Digital You! Engaging with the Digital Economy in the South West

Digital You! Engaging with the Digital Economy in the South West South West Digital Economy Strategy Regional Development Australia South West South West Development Commission Final January, 2014

Document Control Job ID: 16826 BNE Job Name: RDA South West Digital Economy Strategy Client: RDA South West Client Contact: Charles Jenkinson Project Manager: Michael Campbell Email: Michael.campbell@aecgroupltd.com Telephone: 08-6555 4940 Document Name: AECgroup - South West Digital Economy Strategy - Final Last Saved: 6/1/2014 2:56 PM Version Date Reviewed Approved Draft Report 29 August, 2013 MC ARP Draft Report v2 3 October, 2013 MC Draft Report v3 4 October, 2013 MC Final 6 January, 2014 MC ARP Disclaimer: Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Limited does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance on this information, whether or not there has been any error, omission or negligence on the part of AEC Group Limited or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a particular set of results will in fact be achieved. i

Executive Summary Background The Digital Economy is already here and we need to figure out a way to use it better. - Workshop participant in Bunbury Digital technology has spawned numerous facets of our current society. Almost all aspects of daily life are now impacted by and use digital technology, whether we realise it or not. The way we work, learn, shop and engage with each other often includes digital technology. This revolution is taking place at a rapid pace and will continue to pervade more and more aspects of our life. At the same time, the technology is useless without human intervention. It is the human element that allows the technology to be adopted and used in innovative and creative ways ones that benefit society. The roll out of high speed broadband technology is underway. Bunbury already has fibre optic services and construction of high speed broadband infrastructure in most other major centres in the region is already underway or will commence within three years. The region needs to embrace technology and ensure it is adopted to realise the broad ranging potential community and economic benefits. Fear, Uncertainty and Doubt The unknown or misunderstood always causes anxiety in people. This is a natural occurrence. Across the South West region, households and businesses (across every industry) do not yet understand or appropriately appreciate what high speed, broadband infrastructure can provide. This lack of knowledge is likely the most significant barrier to unlocking the potential of digital technologies and the infrastructure that will soon be available across the region. Naturally, it is simply not the presence or availability of infrastructure that will deliver outcomes but the grit and grind of human use and application of this technology and infrastructure that will provide numerous community and economic benefits. If people don t use the thing [high speed, broadband], then we won t get anything. - Workshop participant in Bunbury What Can the Digital Economy Do for Us? There are a variety of stakeholder groups that can benefit from the digital economy, including: Households Businesses (in every industry sector) and not-for-profit organisations Health and aged care Education Government There have been a wide variety of studies done to identify the specific community and economic benefits of high speed broadband infrastructure. All of these studies come to the same conclusion: high speed broadband can deliver significant benefits. In its most basic form, high speed broadband can help businesses to grow in the South West, can help local residents access better services for education and health, can help all residents and businesses conduct their daily life in a more productive and effecient manner. ii

The Digital Vision for the South West The Vision for the South West Digital Strategy is: By 2020, the South West region will be among the world s leading digital economies... The Digital Goals of the South West The digital economy is essential to the region s productivity, global competitiveness and improved social wellbeing. To ensure that these benefits are properly realised, it is important to ensure every household and business understands how to engage appropriately with the digital economy. High speed broadband internet connectivity will provide the infrastructure to do so. It will offer greater stability and reliability of broadband services to support a growing number of critical applications, such as education, health services and other day to day functions. The following eight goals highlight how the Vision for the digital economy in the South West will be achieved and what outcomes are possible for the local region. These goals are predicated on the completion of the rollout of high speed Internet across the South West by the end of 2015. Goal 1: Online participation by households: By 2020, 88% of households in the South West have broadband connections by 2020. Currently, 69% of households have a broadband connection. Goal 2: Online engagement by businesses: By 2020, 97% of businesses and not for profit organisations in the South West are taking advantage of online opportunities to achieve productivity improvements, expand their customer base and enable jobs growth. Using national averages, 92% of all businesses in the South West have internet access but only 45% have a web presence. Goal 3: Smart management of energy usage, the environment and infrastructure: By 2020, the majority of households, businesses and other organisations in the South West will have access to smart technology to manage energy usage. Goal 4: Improved health and aged care: By 2020, every person seeking medical advice in the South West will have access to required specialist health services via the Internet. Goal 5: Expanded online education: By 2020, every school, TAFE, university and higher education institution in the South West will have: o o The appropriate connectivity to develop and collaborate on innovative and flexible educational services and resources to extend online learning resources to the home and workplace. The facilities to offer students and learners who cannot access courses via traditional means, the opportunity for online virtual learning. Goal 6: Teleworking: By 2020, all employees in the South West will have access to teleworking facilities, where appropriate and feasible. Goal 7: Digital service delivery of government and non-government services: By 2020, 80% of people in the South West will engage with government through the Internet or other type of online service. Goal 8: Reducing regional disadvantage: By 2020, the gap between households and businesses in the South West and the Perth Metropolitan Area will have narrowed significantly. iii

