IBM launches A Snapshot of Australia’s Digital Future to 2050 report

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Sydney, Australia - 14 Jun 2012:

Australia’s new utility – a more powerful ICT, enhanced with ubiquitous high-speed broadband, plus analytics, learning systems and cognitive computing – is becoming the most important utility of this century

By 2050, this new utility is predicted to:
- Generate around $1 trillion in revenue for Australia – almost eight times the $131 billion it generates today
- 46 per cent of Australia’s current industry revenue will substantially benefit from the new utility. Top industries to be transformed:
  - Public Administration and Safety
  - Retail Trade
  - Mining
  - Health Care and Social Assistance
  - Education and Training
- See the demise of 15 industries including Free-to-Air Television Broadcasting, Newspaper Publishing and Motion Picture Exhibition
By 2030 the new utility will continue to shift Australia’s focus from a natural resources to a ‘developed resources’ economy

Our lives, home, health and work will be transformed by the new utility:
- In the future, smarter homes become primary care-centres and enable early detection and prevention of illness
- Personal mobility is likely to become dominated by ‘surrogate transport’
- The balance of power will have shifted to the consumer with online providers of goods and services providing a truly personalised shopping experience

IBM (NYSE: IBM) today launched the findings of a world-first report - A Snapshot of Australia’s Digital Future to 2050. The report reveals information and communications technology (ICT) enhanced with ubiquitous high-speed broadband is becoming Australia’s new utility – as historic and game changing as electricity or telephony.

Written by Phil Ruthven, Founder and Chairman of IBISWorld and commissioned by IBM, the report looks ahead of existing research to examine how Australia can harness this new utility to transform our lives, our cities and the way we interact. It also examines which industries will disappear, which will prosper and what new industries will emerge as a result of our digital future.

The report rates all Australia’s industry classes (509) against the impact of the new utility. Ruthven and his extended Industry Impact Panel assessed the prospects of the 509 classes of industry in the Australian economy over the next 40-50 years. The report predicts that 10 per cent of Australia’s 509 industries, accounting for 23 per cent of the nation’s revenue, will not function without this new utility. A further 23 per cent of industry revenue will use it to drive step-changes in their business. 15 industry classes are likely to demise if they do not reinvent themselves to embrace the digital future; and some may simply be unable to do so.

Andrew Stevens, Managing Director, IBM Australia and New Zealand commented on the findings, “As Australia experiences an unprecedented natural resources boom which has buffered our economy from challenging global macro-economic conditions, it is easy to overlook the need to address the nation’s sustained productivity decline and the importance of securing longer term prosperity. IBM believes part of the solution will come from how business and government leverage our increasingly connected and networked world.”

Author Phil Ruthven, IBISWorld said, “We believe this to be the first report in the world to rate a nation's entire industry classes against the impact of high-speed broadband. We have predicted that by 2050 the new utility will generate around $1 trillion in revenue for Australia, almost eight times higher than the $131 billion it generates today. By 2020, Australia will return to productivity growth of 1.7 per cent due in part due to the new utility, compared with the current 0.6 per cent of the five years to the end of 2011. Some of the biggest industry beneficiaries are our lowest productivity growth industries today, including mining, health and education. Through these predictions it becomes obvious that high-speed broadband is essential for Australia’s economic growth – not a delete option.”

The report finds that Australia will no longer be known for its dependency on the export of natural resources over the next half century. It will become known as much an exporter of services such as tourism, business services, health and education services. The export of tourism alone could match the 2012 mineral exports totalling around $175 billion by 2030.

The digital future is also predicted to redefine the corporate structure. New ‘flatter’ organisations will aim to be flexible and responsive, turning their focus to ‘what’ and ‘why’ work is done instead of ‘where’. This will be enabled by greater mobility technology and openness towards new ways of working - resulting in telecommunications becoming the ‘surrogate transport’ of the future.

Stevens concluded, “Now is the time for Australian industries to start adapting their businesses to leverage the digital future this report envisages. Industries that do not embrace this new utility are likely to see the demise of their business. Through our experience with this evolution together with our employees, forward thinking clients and partners, we are helping businesses perceive and capitalise on these future opportunities.”

