Over a period of around 35 years, ICT has become an integral part of the fabric of everyday life. The National Office for the Information Economy (2002) notes that almost all businesses use computers and access the Internet. Increasingly, most have some sort of web presence, either directly or through a community portal. According to the OECD (2005), Australia has one of the highest rates of ICT diffusion among developed countries (refer Table 1). In the fields of finance, communications and electronics its impact has been substantial, whereas in the primary industries its diffusion and therefore impact is limited (DCITA 2003).

Table 1 - Business use of the Internet and web sites - Australia and selected countries (2004-05)

Note: Australian data in this table are from the 2004–05 BUIT survey, however, the scope has been adjusted to provide estimates for businesses with 10 or more persons employed only.

As indicated by Table 2, in terms of industry-specific ICT usage of Australian businesses, computer and Internet usage is highest within the electricity, gas and water supply and cultural and recreational services industries. The majority of businesses within other industry sectors do not have a web presence or place orders via the Internet, while only a relatively small proportion of businesses receive orders via the Internet. At the State level, Victorian businesses trail most of the other states in terms of computer and Internet adoption and placing or receiving orders via the Internet. However, a relatively high proportion of Victorian businesses do have a web presence (30 percent). Finally, a comparison of capital areas and other areas (i.e. regional) indicates that metropolitan businesses are more likely to be adopting these ICT technologies.

Table 2 - Australian business use of selected ICT technologies (2004/05)

Source: Australian Bureau of Statistics (2006)

An important aspect of ICT is that its influence seems to be related to the distinct stages through which ICT technologies have passed; the mainframe, PC, and Network computing eras have all been associated with periods of growth followed by a levelling off as industry ‘digests’ (Farhoomand 2005) the technologies. Hence, whilst new ICT investment in Internet related areas is still growing, ICT growth is nowhere near the double-digit levels of the 1990s. This industry is essentially cyclical and we should expect this trend to continue.

The impact of ICT on productivity and growth is complex. Smith (2001) identifies two arguments concerning the influence of ICT on economic growth. The first ‘structural change’ argument, suggests that the emergence of new technology sectors drives economic development through higher growth rates of employment and productivity. The goods and services of these ICT sectors change a region’s economic conditions by enabling increased productivity or introducing new production methods. The alternative ‘productivity growth’ perspective argues that ICT is a capital good, and that investment in ICT should raise labour and total factor productivity.

The productivity impacts of ICT in Australia are complex. DCITA (2003) estimates productivity growth from ICT as 1.3 percent per annum, whereas NOIE (2002) estimates it at only an average of 0.9 percent per annum, a figure mirrored by that of Tasman Global Model (DCITA, 2003). However, this is part of the so called ‘productivity paradox’ - that ICT is everywhere but its impact is difficult to measure. The problem arises because ICT is difficult to disentangle from its user, the change in services provided and capital:labour ratios. In addition, management moderates its impact. Through the consultative process of this strategy, there was recognition of the potential for higher productivity gains (i.e. greater than 5 percent per annum) when complemented by a positive environment. This factor may be a reflection of the immature status of ICT and can be expected to change over time as technology standardises and matures. In support of the ‘hidden’ productivity potential of ICT, NOIE (2002) notes that productivity growth in Australia was precipitated by micro-economic reform but was sustained by ICT investments.

From 2000 to 2005, there was an oversupply of ICT professionals; however, this surplus in now moving into deficit. The 2006 ACS Employment Survey, provides evidence of the growth in the ICT profession. The Survey reported unemployment has declined rapidly over the past four years (falling from 7.2 percent in the previous survey to 5.1 percent in 2006) and is currently close to the national average unemployment level for all industries.

The more positive employment outlook is also reflected in the continuing increase in the number of respondents who are in full time salaried employment. Furthermore, underemployment remains limited, with sixty seven percent of respondents reporting that they have not experienced any underemployment over the past five years.

ICT is a strategic industry both in Australia and worldwide. However, growth is patchy and ICT 2030 needs to recognise the importance of emerging technologies that will be important drivers of this industry.