Digital Economy Future Directions.
BuddeComm has send its submission to the Australian Government’s paper on the Future Directions of the Digital Economy. In this we address government and industry strategies that are needed to maximise the benefits that can be gained from stimulating the growth of the digital economy in Australia – in general terms as well as through the funds that the government has indicated it will make available for this purpose.
The digital economy calls for a fundamental change in policies. The digital infrastructure the government is funding through the NBN needs to be developed so that it can provide a multiplier effect to developments in healthcare, education, smart grids and e-commerce, as well as in Internet and digital media services. This can only be achieved on an open underlying infrastructure.
At the same time the government and the industry will need to adopt a new way of thinking. A trans-sectoral vision is required to achieve the multiplier effect the NBN has to offer. At the same time trans-sectoral thinking is required on an infrastructure level, looking at synergistic opportunities between various infrastructure projects (telecoms, electricity, roads, sewerage, etc). The concept of trans-sectoral thinking is referred to in more detail in one of our blogs: http://www.buddeblog.com.au/trans-sectoral-thinking-required-for-governments/
Open Access Principles presented below have been made available to government below but are for clarity also included again in this report . See also: Global – Infrastructure – Open Networks.
Multiple networks should, and can, be developed independently of each other over one single open fibre-based infrastructure. This will be an enormous boost to economic development; it can spearhead new economic activity in multiple sectors of the economy, rather than just in telecommunications.
A move to open networks and trans-sectoral thinking will result in different business models being generated, models based on functionalities rather than on vertical integration.
Trans-sectoral thinking is also essential to maximise the social benefits available via the digital economy. Government departments and industry regulators need to remove the barriers that have sprung up – based on the old, now obsolete, models – in order to align their departments with the digital economy.
Open networks in a digital economy allow for maximum user participation, interactive and personal. They enable everybody to maintain and improve lifestyles that suit them, rather than being forced into the boxes dictated by the vertical structures that currently exist in government. Perhaps we should have a trans-sectoral Minister looking at synergy opportunities between the various Departments. The telecommunications sector is the essential backbone of the digital economy and one of the major barriers to maximising the potential benefits is its vertically-integrated structure.
In countries like Australia the maximum benefits of the digital economy can only be achieved through cooperation.
We are already seeking such cooperation through the Digital Economy Industry Workgroup (140 companies, 200 people), and have been very pleased with the positive responses from Ministers Conroy, Gillard, Ferguson and Tanner. We hope to discuss with them our views on open networks, trans-sectoral models and multiplying the benefits of the NBN.
In Europe it has been estimated that open networks and trans-sectoral development can increase overall GDP by 1%-2%. As a very rough calculation, based on US data used for their Economic Stimulus package, at least 100,000 new jobs could be created in Australia.
Paul Budde
February 7th, 2009 at 9:34 am
100,000 new Australian jobs would be great but I don’t understand the flow of your logic.
If the current increase in unemployment is due to the current drop in economic activity (as measured by GDP) which in turn is being caused by a drop in aggregate demand, then won’t reversing it require an increase in aggregate demand, either by stimulus in the short term or waiting for prices to drop to a level where people will start buying more goods and services in the long term?
If I understand your argument correctly, you are saying that trans-sectoral development will increase GDP which will increase jobs. I can see how this can work in the long term, but how can improvements to supply increase aggregate demand in the short term?
February 10th, 2009 at 12:27 pm
Thanks Peter,
Difficult issues of course. In general terms infrastructure investments tend to have a longer term effect. What, at the same time, I am advocating is that we in preparation of the availability of this infrastructure we should start building the e-applications that can be delivered over this network. This in itself will require a lot of preparation and investments here, there could be a more direct short-term effect. There is a US forecasts that $10bn investment in broadband provides 500,000 jobs, $10 bn in smart grids 240,000 jobs and $10 bn in e-health 210,000 jobs. See: http://www.itif.org/index.php?id=212