Industry Focus

The Smart Internet Technology CRC is a partnership led by Australian industry, with the participation of research institutions and government. It was formed to address the need for continuous innovation and deliver beneficial outcomes for industry. It targets the finance, media and government sectors, by creating new tools to achieve productivity gains, new market opportunities, and export growth. These tools and methods can also be adapted to suit other industry sectors. Finance and media have been chosen because of their importance and influence over the Australian economy as a whole.


Finance:

Westpac reports that today online services have a relatively low penetration amongst existing customers and contribute a small part of the bank’s business in value. Although e-banking was used by 30% of Westpac’s customer base in 2003, only 8% of transactions were conducted online. However, in 2005, cost savings due to e-banking were conservatively estimated at 60%, while increases in deposits through internet banking totalled $9 billion. These impressive economic benefits imply strong growth potential from greater uptake of existing online services, and the introduction of new services. This extends to strengthening domestic banks’ competitive positioning against overseas entrants such as ING Direct, while enabling them to capitalise on gaps in financial services markets elsewhere in the world. Financial services represents 7% of Australia’s GDP, but contribute only 1% of exports, at a time when the worldwide services market is growing. Also, Australia’s Asian trading partners are seeking to increase their services sector activity from low percentages of within their industrial base (China 40% vs 70% for mature economies). Financial sector revenues in the Asia-Pacific region alone are projected to grow from US$390 billion in 2004 to US$1.8 trillion by 2020.


Media:

PricewaterhouseCoopers estimates that the $20 billion Australian media industry will grow by 40% from 2005 to 2009, while the world market for digital media services grows from $15.5 billion to $100 billion over the same period. Local computer games exports totalled $100 million in 2005 and are projected to grow to $1 billion by 2010 - still a small slice of the $38 billion global market. Domestic online advertising grew from 9% of advertising spending in 2002 to 15% in 2005. The importance of the media sector has been recognised by DCITA in its strong support for digital content.

Government:

Governments in Australia are rapidly adopting online services to increase productivity and deliver improved services. The states are competing to attract larger industry clusters. Health is an $80 billion industry with $2 billion exports (including $400 million services). Education is a $40 billion industry with $5 million in exports.