For further information and complete findings download the report: www.ibm.com/ibm/au/digitalfuture

Twitter: #ausdigitalfuture

About the report

In A Snapshot of Australia’s Digital Future to 2050, the Industry Impact Panel set out to determine which of the 509 classes of Australian industry would, as a consequence of the new utility, face a likely demise, gain a generalised benefit, experience a significant benefit, or experience a transformational benefit. The 19 industry divisions and their 509 industry classes were assessed separately by IBISWorld, IBES and Resilient Futures before the panel members triangulated their findings based on the following criteria: size of the industry, the industry’s ability to take up technology; the industry’s international competitiveness; and its potential for displacement.

In addition to the rating system, the data was cross-checked against IBISWorld’s Industry Database, comprising quantitative analysis and forecasts of all industries in the Australian economy.

Appendix: A Snapshot of Australia’s Digital Future to 2050

The Macro-environment for Australia

The new utility evolves rapidly – ICT enhanced with ubiquitous high-speed broadband will become Australia’s new utility and the most important utility of this century – one as historic as its predecessors.
Rise in developed resources – Australia will lower its dependency on the export of natural resources over the next half century, becoming as much an exporter of services such as tourism, business services, health and education services.
Productivity improvements – By 2020, Australia will return to productivity growth of 1.7 per cent due in part to the new utility, compared with the low 0.6 per cent of the past five years. By 2050, output per hour worked could double.
Health becomes the key government challenge – Health is clearly the next emerging big challenge for government, amplified by our ageing community and accompanied by the other fast growing components of government spending: social security, education and welfare.

High-Speed Broadband in the Infotronics Age

Massive increase in data usage – By 2020, Australian households will need a monthly data allowance of 200 GB, and 5 TB by 2030. By 2050, we may need broadband speeds of up to 10 Gbps.
Device interfaces will merge with the human body – eventually, we will receive information on contact lenses, our skin will become a touch pad and we will use brain interface machines to command devices via neural control. While in their infancy, breakthroughs in these technologies have already been achieved, laying the foundation for human beings to merge with the digitalised world.

Industries and the Impact of the Digital Future

In 2050, GDP grows to $5.3 trillion in 2012’s price terms – with the services sector contributing over three quarters of this. The GDP for F2012, by contrast, is just $1.5 trillion.
The new utility generates around $1 trillion in revenue for Australia in 2050 – almost eight times higher than the $131 billion it generates today.
The new utility has enabled new industries including more knowledge industries, and more health and education services
The following seven (out of 19) industry divisions benefit most from the new utility:
15 of Australia’s 509 industry classes risk likely demise, unless they reinvent themselves.
The impact of the new utility examining share of the nation’s $4 trillion of revenue. Industry Impact Panel predicted:
- the demise, eventually, of <1 per cent of the current total revenue
- a transformational benefit for 23 per cent of the total revenue
- a significant benefit on 23 per cent of the revenue
- a generalised benefit on the rest (54 per cent).

Australian Business and Society of the Future

Communications becomes the ‘surrogate transport’ – By 2050, Australian households could be allocating up to 40 per cent of mobility spending on telecommunications. This will be driven partly by the use of telecommunications / broadband services to work from home more frequently than we do now, with communications becoming the ‘surrogate transport’ of the era.
Fast growth in medium-sized enterprises – Companies with revenues of $1 million - $100 million will have the fastest growth. This is due to the outsourcing trend by households and businesses - creating new entrepreneurial opportunities; the lower demand for capital (being service industries that are growing); and more flexible lenders.
Teleworking – Perhaps one in four people in the workforce could be working at least partially from home if not full-time in the middle of this century. If so, then we would have five million working from home at least part of the time – taking millions of commuters off the roads. Almost half would directly benefit from – if not actually be enabled by – high-speed ubiquitous broadband.
Smarter cities – our cities will be able to utilise integrated digital infrastructure enabling us to improve their liveability, social and cultural relevance, sustainable urban development