A $315 billion opportunity: Why Australia must capture the next digital wave

A focus on eight key digital industries would yield up to $315 billion in economic value, according to a report by economics and strategy firm, AlphaBeta, commissioned by CSIRO’s Data61.

The Digital Innovation report finds Australia has failed to capture the same economic value from digital innovation as other countries, with productivity from technology below that of our peers, and a lack of our own large-scale digital industries.

The opportunities identified are precision healthcare, digital agriculture, data-driven urban management, cyber-physical security, supply chain integrity, practice government, legal informatics and smart exploration and production.

The report finds Australia has captured a third less value than its advanced economy peers. The total economic value derived from digital innovation in Australia represents 7.4% of the country’s total GDP over the past two decades, compared with 11.2% of GDP in advanced economies.

Releasing the report at the D61+ LIVE conference in Brisbane, Data 61 chief Adrian Turner said Australia had a clear choice: to go through what he called “door A” and capture the economic benefits of the so-called fourth industrial revolution, or go through “door B” and miss many of the global opportunities from the booming digital economy.

Why the next digital wave is ours to capture

Turner told the conference that Australia had missed many of the gains of earlier digitalisation, but that the next digital wave to revolutionise existing industries and create entirely new ones is ours to capture. “But the opportunity is perishable if we don’t collectively take action now,” he said.

He said artificial intelligence was emerging as a broad-based technology that would have a profound impact on the design of all industries and their markets.

According to the AlphaBeta report, the fourth industrial revolution will create new markets, products and services in industries where Australia has a significant presence: “Digital innovation over the next decade will have a broader economic impact because the core technologies, such as autonomous systems, remote sensors, machine learning and artificial intelligence, can be applied across many industries. The latest wave of digital innovation will now revolutionise traditional industries from mining to agriculture just like past waves of innovation have reshaped the information and media industries.”

The report calls for a focus on industries where Australia has a competitive advantage and there are real export opportunities, especially in the Asian market.

It reads: “As a mid-sized market, it is critical that Australia defines its own path to success at digital innovation, rather than attempting to emulate the breadth of Silicon Valley or the scale of China. Australia is most likely to succeed if it focuses on producing new digital products and services for industries in which it already has a global competitive advantage — thanks to its natural resources endowment, strong institutions, diverse and highly skilled workforce, and existing infrastructure and customer base.”

“Digital innovation is critical to improving our nation’s productivity and sustaining economic growth. It’s not just about creating the next Google or replicating Silicon Valley,” AlphaBeta’s Dr Andrew Charlton said.

“Rather, almost half of economic benefit from digital innovation comes from the adoption of new technology across existing industries,” he added.

Dr Charlton said the key was to have a strategy, and this would take leadership across business, government and the research community to focus on important sectors and build strong ecosystems around these sectors.

He said Australia’s strongest opportunities are in focusing R&D investment and applying digital innovation to existing industry strengths, where key drivers of competitiveness are already in place such as strong domestic markets, and in high-quality basic research.

Both Charlton and Turner called out the need for a much stronger export focus to national digital innovation, noting that Australia had few global scale native digital firms.

Turner announced Data61 was undertaking a national challenges program designed to facilitate stronger collaboration between research, government and industry on strategic and national challenges to accelerate large-scale outcomes.

He told the conference the initial challenge is focused on food provenance and supply chain traceability with the NSW Department of Primary Industries as the first partner. The aim is to ensure product integrity and minimise food fraud specifically for cherries, rock lobsters, abalone and citrus.

The issue was identified in the Digital Innovation report as a critical problem and threat to Australia’s economic growth and development with food fraud alone costing Australia $65 billion per year due to counterfeiting produce.

The AlphaBeta report echoes a similar innovation report titled Australia 2030: Prosperity through Innovation released earlier this year by the chair of Innovation and Science Australia, Bill Ferris.

The article was originally published on The Mandarin. Read the original article.

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