Transcript Title

The Role of ICT Innovation and
Technology in Productivity
ABS NatStats Conference
David Skellern
Chief Executive Officer
Farm water - what is the problem?
• Seepage, evaporation and
operational losses mean that
less than 50% of water gets to
the plant
~50%
lost
Part of a solution:
 Improved planning
 Integrated water resources mgmt
 Modernized infrastructure
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Water Information Networks
Channel System
Commercial
Regulator
main
Gate
Repeater
node
Central
node
(data model)
Water managed from reservoir to plant
On farm
experimental
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Farm nodes
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An example of what can be achieved
WIN-1 innovations in sensing and real-time closedloop control on the farm have end-user benefits:
• Dairy (irrigation for dairy pasture production)
– 26% water savings per irrigation season (ML of water)
– 27% improvement in water productivity (tonnes of dry matter /
ML of water)
– 38% improvement in gross margin (AU$ / hectare / year)
– Lower peak demand on irrigation water distribution system
• Horticulture (irrigation for ‘Pink Lady’ apple orchard)
– 73% increase in gross returns (AU$ / hectare)
– 74% increase in economic water productivity (AU$/ML of water)
Source: VIC STI Program “Regional and economic benefits through smarter irrigation”,
2005 - 2008
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ICT influence on productivity & wellbeing
ICT increases productivity and improves our
wellbeing by
• Creating new-to-world products, processes
and services - often accompanied by new
industries
• Increasing the efficiency of personal,
business and government transactions and
processes
• Triggering transformation of existing
industries through enabling new business
models
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Lending Industry - Home Loan Process
Mortgage
broker
Credit
bureau
Lender
Loan
customer
Property
Valuer
Mortgage
insurer
State revenue
office
Settlement:
Customer’s solicitor
Seller’s solicitor
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Land titles
office
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Going online has major benefits
• Some highlights
– Increased speed/efficiency of transaction processing
 Commonwealth Bank reports* that the time for
approving a home loan extension has moved from 1422 days to 14-15 mins.
– Increases participation through reduced complexity
e-Application reached 89% over 3 years to 2008
Before: $1 billion spent on the loan approval process every
year in Australia
Now:
• Savings* min $68 of $450 average loan approval cost
• FY2009 total savings* in range $46-107 million
* Australia’s Digital Economy: Future Directions ©
Commonwealth Bank of Australia and the Commonwealth of Australia, 2009
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The industry is transforming
• Going online leads to Industry Structural Change
• Growing trend in advanced lending process is
outsourcing
• Mortgage Broker aggregators
• Property Valuers
– scaling from a dozen in-house valuers to 100+
contract valuers using mobile apps & Web
services remotely
– readying for the first National Valuer Network
(aggregator)
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The Cost of Australia’s ICT Trade Deficit
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OECD findings on R&D and Productivity
• Strong relationship between R&D and
productivity (16 countries, ~20 yrs)*
– 1% increase in business R&D corresponds to 0.13%
increase in productivity
– 1% increase in public R&D corresponds to 0.17%
increase in productivity
(av increase in MFP over study period = 0.8%)
• Australian relationship #
– 1% increase in business R&D corresponds to a
0.11% increase in productivity
– 1% increase in public R&D corresponds to a 0.28%
increase in productivity
*Gullec & Van Pottelsberghe, From R&D to productivity growth: Do the Institutional Settings and Source of Funds Matter?, OECD 2001
# Sources of Knowledge and Productivity: How Robust is the Relationship, OECD 2006
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Australian investment in R&D (2006/07)
• Australia R&D expenditure: ~$21 B; 2.01% of GDP
–
–
–
–
OECD average 2.26% of GDP (Australian gap ~$2.6B)
EU target 3% of GDP by 2010, likely to achieve 2.6%
Many countries invest over 3% (eg Sweden, Japan,…)
BERD: 59%, GOVERD: 14.5%, HERD: 26.5%
• Australian ICT R&D expenditure: ~$2.3B (~11%)
– BERD: 84%, GOVERD: 5%, HERD: 11%
(EU >20%)
• We’re under-investing in ICT R&D
BERD: Business Expenditure on R&D
GOVERD: Government Expenditure on R&D
HERD: Higher education Expenditure on R&D
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Collaboration
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Collaboration - Firms
Firms collaborating on innovation activities by size, 2004-06
Turkey
United Kingdom
Australia (2006-07)
Italy
New Zealand (2006-07)
Norway
Slovak Republic
Spain
Germany
Luxembourg
Portugal
Ireland
Netherlands
Large firms
Poland
Czech Republic
France
Sweden
Greece
Estonia
Austria
Belgium
Slovenia
Finland
80
70
60
50
40
30
20
10
0
Denmark
SMEs
Hungary
%
OECD Science, Technology and Industry Scoreboard 2009 - OECD © 2009
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Thank you
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