Fifty five percent of Australian companies are now part of the country’s $28 billion a year Internet Economy, according to a major new report launched today by Cisco Systems.
The study, from The Allen Consulting Group was commissioned by Cisco Systems to address the question, ‘How large is the Internet Economy in Australia?’ The study was designed in consultation with leading business and government representatives.
Cisco Australia & New Zealand Managing Director, Terry Walsh, said the report showed Australian industry was readily adopting Internet solutions to improve its competitive position.
‘Australia’s place at the leading edge of the Internet economy has been re-affirmed by this report, which shows the extent and breadth of the Internet’s role in the overall economy,’ Said Senator Richard Alston who launched the report with Cisco. ‘At a range of levels, the Howard Government is playing a key investment and facilitating role in the advantages the Internet offers Australian business and consumers.’
‘The Internet Economy’ comprises a group of companies that have adopted the Internet for their business operations, or provide goods and services that support the Internet in Australia. The Internet Economy was divided into four layers for the purpose of the study.
The report found that Internet-related spending at these businesses reached $28 billion during 2000-01, or 4.3 per cent of Australia’s gross domestic product (GDP).
This compares to an estimate of US$524 billion in the United States’ Internet Economy during 1999, or 5.6 per cent of GDP, as reported in a Cisco commissioned study by the University of Texas.
The Allen Consulting Group study forecasts that Internet Economy revenue in Australia will increase in real terms to $49 billion per annum by 2003-04, or 6.7 per cent of GDP.
The study showed that participation in the Internet economy is widespread throughout all major industries and has penetrated all major geographic areas of the country. The communications industry is the leading participant in the Internet Economy. Agriculture and mining have a 40 per cent participation level.
Firms surveyed said that the most significant benefits to business from using the Internet included incremental productivity and process improvements. Internet Economy firms were 50 per cent more productive per worker than non-Internet Economy firms.
One fifth of small businesses estimated that their overall revenue would increase by 20 per cent in the next three years as a result of using the Internet.
Sixty two per cent of firms surveyed estimated that the Internet provides them with cost savings. A tenth of those said that the savings were 15 per cent or greater.