A new report by the Australian Technology Council has concluded that Australia’s large, medium-sized and start-up businesses need to increase spending on technology adoption to boost overall technology investment levels and contribute to an economy-wide effort to ensure the country does not fall into decline. behind the rest of the world.

Report, published in novemberHe argues that Australia should adopt a national technology investment target. It is suggested that increasing total technology investment from 3.7% to 4.6% of the country’s GDP could contribute to A$39 billion in productivity growth by 2035. This increase will require an increase in both technology adoption investment and technology research and development spending.

Increasing spending could boost economic productivity and enable Australia to remain competitive in global markets, researchers said.

Technology adoption is part of the path to productivity

The Technology Council reports that Australian businesses are currently investing $90 billion in technology adoption; this is equivalent to 2.2% of GDP, or about $2,100 per capita. While this figure increased from $1,700 per capita in 2016-17, its share of GDP remained unchanged.

According to the report, investing in technology adoption involves acquiring technologies that are new to the business but not essential to the industry, country or the rest of the world. This distinguishes adoption spending from R&D technology investment, which involves developing entirely new technology.

The Technology Council argues that a GDP increase of at least 0.4% in investments in technology adoption in large, medium and small businesses would total 2.6% of GDP in 2035. A 0.7% increase in R&D expenditures would bring technology investment expenditures to 4.6%. GDP currently appears to be well above the projected 3.5%.

The researchers concluded that $167 billion in productivity gains could be unlocked by 2035 if Australia increased its total technology investment to 6.9% of GDP.

“Australians have some of the highest standards of living in the world,” said Tech Council CEO Damian Kassabgi. in a press release. “We need to see an increase in productivity growth to ensure we can continue to grow.”

He added: “Australia’s productivity growth has been falling for some time and this is one of our most pressing economic challenges. Turning this around and achieving the level of growth we need to see our economy thrive requires greater technology development and adoption.”

Australia lags in business technology adoption

The report stated that Australian businesses are lagging behind the European Union in adopting technology.

Australia and EU Compare relative technology adoption levels using the Digital Intensity IndexMeasuring factors such as digital skills, cybersecurity, digital business management, digital technology and infrastructure, e-commerce and online presence.

Australian businesses are more clustered in the lower rungs of the rating system. Just over half of businesses in Australia have a “basic” level of technology use, compared to 41% of businesses in the EU. Only 10% of Australian businesses are classified as “established” or “advanced” compared to 25% of firms. in the EU

This low figure occurs despite the practical benefits of adopting the technology. Research from the Australian Office of Innovation and Science and AlphaBeta It showed that the Australian Securities Exchange’s top 200 firms that actively invested in technology adoption and R&D between 2005 and 2016 were more likely to survive and grow than other firms in the index that prioritized paying dividends.

A survey conducted by Ai Group in 2024 found that: Australian businesses are tackling technology adoption challenges. It was found that 84 percent of businesses surveyed are actively adopting new technologies, including 100 percent of large businesses, 82 percent of medium-sized businesses, and 63 percent of small businesses.

How much technology adoption does it take in businesses in Australia?

The Technology Council is confident that adoption investment from large, medium and small businesses will increase. Given current technology adoption levels shown in the EU comparison, researchers predict:

• 0.19% of GDP could contribute to technology adoption investment by 2035, with the majority of small businesses (12%) moving from a “core” state of digital intensity to an “emerging” category.
• If a larger share of medium-sized businesses (17%) moved from the “developing” stage to the “established” stage, they could contribute 0.16% to GDP, with the help of innovative small businesses scaling up to this size.
• If 7 percent of large enterprises moved from “established” to “developed” status, an additional 0.05 percent of GDP could be derived from large enterprises. This will see 5% of local businesses labeled as “advanced”.

Economy-wide executive education could boost investment

The Technology Council has recommended that Australia examine opportunities to establish technology industry-led executive education programs for all types of businesses in the economy. Training programs can focus on opportunities for businesses to adopt technology and manage technology risk.

“Management skills appear to have a significant impact on productivity, in part through managers’ roles in facilitating innovation and harnessing the benefits of technologies,” the report said. Latest Gartner research Found that CIOs are more successful when they elevate CXOs across businesses.

The researchers also suggested that these programs should be created as “vendor-neutral executive education programs,” avoiding association with specific technology interests. This will encourage wider participation in developing technology skills across the economy to support future investment.

“Technology investment enables companies to commercialize their research and create new business models, making our economy more productive and resilient,” Kassabgi said. “Increasing adoption of technology also has practical benefits that can accelerate the growth of both small and large businesses.”