Digital Economy: Everything old is new again

David Havyatt

The Morrison Government has announced a $1.2 billion package as part of the 2021-22 budget under the strapline ‘Digital Economy Strategy – Delivering a modern and digital economy to drive Australia’s future prosperity.’ This is too little, too late.

The Federal Budget has become a stylised dance. In the lead-up to budget night, journalists will repeatedly ask the Treasurer questions about the content of the budget to which the well-worn answer is that the journalist will have to wait until budget night.

Unless, of course, the government thinks there is a positive announcement that will get lost in the headlines about deficits, debt, and tax rates. So it has been with the (latest) Digital Economy Strategy, clearly provided to the media embargoed till midnight on Wednesday of last week (so online stories started appearing early on Thursday).

The PM and Ministers then fronted the obligatory press conference at a business that was deemed to be relevant to the announcement. On the day of the announcement the government supplied a nice video from Minister Senator Jane Hume and the Strategy on a Page.

digital people consultants
Digital Economy: It been a long road to progress

The other benefit of the pre-budget media drop is that the announcement avoids the detailed scrutiny of the budget lock-up. This ‘strategy’ really needs that scrutiny.

According to Forbes, the term ‘Digital Economy’ was coined by Don Tapscott. The preface to his 1995 book The Digital Economy: Promise and Peril in the Age of Networked Intelligence began:

Today we are witnessing the early, turbulent days of a revolution as significant as any other in human history. A new medium of human communications is emerging, one that my prove to surpass all previous revolutions – the printing press, the telephone, the television – in its impact on our economic and social life. The computer is expanding from a tool for information management to a tool for communications. The Internet (Net) and World Wide Web (Web) are enabling a new economy based on the networking of human intelligence. In this digital economy, individuals and enterprises create wealth by applying knowledge, networked human intelligence, and effort to manufacturing, agriculture and services.

Tapscott was writing at the period of time when the Web component of the Net was just becoming established through early browsers, and commercial Internet services were just emerging, especially in Australia.

The term came to prominence in Australia when in 2007 Prime Minister Kevin Rudd appointed Senator Stephen Conroy as the Minister for Broadband, Communications and the Digital Economy. Progress from then on was shaky.

Rudd’s Australia 2020 forum originally included a workstream of ‘Economic infrastructure, the digital economy and the future of our cities’ but this was deleted when the final committees were announced. More formally the Rudd Government first released Australia’s Digital Economy: Future Directions in July 2009, and #au20: National Digital Economy Strategy in May 2011.

Partially in keeping with Tapscott’s work, these two documents defined the ‘digital economy’ as ‘the global network of economic and social activities that are enabled by information and communications technologies, such as the internet, mobile and sensor networks.’

The form of the words though is a little like describing the Industrial economy as what happens in factories, rather than the transformation of the economy through the application of machines. What Tapscott was describing wasn’t a new part of the economy, but a new economy.

Personal experience was that the bureaucracy at least didn’t understand this to be about transformation of the entire economy.

Intriguingly the strategy was released after the budget that year, resulting in a somewhat scathing column by me about the inadequate budget response on the digital economy. However, when released the strategy was itself a little disappointing,

The focus of the strategy was given away by the strapline ‘Leveraging the National Broadband Network to drive Australia’s Digital Productivity.’ And the underlying ambition was expressed as the (unmeasurable and imprecise) goal ‘that by 2020, Australia will be among the world’s leading digital economies.’ This flavour that the strategy leveraged the NBN has, as we will see, bedevilled strategy since.

Nonetheless this first strategy introduced eight ‘digital economy goals’ covering:

  • online participation by Australian households
  • online engagement by Australian businesses and not-for-profit organisations
  • smart management of our environment and infrastructure
  • improved health and aged care
  • expanded online education
  • increased teleworking
  • improved online government service delivery and engagement
  • greater digital engagement in regional Australia.

Conroy’s second attempt Advancing Australia as a Digital Economy made significant improvement, adding seven enablers that included trusted online identities and encouraging open data.

The strategy was now included a comprehensive list of initiatives that were progressing the goals. All these trial initiatives were completed after the change of Government in 2013 and to the author’s knowledge, none of the evaluation reports have ever been released.

Across both plans the centrality of increased teleworking, expanded online education and telehealth and improved aged care make fascinating reading in the light of the COVID19 pandemic.

While debate raged over whether Australia would have fared better in the pandemic under Labor’s all-fibre plan or whether the shift to the Multi-Technology Mix had been essential to get the roll-out complete in time, what is indisputable was that the country was not ready for widescale teleworking, telehealth and online education. (And on the vexed question of roll-out, the record shows that the 2013 NBN Strategic Review was seriously flawed as it overestimated both the cost and time the original build would require).

