A measure of our success

Could it be possible that the Australian ICT sector is actually twice as large as previously believed? That’s the question that some industry players are asking after reviewing the results of a comprehensive study of the ICT sector in Western Australia.

The study, entitled ‘Enabling Growth: The Contribution of ICT to the Western Australian Economy’, was conducted by the Western Australian Information and Communications Technology Industry Development Forum in partnership with the Department of Education and Training.

Under the leadership of Mal Bryce, a former Deputy Premier who served as WA IT Minister in the 1980s, the forum took an innovative approach to sizing up the ICT sector. Instead of blindly accepting the industry definition and assessment of the Australian Bureau of Statistics (ABS), the forum appointed reputable consulting firm, Allen Consulting, to conduct its own assessment.

When measuring the size and contribution of the ICT sector, the ABS evaluates ICT firms as those which gain more than 50 percent of their revenue from ICT. However, this leaves the way open to miss the productive output of the many ICT-qualified individuals employed in other vertical sectors.

For example, many of our large banks employ hundreds, if not thousands of ICT professionals, and are considered by many to be little more than big computers with lots of branches. However, because they are categorised as being in the finance sector, the contribution of their ICT professionals is usually overlooked by the bean-counters.

By retaining the services of an independent consulting firm to measure the actual number of individual ICT professionals employed at various organisations across a range of industry sectors, the forum sought to measure the wider contribution ICT makes to the WA economy.

The result exceeded everyone’s expectations. While the traditional ABS definition sized the WA ICT sector at $2.9 billion, accounting for 3.3 percent of the state’s gross output, the data gathered by Allen Consulting put the ICT sector’s revenues at more than $6.6 billion.

While the ICT sector directly employs 23,000 individuals, it is indirectly responsible for between 107,000 and 161,000 additional jobs, which represents between 10 and 17 percent of the state’s workforce.

But the real kicker comes when one considers the value of ICT use, with multiplier analysis revealing that the total value of ICT use across Western Australia lies between $10.1 and $17.6 billion.

“Finally we have a more realistic measure of the size and scope of the ICT sector,” said a delighted Mr Bryce, who said he has been personally pursuing this kind of study for more than 10 years. “If we are not able to measure and define the contribution of the ICT industry to the economy, then we cannot hope to influence public policy.”

Certainly, the results of the study have opened doors in Perth, where the WA Government was as surprised as everyone else by the extent of the results. ICT industry players in WA say they are now being listened to by people in government and have greater access to key decision-makers.

That’s good news for an industry that has long been under-valued and under-appreciated.

While we have always known that ICT has made an extraordinary impact on other industries like mining, health, finance and agriculture, the actual extent of ICT’s contribution in WA has never before been clearly measured.

The implications for ICT’s impact and influence across the rest of Australia cannot be overstated. According to the ABS, in 2003 Australia had nearly 24,000 ICT specialist firms that between them achieved almost $80 billion in revenues.

If the example in Western Australia provides any accurate measure at all, then one could expect to more than double that figure to take into account the broader contribution of ICT professionals across the entire spectrum of industry sectors.

Clearly, far more detailed investigation is needed to develop an accurate assessment of the national situation, but it’s intriguing to postulate.

“I do not claim special status for Western Australia when it comes to the value of the contribution made by ICT professionals,” said Mr Bryce. “We need to undertake research of this kind on a national basis.”

With the broadband issue already gaining national attention in pre-election power plays by both the Liberal and Labor parties, it seems likely that this will be the first poll in which ICT-related issues play a significant role.

Wishful thinking might also suggest that the importance of ICT to Australia’s economic prosperity and growth is finally being recognised. But let’s not get too excited.