pervasiveness of ICTs making it difficult to isolate the direct
impact of ICT, there is general acceptance across our industry that a multi-dimensional approach to
measurement is required. This needs to take into account:
The direct impact of ICTs: essentially encompassing supply and demand side
components;
The dynamic impact of ICTs: the impact ICT has on productivity, efficiency, profitability
of businesses, translated to a net growth impact on the economy; and
The indirect impact of ICTs: on the overall economic and social gains/improvements of
an economy/society.
As outlined below, this requires a broad and multi-dimensional approach and, in the absence of
clearly delineated measures, use of proxy indicators. It also requires a focus on firm and state
based data to inform and influence State based policies and industry program development.
While the framework we have developed confirms the complexity of the task at hand, the aim is to
demonstrate how the various elements of ICT impact measurement can be delineated. By looking
at the results holistically, we are then able to form a more robust view of Australia’s performance
as a digital economy, including the impact of ICT on overall productivity, growth and
competitiveness.
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Dimension Sub-Dimension Potential Scope of Measurment
1. CONNECTIVITY
Measures the scale, take-up, performance and affordability of the infrastructure that supports economy wide digital enablement.
The purpose of the measurement is to:
Inform coverage, take-up, access and affordability related policy
Inform infrastructure planning and investment decisions
Identify potential structural barriers to digital transformation
Inform e-waste approaches
International comparisons and benchmarks could be made.
1a. Fixed Broadband
1b. Mobile Wireless
Coverage (geography)
Take-up
Speed
Affordability
Geographic reach
Per capita take up (households and business)
Price
Product speeds/performance
Coverage (schools, communities) Coverage communities (wi-fi)
Coverage schools
1c. Devices Device penetration and
replacement patterns
Smartphones
Tablets
Laptops desktops
Wearables
Penetration/Use Sensors/sensor networks
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Dimension Sub-Dimension Potential Scope of Measurment
2. USE: INTEGRATION OF ICTS
This measures the extent to which, and how ICT is used, patterns of adoption and penetration and integration.
This would capture the direct and dynamic impacts of ICT.
The purpose of the measurement is to track the pervasiveness of ICT take-up and use and the extent to which it is changing behaviours and
individual, business, government and community practices.
It would be the basis for efficiency and productivity analysis.
2a. Individuals
Online activities
Content use (e.g. video, music, games, IPTV)
Communication (e.g. social media, email, video calls)
Transactions (e.g. shopping, banking, micro-payments)
Smart home adoption
2b. Business ( Firm level, by
State and aggregated)
Online activities
ICT investment
XaaS
Mobility
SMEs
eBusiness
eCommerce
ICT investment
Cloud service use
Telework/mobility
SME use
2c. Government eGovernment
Service Delivery
XaaS
Procurement
Mobility
Data as an asset
Online communication
Online transactions
Online service completion
Open data availability
Cloud service use
Telework/mobility
2d. Communities Whole of community
adoption/integration
Smart cities
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Dimension Sub-Dimension Potential Scope of Measurment
3. INPUTS
These measures aim to track the supply side inputs required to build competitive capacity in a digital economy. The purpose of the
measurement is to:
ensure a focus on developing the capability necessary to participate effectively in a digital economy;
track investment in ICT capability development;
inform investment, assess return on investments and identify potential investment gaps.
3a. Skills
Digital inclusion
Access and use equity and differentials
Skilled migration 457 and relevant visa classes
3b. Education STEM
ICT skills (Tertiary/TAFE)
ICT related occupations/
employment
STEM students and graduates
ICT undergraduate course take up and completion
ICT related jobs
Online education services
(universities & courses)
MOOCs
Availability, scope
Use
Recognition
3c. Innovation ICT patents
Collaboration
Start-ups/Incubators
Numbers
Growth trajectory
Commercialisation outcomes
3d. Research & Development Government supported R&D
Academic based R&D
Firm based R&D
ICT enabled R&D by industry
Investment $$s
Commercialisation outcomes
PhD students
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Dimension Sub-Dimension Potential Scope of Measurment
4. OUTPUTS
These measures aim to assess and quantify the outputs of ICT capability development and investment and assess resultant growth and
productivity. These measures would inform the impact ICT has on productivity, efficiency, profitability of businesses, translated to a net
growth impact on the economy.
