The digital economy contributed $79 billion to Australia's GDP in 2013-14 and this is expected to grow rapidly in future.
In this 2015 report, Deloitte investigates the contribution of the internet to the Australian Economy. The report finds that in 2013-14 the digital economy contributed approximately $79 billion to GDP. That is the equivalent of 5.1% of Japanese GDP for the period in question. Deloitte anticipates this data-driven innovation has the potential to contribute an additional $60 billion each year to the Australian economy by 2020. This would bring the total contribution of data-driven innovation to $139 billion each year.
The digital economy has delivered these benefits by transforming existing businesses and workplaces as well as driving job growth and progress through new organisations and occupations, according to the report. Deloitte estimates that 97% of specialist ICT workers work outside the ICT industry demonstrating the reach of the digital economy across businesses in the Australian economy. Business transformation is increasingly moving into the latest technologies such as the cloud, data analytics and machine-to-machine technologies although less recent developments in digital technology like social media continue be important.
In addition to the direct benefits to GDP generated by the digital economy in Australia, Deloitte emphasises the indirect benefits contributed by the digital economy. In particular, the digital economy provides benefits by allowing households to quickly search for information, access goods and services from a variety of locations, conveniently undertake a range of activities (e.g. paying bills) and conduct recreational activities (e.g. social media and browsing). These benefits are hard to quantify, but are estimated to be worth $75 billion in 2013-14, noting that some of this will already be captured in the contribution to GDP.
Further to enhancing household welfare Deloitte indicates that the digital economy has benefited government. Much like household welfare these benefits are mostly not picked up by GDP measures as they relate to non-market interactions. The main sectors where the digital economy has influenced government are administration, education and healthcare, which combined to form 16% of GDP in 2014. The increased efficiency and productivity facilitated by digital technologies in these non-market sectors is estimated to be worth approximately $7 billion for 2014.
While the digital economy is predominantly a market-driven phenomenon the considerable potential for the digital economy in future is reliant on government policies, according to Deloitte. A major challenge for policymakers in future, will be fostering the potential of the internet while managing the risks of the internet. The priorities for policymakers to achieve this will be increasing access to high-quality and affordable broadband, promoting research and development into the telecommunications industry and developing an adaptive regulatory framework. Deloitte claims that combining these policy elements and integrating the digital economy in the government’s own service provision will be essential for Australia to achieve the benefits estimated in the report.