011/06
7 March 2006

ICT Driving Economic Growth

The Minister for Communications, Information Technology and the Arts, Senator the Hon Helen Coonan, today released economic research that further emphasises the significant contribution of information and communications technology (ICT) to Australia’s strong productivity performance in recent years.

The ABS today also released its first serious analysis of the contribution of ICT to the economy further demonstrating the significant contribution that technology is making to Australia’s economic strength.

According to the ABS in 2002-03, ICT accounted for $36.2 billion or 4.6 per cent of GDP, 13.8 per cent of total investment by Government and industry and made a greater contribution to the economy than the agriculture, forestry and fishing, defence and education industries.

Estimating Aggregate Productivity Growth for Australia: The Role of Information and Communications Technology and ICT and Australian productivity: methodologies and measurement are the latest in a series of research papers commissioned or prepared internally by the Department of Communications, Information Technology and the Arts to investigate the impact of ICT on productivity growth.

 “This research provides further evidence that the importance of ICT to Australia’s impressive economic performance has been previously understated,” Senator Coonan said.

The Estimating Aggregate Productivity Growth for Australia report suggests that ICT is providing significant returns on investment to Australian companies. According to the report, investment in ICT returns around 40 per cent in additional value to industry.

This builds on earlier research showing that technology, including ICT contributed up to 85 per cent of productivity growth in the manufacturing sector and up to 78 per cent of productivity growth in the services sector over the last two decades.

The research is being recognised by the international community and has been cited by the OECD in its ongoing work on productivity growth.

“Improving productivity is essential to maintaining Australia’s international competitiveness right across the economy,” Senator Coonan said.

“Understanding that the effective use of ICT is adding value and growing productivity, is critical to the ongoing success of a range of industry sectors.”

The report is the latest in a series of reports looking at ICT and productivity. The series, including Achieving value from ICT: key management strategies, Productivity growth in service industries and Productivity growth in Australian manufacturing, can be found at http://www.dcita.gov.au/communications_and_technology