4a. Products
ICT products
ICT related employment
Applications
Games
Content
APIs
4b. Services ICT services
ICT related employment
Cloud market
Data storage
Open Data
Location services
4c.Trade/Export (includes by
State and aggregated)
Trade/Export
Sales (e.g. hardware/software/professional services)
Imports (e.g. hardware/software/professional services)
Import/export ratios
Market reach
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Dimension Sub-Dimension Potential Scope of Measurment
5. OUTCOMES
Measures the impact of ICT diffusion. These measures aim to collect and analyse the broad and in many instances, ‘indirect impact’ of ICT.
The purpose of the measurement is to inform (in combination with the above dimensions) the overall economic and social impact of ICT.
The environmental impacts are also assessed.
5a. Economic
Growth
Competitiveness
Impact of new business models
E.g. peer to peer services such
as AirBNB, Uber
Cashless payment systems
Productivity
Profits
Growth (size)
Efficiency gains
5b. Social Health
Social equity
Cost reductions in operating the health system
Cost reductions in health treatment management
Improved health outcomes
Reduced social disadvantage
5c.Environmental eWaste
Energy Efficiency
eWaste targets/Volumes
Energy efficiency
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6. Data The collection of relevant, quality data is essential to any measurement methodology.
Given the diffusion and pervasiveness of ICT, across all sectors of the economy, a multi-dimensional
approach to ICT measurement - data sourcing, collection and analysis – is required.
With the emergence of automated data collection from source, big data, data analytics and internet
of things capability, there are already large data sets accumulated by government (different levels
of government), research bodies, the private sector and social media. Telecommunications
companies, insurers, banks, retailers, infrastructure owners for example, increasingly hold large
volumes of data and have analytics capabilities that could be leveraged and extrapolated to inform
ICT measurement. This can be done without compromising privacy and security standards and
community expectations.
More broadly there is an opportunity to exploit ICT research capabilities, such as NICTA and CSIRO
to provide advice on innovative methodologies to collect, analyse and interpret data. Machine
learning capability for data analysis is also available from these organisations.
AIIA is strongly of the view that the traditional approach to statistical data collections and analysis
is outmoded: it is costly, resource intensive, typically takes an extended period of time to
complete, is generally static, does not manage dynamic data sets and is narrowly focussed – analysis
is limited and inevitability retrospective.
Through partnerships and collaborations with academia, industry and business, data can potentially
be captured and interpreted dynamically, with minimal additional effort and used for multi-
purposes.
With the growing sophistication of machine learning, the internet of things, big data, data analytics
and predictive analysis capability, ABS must do things differently to deliver meaningful information
and acquit its responsibilities.
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7. Recommendations AIIA is cognisant of the complexity of the ICT measurement agenda. However it is imperative that
we forge ahead. Australia cannot afford to defer this task or wait for the ‘perfect’ measurement
instrument to be available, while our peers oversees aggressively exploit the potential of ICTs to
drive profound transformation of their economies - thereby also their productivity and
competitiveness.
Taking the measurement agenda forward AIIA recommends that:
1. As a matter of priority, development of the ICT measurement framework is guided by a
set of principles, as outlined by AIIA in this response. This will ensure adoption of a
holistic and sustainable approach to ICT measurement and avoid fragmentation and ad
hoc survey and measurement exercises.
2. The holistic approach to ICT measurement includes, for example consideration of the
direct, indirect and dynamic impacts of ICTs.
3. The key driver of ICT measurement is to measure, monitor and report the impact of ICTs
on productivity, growth and competitiveness.
4. ABS partner with bodies such as NICTA, CSIRO, universities and other relevant research
institutions to:
o seek advice on measurement methodologies and innovative ways to capture and
analyse data; and
o use the existing capability and tools of these organisations.
5. ABS engage with industry to identify and exploit existing data capture processes and
information stores – having strict regard to appropriate privacy and security
considerations.
6. Australia ensures international comparability of its measures.
It is AIIA’s firm view that ICT measurement must be a priority for the current Government. The
reduction of funding support for ABS in recent years is reflected in Australia’s very limited ability to
understand the impact of ICTs on our economy, productivity and competitiveness. This needs to be
addressed as a matter of priority to position Australia positively in the global digital economy.
AIIA is committed to improving ICT measurement in Australia and looks forward to working with the
ABS to take this agenda forward.