According to Andrew Stevens, managing director of IBM ANZ, innovation in the services sector will be the major economic growth driver as the resources boom fades in the current decade.
Speaking in Melbourne at a monthly AmCham (American Chamber of Commerce) lunch last week, Mr Stevens indicated that the NBN and ICT will be the cornerstones of innovation in Australia.
“While there has been strong growth in resources, the rest of our patchwork economy has been growing at less than 2% a year,” said Mr Stevens.
“It’s also important to recognise that mining makes up less than 10% of our economy. So, how do we support the whole the economy and ensure our prosperity?
“The answer is innovation.
“But where is the next wave of economy-wide, nation-changing innovation going to come from?
“I’ll argue today that it will be built on information and communications technology – ICT including high-speed broadband.”
According to Mr Stevens, Australia has evolved beyond agriculture and resources into an advanced services based economy – and growth in services driven by ICT innovation is our future.
“If we want to stay on the GDP path we’ve become accustomed to then we need to be world-class in high-value services.”
Mr Stevens cited a Reserve Bank report, which noted that changes in technology help improve productivity most when they enable us to alter work processes.
“In other words, technology has a major impact when it allows us to introduce new business models,” he said.
“I believe that the ICT we have now – and the technology which is coming with faster broadband and other innovations – can have that effect.”
According to Mr Stevens, high speed broadband will be responsible for generating 20% of Australia’s GDP by 2050.
“Right now, one of the biggest new technological possibilities is high-speed broadband.
“Internet and broadband will continue to be one of the most important drivers of economic change for Australia – and the world – in the next decade or so.
“Almost every sector in our economy stands to gain from broadband.
“By 2050, Australia’s GDP should be $5.3 trillion in today’s terms – compared to our $1.4 trillion economy of 2011.
“Broadband will be central to the generation of $1.25 trillion of that – or a fifth of our future economy.”
Mr Stevens singled out mining, retail, healthcare, education and public administration and safety as key sectors that will benefit from Australia’s broadband revolution.
“With broadband, we are now moving into what could be called the infotronics age – where the utility is very fast communications and very powerful computers and systems” he said.
“What this latest utility does / is reduce our need to move things.
“We can move bits and bytes instead of ourselves or other physical objects.”