A brand new report by the Tech Council of Australia concluded that Australia’s giant, mid-sized, and start-up companies should improve spending on know-how adoption to contribute to an economy-wide push to develop total tech funding ranges and make sure the nation doesn’t fall behind the remainder of the world.
The report, revealed in November, argues that Australia ought to undertake a nationwide know-how funding goal. It means that rising complete tech funding from 3.7% to 4.6% of the nation’s GDP may contribute AUD $39 billion in productiveness beneficial properties by 2035. The enhance would require an uplift in each know-how adoption funding and tech analysis and growth spending.
Researchers mentioned ramping up spending may improve financial productiveness and maintain Australia aggressive with world markets.
Expertise adoption is a part of the pathway to productiveness
The Tech Council reported that Australian companies at present make investments $90 billion in know-how adoption — equal to 2.2% of GDP, or roughly $2,100 per capita. Whereas this determine has risen from $1,700 per capita in 2016-17, the share of GDP has remained unchanged.
Based on the report, investing in know-how adoption includes buying know-how that’s new to the enterprise however not essentially to the {industry}, nation, or remainder of the world. This distinguishes adoption spending from R&D know-how funding, which includes growing completely new know-how.
The Tech Council argues a minimum of a 0.4% GDP rise in tech adoption funding throughout giant, medium, and small companies, bringing the whole to 2.6% of GDP in 2035. A 0.7% rise in R&D spending would convey tech funding spending to 4.6% of GDP — properly forward of a at present projected 3.5%.
Researchers discovered that if Australia raises complete know-how funding even increased to six.9% of GDP, $167 billion in productiveness beneficial properties might be unlocked by 2035.
“Australians enjoy some of the highest living standards in the world,” Tech Council’s CEO Damian Kassabgi mentioned in a press launch. “To ensure we can keep growing, we need to see an uplift in productivity growth.”
He added: “Australia’s productivity growth has been declining for some time, which is one of our most pressing economic challenges. Achieving the level of growth we need to turn this around and see our economy thrive requires greater tech development and adoption.”
Australia lagging in enterprise know-how adoption
The report famous that Australian companies lag behind the European Union in tech adoption.
Australia and the E.U. evaluate their respective know-how adoption ranges utilizing a Digital Depth Index, which measures components together with digital expertise, cybersecurity, digital enterprise administration, digital know-how and infrastructure, and e-commerce and on-line presence.
Australian companies cluster extra across the backside rungs of the ranking system. Simply over half of all Australian companies have a “baseline” degree of tech use, in contrast with 41% of companies within the E.U. Solely 10% of Australian companies have been categorised as both “established” or “advanced,” in contrast with 25% of companies within the E.U.
This low determine comes regardless of tech adoption having sensible advantages. Analysis from the Workplace of Innovation & Science Australia and AlphaBeta confirmed that the Australian Inventory Change’s prime 200 companies actively investing in tech adoption and R&D between 2005 and 2016 have been extra prone to survive and develop than different companies on the index that prioritised paying out dividends.
A survey carried out by Ai Group in 2024 discovered that Australian companies are addressing their tech adoption challenges. Eighty-four % of companies surveyed have been discovered to be actively adopting new tech, together with 100% of enormous companies, 82% of medium-sized companies, and 63% of small companies.
How a lot tech adoption is required throughout Australian companies?
The Tech Council is relying on elevated adoption funding from giant, medium, and small companies. Given the present tech adoption ranges proven within the E.U. comparability, researchers estimated that:
- Small companies may contribute 0.19% of GDP in tech adoption funding by 2035 by way of extra of them (12%) shifting from a “baseline” standing of digital depth right into a “developing” class.
- If a bigger quantity (17%) of medium-sized companies made the step from “developing” to “established,” helped by scaling modern small companies as much as this measurement, they may add 0.16% to the GDP.
- A further 0.05% of GDP might be gained from giant companies if 7% of them transfer from “established” to “advanced.” This could see 5% of native companies labeled as “advanced.”
Financial system-wide government schooling may enhance funding
The Tech Council really helpful Australia study alternatives to create know-how industry-led government teaching programs for all sorts of companies within the financial system. The teaching programs may deal with alternatives for companies to undertake know-how and handle know-how danger.
“Managerial skills have been found to have a significant impact on productivity, partly through the role that managers have in facilitating innovation and harnessing the benefits of technologies,” the report mentioned. Latest Gartner analysis discovered CIOs have extra success after they uplift CXOs throughout companies.
Researchers additionally steered that these packages ought to be established as “vendor-agnostic executive education programs,” avoiding them being related to explicit vested know-how pursuits. This could encourage wider uptake in economy-wide tech upskilling to help future funding.
“Tech investment enables companies to commercialise their research and create new business models, making our economy more productive and resilient,” Kassabgi mentioned. “There are also practical benefits to increased tech adoption, which can accelerate the growth of both small and large businesses.”
