A recent publication from the National Office for the Information Economy reports on Australia's online performance in the context of the global information economy, presents a statistical overview of Australia's "readiness" to participate in the information economy, looks at the "intensity" of this participation, and examines the likely "impacts".
Australia has emerged from the advent of the online age as one of the information economy world leaders. More and more Australians are adopting and utilising the Internet and related technologies. As well, many Australian businesses are taking advantage of the time and cost efficiencies delivered by business-to-business e-commerce, and the expanded market opportunities afforded by business-to-consumer e-commerce.
Highlights of this report from NOIE include:
Australia is amongst the leading nations in the world in terms of population accessing the Internet, with 41 per cent of its total population accessing Internet at May 2000. Australia is performing better than countries such as the United Kingdom, Taiwan, Korea, Germany and Japan.
Canberra is a leading city in terms of adults accessing the Internet (62 per cent of the adult population), outperforming leading cities in the United States like San Francisco (61 per cent) and San Diego (58 per cent).
At May 2000, 55 per cent of Internet users in Australia were males and 45 per cent females. The percentage of women online compares favorably with other countries such as Sweden with 44 per cent, the United Kingdom (36 per cent), France (33 per cent) and Germany (32 per cent).
At September 2000, 57 per cent of Australian students accessed the Internet at school. Australia ranked seventh out of the 16 surveyed countries ahead of places such as South Korea, Japan, Germany and France.
The estimated value of business-to-business e-commerce activity in Australia for the year 2000 is $US5 billion. Australia was ranked eighth out of 20 surveyed countries ahead of countries such as Korea, Taiwan, Sweden, Singapore and New Zealand.
Global IT spend $US2.1 trillion in 1999
A global study of spending on hardware, software and other technology items, including wages for IT workers, has shown that the size of the IT industry continues to grow on a steep incline. The study, produced by the World Information Technology and Services Alliance (WITSA) in co-operation with International Data Corp. (IDC), showed that the information and communication technology industry was worth $US2100 billion in 1999. It is projected to become a $US2400 billion industry in 2003 and surpass a$US3000 billion in 2004., according to the study titled Digital Planet 2000: The Global Information Economy.
To conduct the study researchers gathered data from government agencies and IT industry sources in more than 50 countries and regions that comprise 98 per cent of worldwide spending on hardware, software and services, telecommunications hardware and services, office equipment and internal spending budgets.
The study found that the top 10 countries ranked in order of IT spending in 1999 were the US, Japan, Germany, UK, France, Brazil, Italy, Canada, China and Australia. The top 10 represented 80 per cent of the global IT spending in 1999.
The IT industry's compound annual growth rate of more than seven per cent indicates the sector continues to outpace other industries and the potential for future growth is still extraordinary.
The study also found that by region, North America continues to lead the globe in overall IT spending at $US817 billion in 1999; Eastern Europe spent the least at $US30 billion. New Zealand led the world in IT spending as percentage of GDP at 10.5 per cent, while Switzerland spent the highest per capita, at $US3,335, followed by Japan at $US2,854 and the US at $US2,792.
Kiwi SMEs shun IT consultants
Small and medium-sized enterprises (SMEs) in New Zealand are not comfortable working with IT consultants on e-Commerce, according to initial findings from a research project by Victoria University. Ongoing research on the e-commerce issues and concerns of New Zealand SMEs, has so far revealed that organisations are grappling with the question of whether to develop e-commerce initiatives inhouse or to use outsiders. Representatives from nine Wellington firms voiced strong concerns regarding the use of IT contractors. One participant likened IT consultants and contractors to a "rogues gallery", while others said few IT consultants were sufficiently up to speed in e-commerce technologies and that consultants would contract with a customer organisation to learn what they should have known already.
While concerns about skills and knowledge were assessed as important, uppermost in people's minds was the financial impact of e-commerce. This covers cost of implementation, uncertainty associated with that cost, whether or not there is a payback, whether e-Commerce will generate revenue and the most appropriate pricing models.
