Emerging high-tech solutions are key to our economic recovery
30 Nov 2020
Those who focus on R&D are best placed to launch out of a crisis. Australia shouldn’t be complacent and be left behind in the race. R&D gives companies a defendable competitive edge, build a global brand, and create new product lines and market opportunities. Global R&D spending is worth $3.08 trillion per year.
In a report released today by Austrade and CSIRO’s Data61 Trade and Investment Megatrends is a strategic foresight study exploring changes in the global trade and investment landscape as the global economy recovered from the 2020 pandemic and recession. The report also presents a set of strategic actions for Australian governments and industries to capitalise on significant shifts in the global trade and investment landscape.
The report makes a number of recommendations for increasing the rate of R&D and innovation in Australia’s export sectors including boosting digital exports.
A vast amount of economic activity has transferred from the physical world to the virtual world. The impacts on global trade and the world economy are likely to be far-reaching and enduring. We’ve seen a decade’s worth of digital transformation occur within the space of a few months. The digital technology sector is by-and-large expanding worldwide amidst the downturn.
The growth of services exports for Australia is of interest because it represents a shift towards a more diversified trade portfolio and new sources of value. Services have traditionally contributed between 11% and 31% to the total Australian exports. Charges for the use of intellectual property grew from AUD$690 million in 2000-01 to AUD$1.364 in 2018-19. In a global economy, where intellectual property, technology, and innovation have become a source of wealth and productivity growth.
The CISRO has identified that Australia is missing out on an AUD$315 billion opportunity by not taking advantage of the digital services boom. They argue, since 2000 Australia has only captured 7.4 percent of potential economic benefit from digital technology. This is substantially less than the 11.2 percent capture by other similar advanced economies. The Export Council of Australia has reported that that the export value of virtual goods and services enabled by the digital economy, such as e-commerce, account for AUD$6 billion in 2018, making it Australia’s 4th largest export. They argue this industry it could more than double to AUD$19 billion by 2030.
Digital technology will play a critical role in the rebuild. Telework, telehealth, online retail, online education, and online entertainment are all booming. A vast swathe of economic activity has transferred from the physical world to the virtual world. There is room to do more to take advantage of these opportunities. Australia is well behind its competitors in implementing AI strategies, ranking at the bottom of the OECD in terms of investment and research in AI. Data and AI is already a regular feature of e-commerce, banking, agriculture, government, and advanced manufacturing in Australia.
It provides businesses improved decision making, enhanced customer targeting, increased operations efficiency, and more responsive supply chains. The World Economic Forum has reported that AI alone will contribute US$16 billion to the global economy by 2030.
CSIRO Data 61 has reported that Australia has global digital capability in health and biotech, infrastructure and urban management and agriculture and resources. Technologies such as precision agriculture, internet of things (IOT), artitifical intelligence (AI) and blockchain have the potential to link Australia’s food and fibre exports to seamless trade and provide real-time supply chain monitoring and providence validation. Gains from digital agriculture could add AUD$24.6 billion to Australia’s GDP and create a A$100 billion agriculture industry. The global digital healthcare market will exceed AUD$521.22 billion in the next four years.
Business should invest in digital transformation
To get results, Australia will need to collaborate across universities, research organisations, industry, and government to create new, refreshed, and targeted R&D foreign direct investment program. Australia will need to look to expand into new markets and act quickly to jump on market trends as they happen. For example, automation could increase Australia's productivity and national income – adding up to $2.2 trillion to the economy by 2030.
For more information Contact