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Laying the foundations for a Digital Economy

Information Age staff, Information Age

16/06/2008 14:27:24

I am often asked why the Rudd Government places such an important policy focus on the Digital Economy. The answer is that how we manage the Digital Economy will have a profound effect on our economic performance and the lives of all Australians.

The Digital Economy is the framework for future economic activity and social interaction. Therefore, ensuring we have the right platforms in place is essential to ensure we exploit its full potential.

Around the world, policymakers are grappling with how to ensure their countries harness digital benefits. Countries that embrace them will prosper. In many ways, the Digital Economy is already booming. ICT is already entwined in our economic and social fabric; in areas as diverse as financial markets, government services, social networking, entertainment, telephony and agriculture.

New services and applications are increasingly viewed as 'essential' by consumers and businesses alike. Businesses are using ICT and the Internet to revolutionise their systems and processes, in turn improving efficiency and promoting innovation. Old business models are giving way to new ones and in some cases, competition is just as likely to come from overseas as down the road.

Consumers are also benefiting. At home, people are watching IPTV and vodcasts, making travel arrangements online, enjoying cheaper phone calls through VoIP and roaming through virtual worlds. Perhaps some of the most exciting Digital Economy possibilities are in the education and health sectors.

Schools and universities are increasingly using the Internet for education and research. Students can remotely access audio or video recordings of lectures and better participate in distance education. Researchers can use the Internet to collaborate with colleagues around the world, accelerating the development and availability of scientific breakthroughs.

The link between investment in education and broader economic benefits is well accepted. Equipping current and future generations with the best possible technological opportunities will enable Australia to make an effective transition towards a knowledge-based economy.

We are also on the cusp of exciting developments in the e-health sector. Some doctors and hospitals are already examining patients remotely and experts are now talking of the day when technology allows for pre-emptive diagnosis.

High-quality videoconferencing facilities allow for 'real time' interaction between patients and doctors in separate locations, providing productivity and social benefits.

A remote patient monitoring program implemented by the Veterans Association of America has helped reduce hospitalisation rates by up to 60 percent. The social benefit of this type of program - which allows older people to stay at home and retain independence - is enormous. Along with this there are huge economic savings - particularly if we project into the future and recognise Australia's ageing population.

Obviously, the availability and affordability of first-class Internet services for all Australians is one of the key elements in harnessing this potential. Recent statistics provide an interesting snapshot of the internet and the effect it is having on our lives.

As at March 2008, there were over 1.3 billion Internet users worldwide. More and more people are going online to do business. Over 25 percent of people in the OECD ordered goods or services online in 2007, while over 30 percent of the OECD population performed online banking activities. But the Internet is also helping people in more intangible ways. Forty-five percent of Internet users in the US reported that the Internet helped them make big decisions. And in Korea - a country where 94 percent of households are connected - users report positive effects on their lives such as convenience, promotion of civic rights, participation in politics and an increase in leisure time.

In the 2008 Digital Future Project - which is a study of Internet usage in the United States - 45 per cent of users said that the Internet was important or very important in helping them to maintain social relationships. In Australia, the most recent ABS stats show that at the end of 2007 there were 7.1 million Internet subscribers in Australia. They also show that - where available - there is an increasing demand for higher speed broadband services. And people are not just sending e-mail and paying bills online. Roy Morgan data shows that nearly 60 percent of users have downloaded audio material while more than 30 percent have either streamed or downloaded Internet video.

Increasingly, the Internet is being viewed as an essential facility - in much the same way as people see gas, electricity and the telephone. A recent report by the Australian Communications and Media Authority (ACMA) indicated that Australians already see the Internet this way. Seventy percent of household consumers indicated that broadband is a "critical service for the future".

The next frontier

All of these developments suggest that we are in the process of a profound social and economic transition. But what role is there for government in this transition? The transition towards the Digital Economy represents the next frontier and it is the Government's responsibility to ensure that Australia has the infrastructure, the confidence, the skills and the regulatory settings in place to embrace an effective transition towards a fully-fledged Digital Economy.

This Government's vision is to position Australia as a highly competitive and innovative knowledge-based economy. This vision will not be achieved by one policy in isolation; however important it may be. Over time, it will require the Government to consider a range of coordinated policy measures and responses in a range of areas. This includes ensuring that the necessary infrastructure and regulatory frameworks are in place; and ensuring that the necessary protections are in place to enable Australians to plug into the Digital Economy safely.

The widespread availability and affordability of high-speed broadband services is a first-order priority for the Rudd Government. This is borne out by the Building Australia Fund announced on budget night. This fund will not only support the future of Australia's road, port and railway infrastructure, but also facilitate the delivery of a new National Broadband Network.

E-security

The National Broadband Network is foundation infrastructure that will support services and applications that people need now, and those innovations that will emerge in the future. Before the election the Government committed to invest up to $4.7 billion to facilitate this network and we are moving rapidly to achieve our goal.

The National Broadband Network will accelerate the rate at which Australians are plugging into the Digital Economy. Yet many of the opportunities that come with a connected world bring with them risks and dangers which we cannot be blind to. There are emerging e-security threats and vulnerabilities that pose a challenge to the effective and efficient use of new technologies.

Governments and the private sector need to work together across jurisdictions to improve cyber-security, combat spam and protect privacy, consumers and minors. Concerns about security, trust and privacy are also barriers to users buying online.

The Government has adopted an integrated approach that addresses e-security risks to Australian Government networks, critical infrastructure, home users and small businesses. We are focusing our efforts on a number of areas, including education and research to ensure people are well informed about the latest issues.

To ensure parents and teachers have confidence in the Internet we need to address the online risks to children. This is why the Government has committed $125.8 million to cybersafety and a range of targeted measures including education, research, law enforcement and ISP level filtering of illegal material. A range of awareness and education measures are aimed at teaching children to be good cyber-citizens.

Another area of particular focus for the Government is the efficient management and use of our national radio spectrum assets. Spectrum is used for key communications in the modern world - television, mobile telephony, wireless broadband, satellite broadband, emergency services, security, logistics tracking to name but a few. It is another core plank of our national infrastructure and the Government is putting in place the necessary measures to make sure we maximise its potential benefits.

The Rudd Government has also resolved to tackle the issue of digital television switchover. We have set December 31, 2013 as the date for completing the switch-off of analog TV, established the Digital Switchover Taskforce and allocated $37.9 million for a range of measures to ensure a smooth transition.

The Government wants to ensure that switchover is completed with minimum disruption and maximum benefit for Australians. We also want to make sure we maximise the national benefit presented by spectrum-used analog broadcasting becoming available for new uses. Estimates put the value of this digital dividend at close to $1 billion.

This Government recognises the importance of the Digital Economy and has a clear vision for Australia's digital future. To make this vision a reality, we need sound policy and leadership.

We are pursuing a coordinated approach. We will ensure that Australians have the infrastructure, confidence, skills and regulatory environment needed to take full advantage of the Digital Economy. By keeping an eye on the future we can create a foundation for economic prosperity for the decades to come.