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Sydney, Australia - 22 May 2009: IBM Australia today announced the findings of the ‘The economic benefits of intelligent technologies’ report conducted by Access Economics. Commissioned by IBM, the report reviews the potential economic benefits from the adoption of smart technologies and systems, and reveals that adopting smart technologies in electricity, irrigation, health, transport and broadband communications will contribute:
Smart systems will allow us to use this data far more effectively, providing the potential to radically alter our economy and society for the better. According to Glen Boreham, Managing Director, IBM Australia and New Zealand, this research demonstrates that the investment in smart technology has significant GDP and jobs benefits.
“This type of investment should form part of any stimulus package or budget allocations into the future. This is why we are delighted to see the government’s announcement in the budget that it will provide $100 million in this next financial year for an integrated system of renewable energy, smart grid and smart meter technology and infrastructure.
“This is exactly the type of investment we have been calling for. It is an important step forward and we strongly endorse it. IBM would like to see this type of smart technology approach adopted in all infrastructure projects,” Mr Boreham said.
Whilst adoption of smart systems is encouraged by the Australian Government, deployment is still in its infancy, states Dr Ric Simes, Director of Access Economics.
“When you look at the large amounts of data that are collected on a daily basis and how that is being used, the benefits of investing in smart systems become extremely compelling. Given the improvements that could be made in terms of decision making and societal coordination, this will ultimately lift our economic efficiency and living standards,” Dr Simes said.
About the report
The Access Economics report reviews the potential economic benefits from the adoption of smart technologies and systems. The report considers five areas where intelligent technologies and systems may make a significant contribution. These are in electricity, irrigation, health, transport and broadband communications.
The report explores the fact that the amount of data collected in all areas of human activity is vast and is expanding rapidly. Smart systems will allow us to use this data far more effectively, providing the potential to radically alter our economy and society for the better.
The aim is to estimate the magnitude of the potential economic benefits that could be delivered through the widespread adoption of smart technologies and systems. The report does not identify specific policy actions that could foster this adoption although it does emphasise the importance of complementary microeconomic reforms in order for the technologies to realise their potential.
A considerable literature involving Australian and overseas studies of aspects of the economic benefits of the smart technologies has emerged in recent years.
The findings from this literature have been used as a basis for estimating the eonomy-wide benefits of the adoption of smart technologies in each of the five aeas identified. Access Economics’ general equilibrium model of the Australian economy is used to analyse these economy-wide effects in a consistent fashion.
Given the difficulties involved in identifying and measuring many of the benefits that smart technologies are likely to deliver, a number of conservative
assumptions have been adopted at various points of the analysis. In each of the five areas, the benefits far outweigh the initial capital costs involved.
The precise extent of the economic benefits is dependent on the state of the economy that applies when the technology is rolled out. The closer the economy is to full employment, further economic benefits will be reflected in higher productivity levels, while if the economy has spare resources, the benefits produce larger increases in employment. In addition, the total net benefits tend to be much larger in an economy that has spare capacity, as is currently the case in Australia where unemployment levels are rising.
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