Australia’s Digital Purpose

It is an often-repeated mantra: the digital economy is dramatically changing the way we live, work, and think. The recent lockdowns of entire countries, the need for physical isolation caused by the pandemic of 2020, are — paradoxically — giving us even more reasons to direct our attention to the digital economy: digital products and services are less — if at all — affected by disruptions in supply chains, transportation networks, and cross-border traffic. While a lot of “traditional” industry businesses are suffering, the digital economy can more quickly adapt to the dramatic changing in the way we live, work, and think, as physical world’s constraints and challenges are often creating opportunities for the digital world’s business.

Physical world’s constraints and challenges are often creating opportunities for the digital world’s business.

According to our research, the digital economy is also significantly impacting what citizens and businesses expect from their governments. There is an expectation that the government and its role evolves, just as the entire economy does.

Australia has a relatively low stake in the global platform economy, as indicated by numerous studies. Our future readiness is low, according to the IMD World Digital Competitiveness Ranking 2019 (we dropped from the 7th place in the world in 2016 to 14th in 2019). Our digital economy is stalling, according to the Digital Evolution Index 2017. In the borderless digital economy, minimal share in the gains and control over the economic activity is in our hands, unless local platforms get a significant share in the market. This imbalance is concerning — we don’t have many local platforms with a substantial share in the market. And there is a genuine risk of the situation becoming even worse. Governments can either focus on addressing the challenges — being reactive, or identifying and capitalising on opportunities — being proactive. The choice should be obvious. Here are some recommendations on what governments could do to help digital business thrive and therefore help increase the impact of Australian companies in the digital economy.

  1. Consider proactive governance as an approach to help the economy thrive.
  2. Acknowledge the difference between digitisation and digitalisation of the economy.
  3. Recognise a changed perception of the role of the government.

We have seen several cases of international platforms entering the Australian markets in an unregulated space, or clearly against regulations in place. Many of these cases, could have been predicted; we are rarely one of the first countries a platform enters. While citizens welcome many of these platforms, businesses are less happy to see the “rule breakers” arrive. I have personally interviewed multiple Australian digital solution providers and platform operators who found it unfair to be penalised for waiting for the right legislation to be introduced, while others — less concerned with following the rule of law — were gaining market share.

Proactive governance entails ongoing efforts of the government to understand any potential legislative challenges and opportunities caused by the entrance of global platforms and — recognising that legislation as prevention of market disruption mostly does not work in the digital economy — prepare the market so that local platforms can grow, even before large competitors from outside of Australia decide to enter the market.

We need tiger teams within the public sector.

Governments should set up so-called government tiger teams, that continuously scan the environment and analyse global markets for the emergence of platforms and competition that may be disruptive to the Australian industries and — where needed — refresh legislation accordingly, to help Australian players prepare.

These tiger teams would not only allow for proactive governance. Based on our experience, they significantly increase collaboration between departments and various levels of government, for the benefit of the nation.

Additionally, results of such environmental scans could be shared with others, helping raise the digital confidence of businesses — confidence in making the right choices in the digital space.

Acknowledge the difference between digitisation and digitalisation of the economy

We have seen the great focus of the Australian government on providing the right infrastructure and exploring new technologies that can help the economy grow. From hygiene-factor infrastructure investment — such as NBN — through more modern communication technologies such as 5G, to the exploration of the potential of technologies such as blockchain and AI. This focus is commendable. However, our research of Australia’s economy has shown that this increase in Australia’s Digital Capabilities needs to be accompanied by a focus on Digital Impact. In our research, we are indicating that Digital Impact factors are strong Vision, Leadership, Governance, Innovation Culture, Value Alignment, Business Agility, and Revenue Resilience.

In other words, technology investment — or digitisation — is not enough. We need more focus on helping Australians, and Australian entrepreneurs think differently in their business once they have access to digital technologies — this is what we call digitalisation. I am far from suggesting that the Australian government should guide every step organisations make, or play the role many industry associations play these days. But I do recommend that there’s a role for the government to ensure the right activities — such as creating the right culture or developing revenue resilience of organisations are incentivised.

The government needs to increase its focus on activities that incentivise building the right culture in Australia. We can start from — what I call “talking the talk” — promoting exemplars of successful organisations in this space. This promotion needs to be followed by facilitating collaborations (Australian landing pads around the world are a great initiative) and partnering with Australian institutions not only in pure technology space but also in areas where the digital technologies enable success.

Changed perception of the role of the government

We see a considerable need for the government to consider being not only a service provider, funder and regulator in the economy, but also being a facilitator, partner and advocate.

New government roles: facilitator, partner, and advocate.

Lessons from leading digital economies, such as Singapore or Israel, show that there is an excellent potential for the government to catalyse the growth of particular sectors in the digital economy, by orchestrating players in this space.

Government as a facilitator highlights the compelling directions of growth, and — through visionary leadership — brings many players on the same path. Facilitation of growth in farming or mining technologies are just two examples, where the government can play a significant role, without entering areas of responsibility of others.

Government as a partner should consider prioritising collaboration with Australian digital businesses. In Queensland, we have witnessed many successful cases of “government being the first customer” leading to the successful growth of firms.

Finally, government as an advocate is a government that promotes exemplary cases and creates a national culture of celebrating success in the digital economy.

I recommend that the Australian Federal Government considers expanding its activities in these three areas: facilitationpartnership, and advocacy.

I believe Australia’s Digital Purpose should be to empower all Australians to thrive in the Digital Economy. I hope the three recommendations in this article are helpful. We need to focus on proactive governance, digitalisation, and a shift in the understanding of the role of the government. These focal points are going to bring us closer to taking a leader, rather than a follower, position in the digital space.

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