Telecoms & Broadband Business Newsletter - July 2014

Editorial: Government misses out on developing a smart economy

There is a genuine agreement among the developed economies that unless costs are taken out of the economy we face a rather bleak future, because in a global economy we are pricing ourselves out of the market.

A key element in this global economy is the fact that, thanks to technology, millions if not billions of people can now participate in the economies of different countries. By the end of the year China will have 300 million broadband users; 60% of people in Africa have a mobile phone, of which 20% are already smartphones; and by the end of the decade 90% of the continent will have access to mobile broadband. In India, Brazil and Russia more and more people are entering the global economy on a daily basis, just look at the people coming from in particular Asia, listed in the database of companies such as SalesForce and Freelancer; all of these people all aiming to get a slice of the money now available to them in developed economies.

And if we look at Google, Amazon, Apple, Samsung, Microsoft and other smart organisations we get a glimpse of where the global economy is moving to. These organisations are taking costs out of large sections of the economy and at the same time delivering better products and services. And they, in general, improve the lifestyle of the people that are using these products and services.

What we see in the May Budget is that the Australian government is not taking costs out but shifting the burden. It is not making the economy more efficient and productive and it not delivering better products, services or a better lifestyle for its citizens. Instead it has reduced the opportunity to achieve those digital productivity benefits. The benefits that people enjoy at the moment could still have been delivered by addressing the inefficiencies in sectors such as healthcare, education and other government services.

Yes, of course we need to take costs out, but it is being done in a rather dumb way. It is frightening to see that in 2014 there was no mention whatsoever in the Treasurer’s speech of smart tools that we could use to increase digital productivity to improve healthcare, develop smart grids and introduce e-education. By being smart the government could deliver the $80 billion savings they want to make without simply shifting these costs to the people who are enjoying the benefits of a developed economy..

If properly planned these $80 billion of costs could be taken out of the economy by making these sectors more effective and efficient with the assistance of the smart tools that we already have.

The government’s ‘hatred’ of the NBN has clearly spilled over into all the other IT and science sectors. Time and time again it has been emphasised – by people representing a broad variety of views – how important it is for a country to innovate and transform itself with, among other tools,  its R&D capacity. Yet here we see NICTA and CSIRO being severely reduced – several parts of these organisations are going to disappear all together; parts that are critical needed to built a smart country.

Again, across the economy and society in general it is well recognised that the stop: start policies from ‘politicking politicians’ are costing the country dearly. One government comes up with a good idea and sets something up and the opposing political party breaks it down. This has a devastating effect, not only on costs but also on any value that we can get from these developments.

The sad story is that it could be done differently if we just had smart policies rather than the dumb ones that are currently proposed.

I may sound like a broken record but how often have I asked the government, both now and while in opposition, what is its vision on the digital economy, e-health, e-education, smart grids and so on?

There has been a deafening silence on anything to do with vision and strategy. For example, they could have come up with policies on how the NBN – in which they invest $40 billion – can help to create that smart environment that can deliver digital productivity.

The government’s continued negativism around the NBN makes it very difficult for the government to turn the NBN into a positive and to discuss how it can be used to make our economy and society more effective and efficient.

The single ‘smart’ positive in the Budget has been the Medical Research Future Fund. However this seems to have just fallen from the sky? What is the vision behind it that is needed for such a massive investment and killed all the other R&D projects? Is there any strategy behind it, who will develop a strategy or will it just be a grab for all? What is the stop: start risk here? Is there any overall plan, or was it just a great idea that came to them a few days ago?

As a country to compete and flourish in a global setting we need to be far more strategic. We need to look at our society and its economy in a far more holistic way.  By not using the smart technologies that are available to us now and by, at the same time, killing a lot of the fundamentals – such as R&D - that underpin the development of a smart country, this government is setting the country back several decades, rather than taking the country forwards.

Around the world the clever governments are implementing smart ICT tools to save money and create a better society, economy and lifestyle for their people. Australia deserves better, but with the current policies in place it will for lots of people certainly get worse until we get political leaders with vision aimed at modernising our economy and society.