Information Industries Update 2001 Highlights Slowdown

Friday 2 February 2001 - The latest Information Industries Update has emphasised the fact that Australian Information Industries employment actually contracted during the latter half of the 1990s, despite experiencing strong growth in the first half of that decade.

While information and communication technology (ICT) businesses generated up to 77,000 new jobs in Australia between 1992-93 and 1995-96, they actually lost almost 2,500 jobs between 1995-96 and 1998-99, due to contraction in the ICT manufacturing sector.

This is despite the fact that during the same period the Australian market for ICT goods and services grew strongly to reach over $65 billion in 1998-99 and was expected to reach $75 billion for 2000. Unfortunately, an increasing proportion of the Australian market is being supplied from overseas.

The 100-page report, prepared by Professor John Houghton of the Centre for Strategic Economic Studies (CSES) at Victoria University and sponsored by the Australian Computer Society (ACS), is regarded as one of the most authoritative, independent studies of the Australian ICT industries.

Professor Houghton said the data not only highlighted a net loss of jobs, but also a loss of scale, with a reduction in the number of medium and large companies. In 1998-99, 96 per cent of all ICT businesses operating in Australia employed fewer than 20 people while less than one per cent employed over 100 people.

"Other OECD countries also experienced significant job losses in the telecommunications industry during the early to mid 1990s, but in places like the US and UK, they have started to grow again, whereas we are yet to see any major growth here."

The Update is based primarily on data provided by the Australian Bureau of Statistics, with additional market data drawn from a range of sources.

Other key findings in the 2001 Update were:

• A decline in the number of ICT equipment manufacturing businesses;
• Reduced growth in industry income during the latter half of the decade - an increase of 70 per cent between 1992-93 and 1995-96 reduced to growth of just 30 per cent in the following three year period;
• The Australian market for ICT products experienced strong growth during the survey period, although a smaller proportion of products was produced locally, eg. domestic production accounted for 51 per cent of income from packaged software in 1995-96 compared with 29 per cent in 1998-99.

Recognising the value of the reports and the need to ensure that the volume of independent analysis of Australia's information industries is maintained and extended, the ACS has signed an agreement to sponsor the Updates during 2001.

ACS President John Ridge said the exclusive sponsorship was arranged as part of the Society's commitment to serving the national interest by raising awareness of issues affecting the ICT industries.

"Australia has reached a turning point in its awareness of the importance of innovation in general and the ICT industries in particular, with the Prime Minister's Innovation statement a case in point. The importance of the ICT industries and their potential to contribute to Australia's economic prosperity demands accurate and timely information to inform the decision making process.

"Over the past twenty years, we have seen only limited research into the structure of the domestic ICT industries and that situation needs to change. At the same time, we need access to authoritative information on international industry policy.

Mr Ridge pointed to the Taiwanese Institute for the Information Industries, which undertakes worldwide studies of the IT sector to provide a basis for its policy decisions.

"Our support for John Houghton's reports is just the beginning of the Society's interest in this aspect of professional activities."

The ACS hopes the sponsorship, which was organised by ACS Computer Systems & Software Engineering Board Director, Associate Professor Karl Reed, will help ensure the Reports can be marketed at prices that are realistic for libraries and individuals, as well as Government departments and large corporations.

"Our sponsorship will remove the exclusivity of this information, since the Reports and other similar ones provided elsewhere, are currently priced well beyond the means of most Australians," he said.

Professor Houghton welcomed the ACS sponsorship, saying it would deliver a range of benefits both for the CSES and the industry.

"The ACS is a natural partner for the Centre and we respect its earlier work in these areas. Of particular importance to us is the fact that we will be able set the price at a level that guarantees wide distribution, both here and overseas," he said.

Professor Houghton said the arrangement was truly arms length, with the Society asserting no editorial control.

This media release is available on the ACS Web site at http://www.acs.org.au/news/020201.htm

Abridged highlights of the Report are available online or for a full copy, media can contact Caroline New.

ENDS

The Australian Computer Society is the recognised association for information technology (IT) professionals, attracting a large and active membership (15,000) from all levels of the IT industry and providing a wide range of services to Members. A member of the Australian Council of Professions, the ACS is the public voice of the IT profession and the guardian of professional ethics and standards in the IT industry, with a commitment to the wider community to ensure the beneficial use of IT.See the ACS Home Page for more information.

John Houghton, Professorial Fellow (CSES), Tel: (02) 6282 1981 or (0409) 239 109, Email: John.Houghton@pobox.com

John Ridge, ACS President, Tel: (02) 9223 9499 or (0407) 913 992, Email: jridge@mra.com.au

Caroline New, Caroline New PR, Tel: (02) 9980 8060 or (0411) 889 456, Email: cnew@acslink.net.au