The Australian Computer Society (ACS) has called for creation of a new body to represent ICT interests, after the release of a report showing a massive ICT trade deficit blowout.

In 2004, Australia’s ICT exports were worth $5.4 billion, while imports cost $24.4 billion creating an ICT trade deficit of $19 billion – an increase of 15% over the $16.5 billion trade deficit for 2003.

The big contributor to the trade deficit was ICT equipment. In 2004, Australia imported $21.4 billion of hardware and components and exported just $3.1 billion. The figures for ICT software and services were better but still fell way short of a surplus, with imports totaling $3 billion and exports of $2.2 billion.

The ACS has called on the Federal Government to pay urgent attention to the health of the ICT sector in light of the report titled Australian ICT Trade Update 2005.

Releasing the findings of the report, ACS president Edward Mandla said that in the long term, Australia’s focus on simply being a user of other countries’ ICT rather than developing our own capabilities, will affect our ability to create competitive advantage.

“ICT is a high skills industry which makes a profound contribution to the national economic health. It’s a sector which underpins the performance and productivity of most core industries in Australia including the banking, automotive and agricultural industries,” said Mandla.

“The ICT trade deficit figures provide a crucial barometer for the health of our industry.  If we choose to ignore the figures and fail to develop a long term industry plan, Australia will miss out on the significant economic benefits that have been harnessed by our OECD peers.

“ICT imports underpin productivity gains, but our ability to realise the benefits of being an ICT user should not blind Australia to the significantly greater benefits of being an ICT producer. Countries that are large net producers of ICT goods and services have achieved strong productivity gains. General purpose technologies like ICT can form the basis of innovative clusters, spawning a process of continual innovation and contributing to local and regional development.

“We know that the rate of growth in Australia’s working-age population is slowing, and any further gains from reducing unemployment are limited. That means that, more than ever, Australia’s future economic growth will be driven by productivity growth. The ICT sector is a key enabler of Australia’s productivity performance. Local ICT capabilities and international competitiveness will affect the extent to which Australia can keep pace with its international competitors.”.

The ACS is calling for greater focus on attracting significant export oriented investments that link local producers with global production systems.

“It is essential that Australia now put into place policies and practices that allow us to exploit our areas of ICT advantage. Local industry must link into global ICT production systems and focus on attracting export oriented investment while supporting and boosting our local ICT capabilities,” Mandla said.

“We will be seeking the establishment of a new body to provide a united voice on overall strategic issues for the ICT sector.  We need to emulate the successful model established by the Tourism and Wine industries and work with the Government to establish an entity that can unify competing interests and create a genuine, long-term industry vision.  The charter of such a body would include improving ICT employment and productivity, and identifying and promoting our competitive ICT advantages domestically and overseas."

Mandla said such a body would complement the work of existing entities such as Austrade and Invest Australia.

"Both these bodies do a great job, but they are constrained in their efforts on behalf of our industry because we lack cohesion and a clear identity and vision. Austrade has exceptional programs, but without a 10-15 year industry plan and a guiding body, it just doesn’t have a pipeline of great innovative ICT companies to take overseas,” he said.

The ACS will present its recommendations and the findings of the Australian ICT Trade Update 2005 report to the Minister for Communications, Helen Coonan, and the Minister for Trade, Mark Vaile, in coming weeks.