Australia has slid to its worst ever recorded performance in terms of digital competitiveness, coming in at 20th in a global study after dropping five places since last year.
The IMD World Digital Competitiveness Ranking, a study of 64 countries by Switzerland-based International Institute for Management Development (IMD), was released by the Committee for Economic Development of Australia (CEDA) on Wednesday morning.
The study ranks the studied economies in terms of the capacity of the country to adopt and explore digital technologies leading to transformation in business models, government practices and society in general. It looks specifically at three key factors: knowledge, technology and future readiness.
The 2021 World Digital Competitiveness Ranking has placed Australia at 20th in the world, with significant weaknesses in terms of digital skills and training. It continues a three-year decline for Australia, after placing at 15th last year.
Out of the 64 countries studied, only Poland and Bulgaria have experienced bigger drops in that three-year period.
It’s a major fall from grace, with Australia coming in at number five back in 2015.
Australia is now lagging behind much of the rest of the world, and this should sound the alarm for policymakers in the country, CEDA chief executive Melinda Cilento said.
“Despite the COVID-19 pandemic leading to the rapid adoption by businesses of digital opportunities to survive, Australia is not keeping pace with the rest of the world,” Ms Cilento said.
“This means Australia will struggle to keep pace with the most digital competitive nations and it underlines the challenges ahead for Australia to meet the federal government’s ambition for the nation to emerge as a leading digital economy by 2030.
“Lifting digital competitiveness would enable Australia to better leverage digitisation and new technologies to create value for customers, provide new job opportunities, improve government services and find solutions to challenges like decarbonisation and climate change.”
Shadow industry minister Ed Husic placed the blame for the slide in rankings squarely at the federal government.
“It’s concerning but not surprising to see Australia’s continual slide down global digital innovation rankings after eight long years of this tired, uninterested Liberal government,” Mr Husic told InnovationAus.
“We have the domestic know-how to compete with the best in the world, but for that to happen, there must be legitimate and sincere government support. The two constants with this Coalition government when it comes to innovation: a revolving door of ministers and a constant downward slide in our innovation performance.
“They have used the portfolio for flash media opportunities and then the minute the cameras are switched off, they neglect to pay any substantive attention to it.”
Acting Industry Minister Angus Taylor was contacted for comment.
Australia performed particularly poorly in terms of talent, training and education, coinciding with having closed borders since the onset of the COVID-19 pandemic. Australia was ranked at 45 in terms of international experience, a drop of eight spots, 44 for digital and tech skills, and 58 for employee training.
“These results highlight the importance of re-opening Australia’s international borders to skilled migration and skilled occupation lists reflecting the critical need for high tech talent in emerging areas,” Ms Cilento said.
“Continued skills shortages in the technology space will restrict the ability of businesses to embed digital improvements in everyday business processes and stunt future innovation.”
Across the three key categories, Australia placed at 19 for knowledge, 18 for technology and 22 for future readiness.
There were also particularly poor scores around immigration laws (33rd), development and application of technology (28th) and scientific research legislation (29th). Australia’s technological framework was also called out, with communications technology ranked at 57th, and internet bandwidth speed at 42nd.
The rankings placed Australia behind the likes of Ireland, Germany, Austria, Norway and the UAE. The USA was ranked at number one for the fourth year running, while China jumped four places in the last four years. Other countries such as Japan, South Korea and Taiwan also enjoyed significant jumps in the rankings.
The rankings come just weeks after the release of the global Startup Genome report, which ranks startup ecosystems around the world.
In those rankings, Sydney placed 24th while Melbourne came in at 36th.
For Oceania in general, there was a 35 per cent increase in early-stage funding from 2018 to 2020 compared to the previous two and a half year period.
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