Saving Australia’s competitiveness

Can a greater investment in technology and engaging young people in ICT careers improve Australia’s lagging productivity?

While the debate around Australian productivity is bogged down with arguments about Sunday wages for cafe staff, US networking giant Cisco System last week showed how technology investment is the key to restoring the nation’s competitive position.

“The only things I can predict are that things will accelerate and pressure for companies to provide new services and increase productivity will increase,” Cisco Systems’ Chief Globalisation Officer, Wim Elfrink, told Business Spectator last week.

Elfrink was visiting Australia to open the Melbourne Cisco Live Conference, the Australian leg of the company’s annual series of worldwide events where the global networking giant demonstrates its vision of connected business.

Connectivity and competitiveness

For the past two years Cisco has been promoting the ‘Internet of Everything’, the connected world of industrial and household sensors that the company believes will deliver $19 trillion of economic benefits over the next decade.

One of the potential benefits Elfrink is particularly fond of is in smart parking for cities, citing how the average Parisian spends four years in their car looking for parking spots and how sensor based systems can eliminate that lost time.

In an Australian context, the Internet of Things and automating processes may be the answer to improving the country’s poor productivity, says Cisco’s Australian and New Zealand Vice President Ken Boal.

“We have changing economies across our two nations,” he says. “We have issues with national competitiveness and it’s very expensive to do business in this part of the world and that’s starting to impact people’s lives and jobs. So we need a vision -- business and government leaders are searching for more productivity. We’ve got to get innovation back on the agenda.”

Productivity and sensors

One area of Australian industry that has seen innovation and massive productivity increases is the mining sector. Mark Sheppard, the head of GE’s Global Mining division, describes how squeezing just 1 per cent in efficiencies is changing industry.

“If you look at our installed base of products across all the sectors, if you could optimise our fleet -- be it aircraft engines, MRIs and everything else -- we could deliver $20 billion in extra profits to our customers,” Sheppard says.

Sheppard echoes the views of GE’s Chief Economist Marco Annunziata, who told Business Spectator last October that after a period of massive government economic stimulus it’s up to the private sector to start growing the global economy through greater productivity.

“Stronger productivity has to come from innovation,” Annunziata said. “If you look at countries like the US, companies have become almost as efficient as they can possibly be with the current technology.”

Jobs of the future

When everything from cars and parking spots to smartphones and jet engines gathering information -- US retail chain Walmart currently collects 2.5 Petabytes of knowledge from its customers every day -- the challenge for businesses is in harnessing all this data.

Geelong’s Deakin University is one organisation that has had to deal with massive data traffic and Craig Warren, the institution’s Infrastructure Services Director, described how one researcher alone generates 30 Terabytes of data of each time they downloaded their maps of Bass Strait’s sea floor.

To deal with these demands, the university used to “buy six pack of servers every month”, but now they’ve been able to harness virtualisation and cloud computing to reduce the number of servers from 350 to 88, with substantial falls in support and capital costs.

For Geelong, the university has been an area of good news in a city that’s been buffeted by the closure of big factories. The Australian Future Fibre Research and Innovation Centre is expected to deliver 500 high-tech jobs in carbon fibre manufacturing, based around successful research spin-offs.

Connecting agriculture

Across Bass Strait, the University of Tasmania is working with the CSIRO to build a statewide network of sensors under its Sense-T project -- an ambitious scheme to wire up the state’s agricultural producers with sensors to improve productivity.

Sense-T’s founding director Ros Harvey described to Business Spectator how the project can help the state: “We can actually use technology to increase productivity and competitiveness while assisting industries and growing the digital exports of the future.”

With export markets increasingly demanding better accountability through the global food supply chain -- particularly China and Europe -- projects like Sense-T are essential for Australia to be ahead of international markets.

Attracting the kids

Another aspect Harvey sees with projects like Sense-T is making science and technology attractive to students and younger workers.

“The thing I really hope for is to inspire people, particularly younger people,” says Harvey. “We know we have a shortage in STEM -- Science, Technology, Engineering and Maths -- and I think we really need to excite people about the possibilities of science and ICT.”

Addressing the STEM skills shortage is a concern shared by Cisco’s Elfink: “We need young people embracing STEM, we need at least a million young professionals just for the IT security industry.”

For businesses, the message for business leaders from last week’s Cisco Live is clear: technologies like cloud computing and the Internet of Things are key factors in lifting productivity and competing in a global marketplace.

“If you don’t look inside of your company in a disruptive way,” Elfrink emphasises, “If you don’t change your processes, then competition will catch you up and knock you out.”

While the leaders of Australia’s business and political communities are concentrating on chiselling away workers’ wages, it may well be that the real solution in improving productivity is investment in the next waves of technology, and giving this generation of students a reason to study ICT and science.

Paul Wallbank travelled to Melbourne as a guest of Cisco Systems