Shortage hits Asia/Pacific IT services marketsIDC's most recent survey of the services market of Asia/Pacific excluding Japan indicates that the industry is likely to grow at 18 per cent from an overall value of $US12 billion in 1999. This growth, however, is significantly lower than demand growth, as the services industry collectively will lack the manpower to meet the full potential of the market. "One of the most significant inhibitors to growth in the IT services industry is the shortage of skilled staff, an issued that has been of great concern for this industry over the past few years. This problem not only delays projects, but increases their costs," an IDC analyst explained. IT services projects are people-driven and simple economics dictate that if there is a smaller supply than demand for any good (in this case human capital), then the price must increase which is subsequently carried through the entire cost of the project.
It is not only technical competencies that are in short supply but also project management expertise, industry sector knowledge and strategic planning skills. It seems inevitable that costs and salaries in the industry will continue to rise and IT training will be leveraged to enhance the quality of existing employees. Recognised qualifications, and in particular certification, will play a much more significant role, bringing benefits to employer, employee and customer alike. The skills shortage will also manifest itself in increased numbers of unfulfilled IT projects, which can only ultimately have a negative macro-economic effect on Asia/Pacific competitiveness.
Australian teachers world leaders in Net access and usage.
More than 61 per cent of Australian teachers have internet access at home and more than 65 per cent accessed the Internet at least once a week from school, according to a research report released by myinternet.com.au. This compares to US figures showing that 59 per cent of teachers had Internet access from home., and while two out of three public schools in the US are equipped with computers in the classroom, only 50 per cent of teachers use school computers at least once a week.
The figures show that Australian teachers are leading the world when it comes to Internet access and are heavy users of the Internet for teaching purposes. Not only do 93 per cent of teachers see the Internet as an essential and valuable teaching aid, but they also report a high level of proficiency with 70 per cent of those regularly on-line considering themselves as proficient or fairly proficient on the Internet.
The research also revealed that 44 per cent of Australian teachers have never tried to use the Internet for publishing work.
Asia's Web buyers to spend more online
According to a recent IDC survey of Asian Internet users, e-commerce opportunities will surge in Asia/Pacific over the next 12 months, opening a watershed of opportunities for Web sellers that understand the preferences -- and differences -- of Asia's Internet users and Web buyers. The survey, conducted in August and September of 2000, captured the demographics, spending habits and future online purchase intentions of more than 40,000 Asian Internet users in more than 10 Asia/Pacific markets and represented the largest research effort of this kind in the Asia/Pacific region.
The survey painted stark differences between the Internet environment in Asia compared to more developed markets such as the United States. Perhaps the most noticeable differences were in the demographics of Asian Internet users and Web Buyers. While the Internet is becoming a mainstream medium in the US, Asia's typical Internet user is young (80 per cent between 19 to 34) and male (76 per cent), with an annual household income of less than $US15,000 per annum (72 per cent).
Despite the rapid growth of Asia's Internet user base, a majority of those online still do not make purchases over the Web. Only 40 per cent of survey respondents had purchased any products or services online in the past 12 months. Internet users in Korea and Australia/New Zealand were the most likely to spend online, with 65 per cent and 51 per cent doing so in the past 12 months, respectively. The primary impediments to e-Commerce cited by survey respondents included concerns over using credit cards online, fears of dealing with disreputable merchants, preference to physically examine products before purchasing them and a lack of discretionary income.
China R&D hits record levels
Investment in research and development (R&D) in mainland China reached a record 0.83 per cent of GDP (gross domestic product) in 1999, according to a recent report in the official People's Daily newspaper. Government and enterprises in China spent 67.89 billion renminbi on research and development, up 12.78 billion renminbi - about 23 per cent - from the previous year, according to the National Bureau of Statistics. This put investment about 0.8 per cent of GNP for the first time. Investment per employee was 83,000 renminbi, up 10,000 from 1998, People's Daily reported.
China has a strong core of universities doing advanced research in areas such as optics and processors, but the country'' numerous insolvent state-owned enterprises and with the constraints on foreign investment have held back the resources going in to R&D. China's entry into the World Trade Organisation (WTO), expected this year or early next year, promises to increase the amount of foreign capital available in China.
By way of contrast, Singapore in 1999 spent approximately, 1.94 per cent of its GDP on R&D, up from 1.76 per cent in 1998 with a 12 per cent increase in spending to S$2.8 billion ($US1.6 billion). Singapore had targeted R&D spending at 2 per cent of GDP by 2005 but now expects to reach that level by the end of this year.