Australia’s global digital competitiveness rank starts to rise

Brandon How

For the first time since 2018 Australia’s digital competitiveness ranking has improved, rising six places to 14th, although this remains below the country’s fifth place peak in 2015.

The 2022 edition of the IMD World Digital Competitiveness Ranking includes 63 countries and was released by the Committee for Economic Development Australia (CEDA) on Wednesday morning. It ranks countries’ economies based on their capacity to adopt and explore digital technologies. This is measured along 53 criteria across three broad factors: knowledge, technology, and future readiness.

The rankings were two-thirds informed by “external hard data” and one-third by the IMD Executive Opinion Survey, which considers perceptions of competitiveness. In particular, it considers issues that are hard to quantify such as management practices, labour relations, corruption, environmental concerns or quality of life.

Australia’s ranking movement between 2021 and 2022 was the second largest behind Croatia. Industry minister Ed Husic said “it’s great news to see Australia heading in the right direction on digital competitiveness. Australian businesses have responded to the challenges of the pandemic and working from home, and shown what they can do”.

He also highlighted that the Albanese Government plans to reach 1.2 million tech-related jobs by 2030, which requires an additional 653,000 workers on top of the current workforce.

Criteria that Australia performed well in were for country credit rating, net flow of international students, and e-government, where it ranked first, second, and fifth respectively. The country also ranked 7th for the number of women with degrees.

Two criteria were newly introduced in this year’s edition, government cybersecurity capacity and privacy protection by law where Australia ranked 38th and 23rd respectively. The country was also ranked 31st for cybersecurity and ranked fifth for e-government.

The World Competitiveness Center at IMD Business School notes that “regions with a high score in the e-government criterion and a low score in the government cybersecurity capacity criterion could be considered more exposed to cyber risks,”

The criteria that Australia ranked the lowest on were for employee training, international experience, and graduates in sciences. Australia ranked 49th, 44th, and 52nd on these criteria respectively.

While Australia’s ranked fourth when it comes to investment in telecommunications, it ranks 47th for communication technology and 45th for Internet bandwidth speed. According to the Australian Bureau of Statistics, in 2019-20, unsuitable internet speed was jointly the most frequently cited factor limiting the use of ICT in Australia. Australia also ranked 40th for business agility.

Denmark led the rankings for the first time as the United States dropped to second for the first time in four years. The remainder of the top five, in descending order, included: Sweden, Singapore, and Switzerland.

CEDA chief economist Jarrod Ball said that Australia’s improvement in digital competitiveness rankings shows that the country has regained “ground lost during the Covid-19 pandemic”. However, he notes that there remained room for improvement.

“Australia’s Achilles heel is its future readiness, which underpins a country’s ability to take advantage of emerging technologies, sustaining its digital competitiveness over time to keep pace with the most digitally competitive nations,” Mr Ball said.

“Our future readiness is held back in the rankings by factors such as business agility, entrepreneurial risk-taking and cyber security preparedness. More broadly, the rankings show that Australia must invest in training and international talent to improve digital knowledge across the economy.

“It is clear from these results that with the right ambition and capacity building, Australia can realise greater economic opportunities from digital technology to underpin future economic development. This must be a consistent and enduring focus across all sectors of the economy to overcome the barriers to greater competitiveness called out in these rankings.”

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