news A national survey conducted by the the Australian Industry Group and Deloitte of Australian chief executives has revealed that business investment in new technologies is resulting in higher productivity, better innovation, improved energy efficiencies and better work safety. The survey involved 540 CEOs across many sectors including manufacturing, services and construction.
The investment in new technologies, estimated at $25 billion over the past three years, has been implemented at a time when non-mining, trade exposed sectors have faced challenges because of the strength of the Australian dollar, according to the report (available online here). 40% of the businesses that developed new technologies did not take advantage of the newly implemented Research and Development (R&D) tax incentive, revealing that this was not the trigger for the investments. More than 27% of the businesses that did utilize the R&D incentive believed it had a negative impact on business, 22% were uncertain and 25% believed it would have a positive impact on business.
The survey also explored the preparedness of businesses to take advantage of the opportunities afforded by the National Broadband Network (NBN) being constructed. Only 30% of the businesses were informed about the impact this would have on their businesses even as they are preparing to train their workforce to utilise the opportunity. Just over half the respondents knew how to take advantage of the possible opportunities.
Other key findings are that 80% of the respondents had invested in technologies in the past three years and 16% of their productivity gains were attributed to this new investment. Productivity gains are the prime reason 71% of the businesses initiated the investment. Construction companies and manufacturing companies were motivated to invest to improve workplace safety. Computer hardware and software, particularly automation and control equipment, were also priority areas for investment.
Heather Ridout, the Chief Executive of the Australian Industry Group said: “With the adoption of new technologies being an important contributor to business-level productivity improvements, the report shows that businesses in the manufacturing, services and construction sectors have been active investors in a broad cross-section of new technologies over the past three years. Investment in new technologies accounted for an average of 21% of respondents’ total investment over this period.”
Damien Tampling, the Media and Telecommunications leader of Deloitte National Technology said that management of data from the Internet and social media channels was one reason for the jump in technology investments. “With our capacity to tag and measure anywhere, anytime and across multiple channels, ensuring there is adequate technology, digital media knowledge, and expertise at the most senior levels of business, is critical” said Tampling. Businesses use these tools to better understand their customers so that they can deliver the right kind of products and services.
Speaking about the impact of the NBN on businesses, Tampling said “In addition with investment in new technologies delivering greater productivity, much of it through the Internet, grasping the potential of this change agent, including the opportunities, services and applications of the National Broadband Network, will help drive further productivity. It will also expand customer bases and enable jobs growth to meet the forecast of an additional 80,000 Australians to be employed in areas directly related to the Internet over the next five years.”
The report highlighted a few areas for policy action. Lowering the company tax rate is a practical way to stimulate new investments. Government needs to improve the dissemination of information about the new technologies being implemented for furthering their impact on the economy and the new R&D tax incentive needs to be further monitored and analysed to improve efficacy. Federal Government also needs to educate small and medium businesses on how the NBN can provide better opportunities for their businesses.