[LINK] Reports damn Australia's IT record

[richard@auscoms.com.au]

I notice that the "old economy" view of the "new economy" prevails -- it's not
"real" IT or telecommunications unless it's hardware.

"Australia's manufacturing output" in IT&T the report says -- but software
doesn't rate a mention. Software, it seems, is either "not real technology" or
simply doesn't exist.

However, "the markets", which I hear are supposed to be made up of people who
understand economies, endorse this thinking, at least to make it the foundation
of their after-the-fact rationalisations. Now, that's not arguing about whether
R&D spending should be higher ... but really, if the left hand has a mistaken
view of the world, how much do we trust the right hand? 

There's one very interesting datum:
>The United States produced $US172 billion of ICT goods, making up 
2.56 per cent of its output.
The US _software_ output is over the $US200 billion mark (source: Software 500,
September 2000). What's Australia's software output? Well: the ABS doesn't
recognise software as an activity independent of services, so we don't know. 

A detail about R&D numbers: if we haven't measured software development
activity, then neither is software development included in measurement of R&D --
and yet it would seem that cutting code is nearly 100% either R or D. 

A reliable census of the .au IT industry - one that understands that industry
metrics created in the 1970s are no longer valid - may not save the dollar, but
at least we could argue about reality instead of merely stating and restating
entrenched positions.

RC
____________________Reply Separator____________________
Subject:    [LINK] Reports damn Australia's IT record
Author: brd@dynamite.com.au
Date:       1/01/70 8:59

Reports damn Australia's IT record
By Tim Colebatch
The Australian
Economics editor 
Canberra
Monday 9 October 2000

Two new OECD reports have quashed Australia's claims to be a "new economy",

ranking it at the bottom of 18 Western nations in the size of its
information technology and communications sector. The reports, released
last week, estimate that Australia's output on IT and communications goods
and services accounts for just 4.1 per cent of its business output, barely
half the OECD average of 7.4 per cent.

The OECD reports show that Australia's manufacturing output in the twin
high-tech sectors has shrunk to negligible levels, while its business
spending on research and development is shrinking faster than any other
OECD country except Hungary. They come at a bad time for the Federal
Government, which has seen the dollar's value slump partly because global
financial markets see Australia as an "old-tech" economy poorly placed to
capitalise on the "new-tech" industries such as IT and communications.

One of the OECD reports, Measuring the ICT Sector, implies that the markets

are right. While Australia is only just below the OECD average in its use
of information and communications technology services, the report
estimates, its manufacturing output is by far the lowest of any of the 18
nations with comparable data.

On the OECD's estimates, Australia in 1998-99 produced just $US484 million
($A904 million) of value-added manufacturing in IT and communications,
equivalent to just 0.14 per cent of its business output. The average for
the other 17 countries was 2.58 per cent, almost 20 times Australia's
level. The second report, Science, Technology and Industry Outlook 2000,
shows that two-thirds of OECD countries have increased business spending on

research and development since 1995 as a share of business output.

Australia had recorded the second steepest fall in spending, even before
recent figures from the Bureau of Statistics showing a further fall. On the

positive side, Australia's RD tax breaks remained relatively generous in
1999, ranking fifth of the 24 OECD countries, although they have declined
since.

Overall, Australia ranked in the middle of the OECD pack for RD spending,
at 13th of the 28 countries relative to the size of the economy, while its
scientists ranked eighth in publications in scientific journals.

The Bureau of Statistics earlier this year reported a sharp slump in
Australia's output in the high-tech sector following cuts in government
support.

The OECD figures imply that what remains are mainly assembly operations,
contributing just 20per cent of the value of their products. By contrast,
Korea's ICT manufacturing sector had an output of $US46.1 billion - almost
100 times Australia's level - and accounted for almost 8 per cent of the
country's business output.

Finland (3.91 per cent) ranked second, followed by Japan (3.48) and Sweden
(3.38). The United States produced $US172 billion of ICT goods, making up
2.56 per cent of its output.

-- 
To succeed in politics, it is often necessary to rise above
your principles.
-- unknown

Regards
brd

Bernard Robertson-Dunn
Canberra Australia
brd@dynamite.com.au