Over the course of 2011-12 the ALP faced increasing pressure to justify the need for the higher speeds of broadband that only fibre could deliver. This resulted in Senator Conroy wanting to bias the digital economy projects to those that required the full 100 Mbps.

The Coalition in its 2013 broadband policy launch asserted that 25 Mbps was ‘more than enough’ for any household. The Coalition’s Policy for E-Government and the Digital Economy dismissed the ALP’s strategy documents, writing:

Yet both 2011 and 2013 documents focus on justifying Labor’s mismanaged, costly, delayed NBN by framing it as a pre-requisite for global digital greatness.

The policy went on to note that ‘Many of the aspirations contained in the updated NDES are outside the scope of this policy because they fall under other portfolios.’ Included as an example was ‘expanding the Medicare Benefits Schedule to include remotely delivered services.’

In the pandemic we had Health rapidly putting in place a Medicare-funded telehealth process, which has just been extended. Minister Hunt has also announced that ‘The Government continues to work with peak bodies to co-design permanent post-pandemic Telehealth as part of broader primary care reforms to modernise Medicare and provide flexibility of access to primary and allied healthcare services.’

How much better would our society and economy have coped with the pandemic if there had been continual development of telehealth (and telework and online learning) over the last seven and a half years?

The Coalition’s 2013 policy promised:

If elected, the Coalition will update the NDES during its first term of government. Such an update will include a greater focus on presenting an integrated view across the different tiers of government, much greater input from the States and Territories, a focus on ensuring digital policies and programs at national and State or Territory level complement rather than duplicate each other and a much clearer commitment to leveraging public sector ICT to lead by example.

Despite the editor’s scepticism in a column in March 2016, the promised update was published in May 2016. The update repeated the theme of the policy by stating ‘While the digitisation of the Australian economy is primarily market-led, the government understands that it has an important role in creating the policy framework that promotes the growth of the increasingly digital economy.’ Otherwise, it fell way short of the policy promise, identifying only six activities:

  • Investing in affordable and ubiquitous high-speed broadband.
  • Acting as an exemplar by digitising government services and opening government data sets.
  • Investing in science and research and promoting innovation.
  • Enabling Australians to protect themselves so they can go online securely and safely.
  • Engaging internationally to harness global opportunities.
  • Flexible regulatory frameworks.

None of the promise of ‘an integrated view across the different tiers of government’ appeared.

The Coalition Government’s next effort was Australia’s Tech Future in December 2018. This document recognised that ‘The opportunities afforded by digital technologies are not constrained to technology-based companies and start-ups – they can add value across all parts of the economy.’ It had elements of a strategy by identifying actions that were required across skills, inclusion, digital government, digital infrastructure, data, security and regulation. But rather than being a commitment to new action to accelerate the use of digital technologies, it was more a stocktake of things already occurring.

The latest strategy has many of the same elements as the Coalition government’s earlier efforts. The first group of activities under the heading ‘Right foundations to grow the Digital Economy’ is the familiar catalogue of infrastructure, safety and security, skills and regulation.

The second group, ‘Building capabilities in emerging technologies’, is a grab-bag of sexy tech – AI, IoT, Data Analytics, Blockchain and Quantum Computing. These occupy the space that the cloud occupied in earlier strategies.

The final grouping is ‘Lifting our ambition – Digital Growth Priorities’ which is the typical get business online, digital technologies in existing sectors and digital government and services.

The ultimate failure of a decade of digital economy strategizing is the overarching vision of the strategy; ‘For Australia to be a leading digital economy and society by 2030.’ Recall that the 2011 goal was ‘that by 2020, Australia will be among the world’s leading digital economies’ and you are left wondering what happened in the intervening decade.

There are two reasons for this. The first is that the politics of the NBN spilled over into digital economy strategy – the strategy was shaped by conceptions of the technological requirement of digital infrastructure. But far deeper than this are the three ideological prohibitions on the Coalition developing and executing meaningful strategy.

The first is that solutions to economic and social challenges should be found in markets not government.

The second is a belief that state and territory governments are responsible for ‘service delivery’ even in cases such as health where the funding comes directly from the central government.

The third is that the Coalition is fundamentally conservative, that is, it has an ideological predisposition against change.

Footnote: David Havyatt worked in the office of Senator Stephen Conroy from December 2011 till the Minister resigned his portfolio in June 2013. He was an unsuccessful candidate for the position of Assistant Secretary heading the Digital Economy Branch in 2008. In the debrief after that application a Department official said as a candidate he had talked about the digital economy being transformative whereas all the government wanted was to get businesses online.

Do you know more? Contact James Riley via Email.

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