Ultimately the Digital Economy can be seen as a descripton of the wide set of productivity improvements delivered through the adoption of ICT. This is the most limited view, but it seems to be what the Government thinks it is.
Telstra has released a report and white paper, including its Telstra Productivity Indicator. As expected it has been able to turn this into good positive brand stories. The one in Busines Spectator confused at times the ACIL Tasman white paper with the outcomes of the survey conducted by Sweeney.
The observation that large numbers of businesses don't measure productivity improvement masks the fact that many firms focus is on the creation of new markets and products, which typically makes productivity measurement a difficult task.
Business Spectator also comes up with some extraordinary comparisons of Australian versus US productivity improvement over the last thirty odd years. These numbers don't sound right on the surface. But even if they did, in a choice between the US economy and the Australian economy I guess I'd choose ours.
Similarly the note that our productivity improvement had been concenmtrated in mining and agriculture is described as if it were a negative. The theory of comparative advantage in trade suggests you should work on improving your strengths, so it looks to me like we've ben doing the right stuff.
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"Similarly the note that our productivity improvement had been concenmtrated in mining and agriculture is described as if it were a negative. The theory of comparative advantage in trade suggests you should work on improving your strengths, so it looks to me like we've been doing the right stuff."
ReplyDeleteIn a sense. We've been selling minerals to nations with low labour costs who can produce goods from raw materials and then sell them back to us at a profit. Does this make good economic sense ?
We lose out in IT to countries overseas such as India where labour costs are cheaper. There is surely also a lack of incentive to host material in a country with a heavily regulated Internet and a limited capacity for Internet hosting.
I'm sure you have accessed the ICT and Productivity page at
http://www.dbcde.gov.au/communications_and_technology/publications_and_reports/2007/april/ict_and_productivity_summary_of_dcita_publications
"The report makes it clear that ICT is only an enabler—a necessary but not sufficient condition for productivity growth and transformational improvements. Unless organisations have appropriate policies and supportive environments in place, the desired outcomes will not necessarily occur."
We do not have a competitive advantage when it comes to IT. Given the direction the government is taking we are heading towards a definite competitive disadvantage.
IMHO that is...