TECHNOLOGY SPECTATOR: Digital mindset for a digital future

The conservatism stifling innovation in Australia is a hindrance that needs to be addressed if we are to take advantage of our strategic position in the Asian Century.

Technology Spectator

Australian business is dominated by a conservative monoculture which is at risk from both Asian competition and the digital economy. This conservatism, which could prove to be fatal (especially as our resource-driven economy starts to run out of steam), and the risks of inaction were highlighted in a recent panel discussion in Sydney.

The Digital Australia and Emergent Asia panel held at PwC’s Sydney office last week was a timely reminder of many of the issues for Australian business that were raised in last weekend's release of the Australia in the Asian Century white paper. The panel discussion hosted by Melbourne University’s Asialink, Sydney consultancy Global Mindset and PwC Sydney looked at many of the issues facing Australian businesses as Asian economies become connected and competitive in the global economy.

The opening shots fired at the panel were aimed at defining a ‘digital economy’ and exploring the potential of Asia. Both were dismissed by an eclectic panel as ‘abstract concepts’, which is not entirely surprising.

With the distinction between an internet business and a non-internet one rapidly fading into the background, finding a textbook definition of ‘digital economy’ is a difficult proposition. As crowdsourcing outfit Freelancer.com chief executive Matt Barrie pointed out at the event, all businesses are becoming internet businesses and the age of software has radically changed business patterns as supply chains, design and manufacturing are digitised. The geographic barriers that shackled businesses in the past are being broken down quickly and irrevocably. Those unprepared for the shift are destined to perish

Speaking of geographies, the idea of Asia being one homogenous entity is a fallacy that is as silly as considering Greece, Switzerland and Norway being the same just because they are part of Europe. The reality is far more complex and characterised by cultural and ethnic differences and a ‘digital divide’ between the cities and rural communities.

The main worry is that Australian businesses are just not prepared for these changes with CSC Australia & Asia chief technology officer Bob Hayward labelling the conservatism and monoculture of Australian boards "that seem to be the same faces all the time,” as two major hindrances.

The prime concern for Hayward is the technological illiteracy of Australia’s business leaders.

"You go to a modern Australian manager and say I want to talk to you about all the technology that underpins your all of your business processes and about technology that’s disrupting your industry dramatically and they say ‘I don’t want to talk about it – talk to my IT people’”.

Be quick or be dead

Another looming risk to big and small businesses is the reliance of the domestic Australian economy on the service sector, which is being disrupted by crowdsourcing platforms like Freelancer.com and 99Designs.

Equally worrying is the pace at which this disruption is remodifying the economic landscape in the favour of more agile, tech-driven outfits.

Australian Services Roundtable chief executive Ian Birks told the audience at the event that local businesses need to move up the value chain, while respected tech commentator and author Brad Howarth warned that large parts of the Australian service sector are totally unprepared for these changes.

"The same factors that drove manufacturers offshore are now happening in services,” Howarth said.

"We’ve got some issues we need to work out. It’s not good enough to be clever, we have to be fast.

Change, adapt and grow

However, the future isn’t entirely bleak for Australian businesses and the aforementioned digital divides within Asian economies may prove to be part of the answer for innovative local enterprises, particularly those in the service sector.

According to Keith Besgrove, the first assistant secretary of the Department of Broadband, Communications and Digital Economy, the capacity of our society to change, adapt and grow could prove to be a vital attribute.

"It’s really easy to sell short the Australian economy, it is a flexible and open economy that has proved its capacity to change, adapt and grow,” Besgrove told those gathered at the event.

Besgrove’s optimism is not entirely misplaced but there is a sorry track record of Australian companies being caught on the hop. The changes to manufacturing in the 1980s caught many of Australia's factories off guard and a similar thing has happened in the 2000s to the country’s leading media and retail empires.

Risking a similar thing happening to the service sector that employs the bulk of Australian workers is a high stakes game. Hopefully both business and political leaders heed the warnings being sounded out.

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