The internet contributed AU$50 billion ($52 billion), or approximately 3.6% of Australia's Gross Domestic Product in 2010. This provided huge benefits to the public sector, especially for education, healthcare and disaster response, according to a new report released recently by Deloitte Access Economics.
Commissioned by Google Australia, the report "The Connected Continent: How the Internet is Transforming Australia's Economy," is the first to measure effects the Internet had on the Australian economy and follows a similar report on Hong Kong released last May, as well as other reports across Europe.
According to the report, household consumption, which comprises goods and services bought by households over the Internet, formed largest component of the Australian Internet economy, representing 2.6% of GDP and roughly 70% of total expenditure. Spending by government on ICT represented a further 0.9% of GDP.
Some spending by households, businesses and governments was on goods and services produced overseas, while foreigners likewise bought some goods and services produced in Australia. "Overall, reflective of the broader economy, Australia is a net importer of e-commerce and ICT equipment, which together subtract around 1.1 percentage points from GDP," the report added.
Job creation wise, 190,000 jobs in Australia were found to be directly linked to the Internet, including IT software firms, internet service providers, and companies providing e-commerce and online advertising services. These jobs generated AU$22 billion towards the local economy.
Other wider benefits cited in the report but fully captured in GDP calculations include: approximately $27 billion in productivity increases to businesses and government in the form of improvements to operation and service delivery, the equivalent of $53 billion in benefits to households in the form of added convenience and access to an increased variety of goods and services and information.
Deloitte Access Economics said it used the expenditure method in the study, which measured the amount spent by consumers, businesses, government and overseas residents on internet related goods and services produced in Australia. This method has been used by Boston Consulting Group and McKinsey to measure the size of the Internet in other countries.
The optimistic forecast is for the Internet's contribution to the Australian economy to grow to around 7 % per year to reach AU$70 billion by 2016.
Public sector benefits
According to the report, the effective use of the Internet to deliver government services increases customer satisfaction, reduces costs and promotes innovation.
The Australian government has released a National Digital Economy Strategy in May, which envisions the country to become one of the world's leading digital economies by 2020, with 4 out of 5 Australians choosing to engage with the government online.
One of the case studies cited in the report was the use of cloud computing for cost reduction and implementing innovation. It was reported that the Department of Education and Training in New South Wales had already utilized this technology to provide email services for students, and realized a 66% cost reduction.
Aside from education, healthcare was also seen as a key beneficiary of ICT-enabled services, especially in the area of closing the gap between rural and urban healthcare.
A partnership between the University of New England and the University of California's Irvine School of Medicine (UCI) will connect general practices in rural and regional communities with world class medical teaching institutions via fast broadband connections.
"The implementation of fast broadband across Australia means that these institutions will be able to share more life-saving information and techniques quickly and efficiently. The project represents a more efficient and cost-effective way to train doctors, nurses and allied health professionals for rural and regional communities," the report mentioned.
Lastly, the Internet was cited for providing emergency services and aid in disaster response. In 2011, the Queensland Police used Facebook and Twitter to communicate urgent information to the public in the aftermath of floods and Cyclone Vasi.
"After the adoption of the online strategy, QPS estimated that about 70 % of its public relations efforts during the crises were proactive. With Facebook and Twitter, it was able to develop a direct connection with the general public. The agency's Facebook page became the de facto one-stop-shop for all of Australia and for journalists across a range of media around the world," the report said.
For this effort, Queensland Police Director of Media and Public Affairs Kym Charlton reportedly won the Gov 2.0 Innovator Award for leadership and innovative use of social media.