Manufacturers urged to find savings in techology

Manufacturers cutting spending because of the high dollar risk shooting themselves in the foot by being far less likely to adopt new technology, an Australian Industry Group survey has found.

Manufacturers cutting spending because of the high dollar risk shooting themselves in the foot by being far less likely to adopt new technology, an Australian Industry Group survey has found.

Titled Ready or Not? Technology investment and productivity in Australian businesses, the survey finds that only 22 per cent of manufacturers surveyed are looking to invest in new technologies in 2013, down from 32 per cent in 2012. About a quarter of businesses surveyed expect to cut spending on new technology, up from only one in 10 a year ago. The same pattern is apparent in research and development where 17 per cent of firms surveyed expect to cut back compared with 10 per cent a year ago.

"It will slow productivity growth," AiGroup chief executive Innes Willox said. "The report finds clear evidence of a link between technology investment and improved productivity. In fact, 33 per cent of the businesses that invested in new technologies in 2012 reported an improvement in their labour productivity, compared with only 16 per cent of businesses that did not."

Based on interviews with 350 chief executives, the report finds that half of those who plan to invest in new technology expect their labour productivity to improve, compared with just one in five of those who do not.

It finds businesses are increasingly worried about their ability to take advantage of the new national broadband network, with fewer than half saying they know how to put it to work for them, down from 80 per cent five years ago.

"This lower business confidence may have a bright side if it means businesses are becoming increasingly aware of their capability gaps," the report says.

Chief executives nominated improved collaboration as the most likely benefit of the national broadband network, expecting their workers to be able to contribute to projects across multiple sites both within the business and with external partners.

They also expected to be able to cut transaction and communications costs and move some of their operations to the cloud.

But mobile technologies were more important to them, having more immediate practical benefits.

Participants in discussion groups blamed economic uncertainty and a hangover from the global financial crisis for the more conservative investment outlook.

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