Internet Transforming Australian Economy
Some of the claims are very broad, as an example, report says that through e-education the Internet can
reduce administrative and infrastructure costs, as well as make long-distance education and other e-learning possible. While this is true, it is not clear if high speed broadband improves education, or if this happens without changes to educational practices.
The report cites "Program goes beyond open course model" ( , 16 September 2009) and "The ICT Impact Report: A review of studies of ICT impact on schools in Europe" (European Commission, 2006). These reports indicate that changes to educational practice are required. While they mention "broadband" there is no indication how much is required. Also the educational practices mentioned, such as on-line collaboration, do not need high speed broadband.
It should be noted that the cost of reequipping schools with the equipment and trained teachers for new teaching methods would dwarf the cost of the Internet access. Also the new teaching methods would have effects beyond education. As an example, if students can receive education on-line, then there would be large savings in school building and support staff costs. However, parents would then need to cover the cost of the child minding service which the school was previously providing.
ContentFrom: The Connected Continent: How the internet is transforming the Australian economy, Access Economics in August 2011
Executive summary 1
1 Introduction 3
2 The direct economic contribution of the internet 5
2.1 Expenditure-based estimate 9
2.2 Income-based estimate 10
3 How the internet is transforming the economy 11
3.1 The impact of the internet on businesses 14
3.2 Public sector and government 20
3.3 The internet’s benefits to households 24
4 Charting the growth in internet use 29
4.1 Access 32
4.2 Use 34
4.3 Expenditure 38
5 Prospects for the internet economy 39
5.1 Household access 42
5.2 Intensity of use 44
5.3 The outlook for the internet economy 46
Appendix: Methodologies 49
The internet has transformed the Australian economy over the last 10 years, and is poised to play an even greater role in our daily lives and businesses as Australia positions itself to become a leading digital economy.
To help reach the goal of becoming a leading digital economy, this report aims to promote a deeper understanding of the role of the internet in the Australian economy.
The direct contribution of the internet to the Australian economy is worth approximately $50 billion or 3.6% of Australia’s Gross Domestic Product (GDP) in 2010. This contribution is of similar value to the retail sector or Australia’s iron ore exports.
There are currently some obvious and direct economic benefits of the internet, such as the 190,000 people employed in occupations that are directly related to the internet – including IT software firms, Internet Service Providers (ISPs), and companies providing e-commerce and online advertising services.
But, just as the roll out of electricity changed many aspects of peoples’ lives and transformed the way businesses operate, the internet provides wider benefits beyond its direct economic impact.
These wider benefits – which are not fully captured in GDP calculations – include:
- Approximately $27 billion in productivity increases to businesses and government in the form of improvements to the way they operate and deliver services. These services also flow through to consumers through lower prices and the introduction of new products
- The equivalent of $53 billion in benefits to households in the form of added convenience (e.g. of online banking and bill paying) and access to an increased variety of goods and services and information.
1 The internet is a catalyst for the success of Australia’s small and medium-sized enterprises (SMEs), improving how they interact with their customers and suppliers and manage their internal operations.
A customised national survey of 150 SMEs found that:
There is substantial scope for SMEs to take greater advantage of the internet, with all respondents using the internet but only half having their own website The benefits of SMEs getting online should flow to other Australians, as SMEs suggest they are more likely to use the internet to find additional customers and suppliers locally, rather than overseas.
Growth in internet activity is accelerating. This is driven by infrastructure investment, the uptake of new technologies (e.g. smartphones) providing access to the internet, new applications such as social media sites and an increase in business and government use of the internet. Activity has doubled over the past four years, according to indices developed in this report:
More Australian households and businesses are going online and they are rapidly upgrading to faster connections as they become available Australians are doing more on the internet.
Web searches across categories ranging from banking to retail continue to increase more than 30% year on year. SMEs are steadily getting online with basic websites, and an increasing number of people are engaging with government services online
An index capturing consumer spending on e-commerce and business spending on online advertising has increased by 100% over the past four years. This strong growth is set to continue as Australia catches up to more developed internet economies like the US and UK, and a larger share of commerce and advertising moves online.
The direct contribution of the internet to the Australian economy is set to increase by $20 billion over the next five years, from $50 billion to roughly $70 billion.
• This represents a growth rate (at 7%) that is twice as fast as that forecasted for the rest of the economy and will see the internet’s contribution approach that of the healthcare sector today
Over the same period the growth of the internet will also result in approximately 80,000 more Australians employed in areas directly related to the internet Australia’s use of the internet will expand rapidly to progressively close the gap between Australia and the world’s leading digital economies These expectations reflect the rollout of the National Broadband Network connecting more Australians at higher speeds, government and business making better use of the internet, and government developing a policy framework that supports investment and innovation in the internet economy. ...