Telecoms & Broadband Business Newsletter - March 2013

Editorial - CSIRO’s push to assist in the digital transformation of Australia

One of our arguments in relation to getting a national broadband network underway – rather than just discussing it - has always been that it will be impossible to come up with a fully-covered cost benefit plan stretching 10 or 20 years into the future. The best way is to agree to a plan that:

• has widespread (not necessarily full) support;
• is based on a national vision; and
• has a flexible strategy attached to it to cater for the changes that will undoubtedly occur over the period of its implementation.

Back in the 00s BuddeComm argued that such a leadership approach would allow for action and would stop the endless political discussion and associated procrastination that takes place in so many other countries. When it is just a plan people tend not to pay much attention, as there is no urgency for them to address the issue. But as soon as implementation commences people will have to start thinking about what it means for them personally.

Australia followed this plan. When the NBN plans were discussed between 2007 and 2009 they had the full support of the telecoms engineering community, and that of 70%-80% of the population and businesses.

On a high level the technical and regulatory platform was agreed upon by the entire industry. The key difference that remained was more politically-driven – how much government intervention was acceptable? Something like that is rather like a religious point of view in that differences will always remain. Unfortunately such discussions make headlines and undermine the willingness of people to think more strategically about the real impact of such a plan. They sit on the fence and procrastinate.

However, when the implementation stage of a plan is reached people and organisations can no longer afford to sit on the fence and do nothing. They must confront the reality that such an infrastructure is going to become part of society and the economy.

Once the physical implementation begins and people start to see infrastructure activities in their towns and suburbs the discussion moves to the social and economic aspects – what’s in it for me?

The reality of the rollout – and the fact that by now everybody (even the Opposition) believes that FttH is the end solution – is now resulting in the outcomes we foreshadowed; people are waking up and starting to think about what this means for them. The effect of this turnaround in thinking is enormous. 

Across society organisations are starting to look at what this new infrastructure means for them. This is helped by the experiences organisations have already had regarding the impact of the internet, plus the fact that the current financial and economic climate is forcing cost-cutting and improved productivity. This is particularly critical for resource-rich countries such as Australia  that have been enjoying a golden period; however, the wealth created there has made them less competitive and less productive in other areas. This is one of the reasons all the resource-rich countries are now investing heavily in broadband infrastructure – they need to improve their productivity in other sectors to rebalance their economies.

It is great to see that the debate has shifted to what is needed to transform society and the economy in order to obtain the benefits of digital productivity.

The NBN is no longer the story. Instead it has created other, new stories in the many different components of our society and our economy.

With slow-growing and stagnating developed economies and increased competition from the highly productive developing economies there is no other way for the developed economies to maintain their current economic and social lifestyle but to become more productive; and there is no better way to do this than by utilising smart digital technologies.

Within that context perhaps the single most important element will be the smart use of big data. As BuddeComm has been saying for many years, this is also why we need the NBN – not to get faster access to the internet, but to build the right digital infrastructure – infrastructure that has the capacity, reliability, security, etc to allow the country to increase the amount of data needed to create digital productivity, to create a smart country – not just more data but also the capability to connect that data to achieve smart outcomes. The growth in M2M will be phenomenal.

Organisations are starting to understand this, and this is certainly stimulating the shift in the debate. It reflects the increased understanding of people in general regarding the benefits of the digital economy. We therefore applaud the initiative of Australia’s national R&D organisation, CSIRO, in investing $40 million annually into a Digital Productivity and Services National Research Flagship, which is aimed at adding $4 billion per annum to the national economy by 2025.

While that is an impressive amount BuddeComm believes that the real benefits are more far-reaching as the initiative will play a key role in the overall transformation of the economy, a transformation that is desperately needed to maintain the lifestyle we have created for ourselves since WWII.  Most people have shifted their personal views of their own future – from earning more money to securing their current lifestyle. Unfortunately most economists base progress on productivity gains, not on lifestyle issues.

One example alone should make everybody sit up and listen. Currently 20% of the national budget (all levels of government combined) is spent on healthcare, and this is set to double over the next 40 years. This, of course, will not happen, as it is totally unsustainable – it would, for example, mean that the total State budgets would have to be spent on healthcare alone.

While it will not happen the alternative, in a linear scenario, will have to be a very dramatic decrease in the level of services and the affordability of medical services. For many years BuddeComm has earmarked healthcare as the key sector that will profit from the gains we can make in digital productivity. The financial gains in healthcare alone could, over a period of 10 years, pay for the total cost of the NBN.

The CSIRO initiative is one of the most important decisions in relation to the importance of the digital productivity for our economic future, together with the decision to build the NBN and the government’s policy to place Digital Productivity at a ministerial level. And aside from its direct benefits it will further assist the country as a whole to get on with the urgently needed transformation of the Australian economy.

Obviously the CSIRO is not doing this in isolation. It already has more than 20 partners involved in the initiative, and this number will increase to include many more. And, again, the combined impact of this, as well as the separate individual contributions these organisations will make to the digital transformation, will be of immense value to our lifestyle and to the economic future of the country.

Paul Budde