The Digital Economy Strategy for the South West The achievement of the aforementioned goals and the in the pursuit of the Digital Vision for the South West will require a concerted effort by all levels of government, industry and the community as a whole in the South West to address key constraints and encourage greater use of digital technologies. The South West Digital Economy Strategy proposes five strategic initiatives aimed at driving growth of the digital economy in the South West: Strategic Initiative 1: Develop the institutional framework to coordinate and deliver the digital strategy. Strategic Initiative 2: Enhance the use of the digital technologies by all levels of government in the South West Region. Strategic Initiative 3: Further develop the digital capacity of businesses, organisations and households in the South West Region. Strategic Initiative 4: Enhance digital infrastructure across the South West. Strategic Initiative 5: Foster greater awareness of the strengths, weaknesses, opportunities and threats in the digital economy. iv

Table of Contents DOCUMENT CONTROL... I EXECUTIVE SUMMARY... II TABLE OF CONTENTS... V 1. INTRODUCTION... 1 1.1 BACKGROUND... 1 1.2 STUDY FOCUS AREA... 1 1.3 PURPOSE... 2 2. THE DIGITAL AGE AND THE SOUTH WEST... 3 2.1 WHAT IS THE DIGITAL ECONOMY?... 3 2.2 SPEED, SPEED, SPEED... 3 2.3 THE NATIONAL BROADBAND NETWORK... 5 2.4 WHAT CAN THE DIGITAL ECONOMY DO FOR US?... 6 2.4.1 ECONOMIC IMPACTS... 6 2.4.2 SOCIAL IMPACTS... 6 2.5 WHERE IS THE SOUTH WEST NOW... 7 2.6 FEAR OF THE DIGITAL ECONOMY... 9 2.6.1 FEAR, UNCERTAINTY AND DOUBT... 9 2.6.2 ACCESS TO TECHNOLOGY... 10 2.6.3 ONLINE RETAILING... 10 2.6.4 BUSINESS ACTIVITIES... 11 3. DIGITAL STRATEGY FOR THE SOUTH WEST... 12 3.1 THE DIGITAL VISION... 12 3.2 STRATEGIC GOALS... 12 3.3 STRATEGIC INITIATIVES... 13 3.4 DIGITAL STRATEGY... 13 4. TRACKING OUR PROGRESS... 17 REFERENCES... 19 v

1. Introduction 1.1 Background The National Broadband Network (NBN) is a large-scale infrastructure development delivering fast-speed broadband connectivity to businesses and households across Australia. Construction of the NBN is currently underway and is expected to be completed by 2021. For regional areas, such as the South West Region of Western Australia (the South West), the NBN is anticipated to have significant impacts and benefits. It is essential the South West is appropriately prepared and able to leverage this infrastructure to its maximum advantage. RDA South West and the South West Development Commission (SWDC) have engaged AECgroup to develop a Digital Economy Strategy, which will assist them in planning for the delivery of the high speed Internet. 1.2 Study Focus Area For the purposes of this document, the South West is as shown in the shaded area in Figure 1.1. Figure 1.1. Major Towns of South West Region of Western Australia, by Local Government Area N Harvey Harvey Dunsborough Capel Busselton Busselton Binningup Australind Bunbury Dalyellup Capel Eaton Dardanup Balingup Brunswick Dardanup Donnybrook Collie Donnybrook -Balingup Collie Greenbushes Boyup Brook Margaret River Augusta Margaret River Nannup Nannup Bridgetown Bridgetown- Greenbushes Manjimup Boyup Brook Augusta Pemberton Manjimup Northcliffe Walpole Source: AECgroup 1

1.3 Purpose This report provides background information, as well as a 10-year vision and strategy for the South West digital economy that will allow the region to exploit the unique opportunity provided by high speed internet, namely: Stimulating the regional and local economies by greater use broadband and other digital technologies, for example through assisting retailers to make better use of digital technology to increase sales. Refining government and business processes, for example by helping to encourage local governments to provide more services online. Opening new markets for existing businesses, for example by encouraging agribusinesses to market and sell products directly online. Attracting new ventures to the South West, for example by the recruitment of creative industries through the amenity of the region and access to high speed broadband infrastructure. Stronger interaction between government, industry and households, for example through encouraging on-going interaction and discussion regarding higher usage of digital technologies. This strategy is aimed at achieving the eight digital economy goals identified in the National Digital Economy Strategy (DBCDE, 2012a). These are: Online participation by households Online engagement by businesses and not-for-profit organisations Smart management of our environment and infrastructure Improved health and aged care Expanded online education Increased teleworking Improved online government service delivery and engagement Greater digital engagement in regional Australia. 2

2. The Digital Age and the South West 2.1 What is the Digital Economy? The Australian Government (DBCDE, 2012) has defined the digital economy as: The global network of economic and social activities that are enabled by information and communications technologies, such as the Internet, mobile and sensor networks. The digital economy is growing in size and importance for Australia. A recent study (Deloitte Access Economics, 2011) found the Internet directly contributed approximately $50 billion (or 3.6%) to Australia's Gross Domestic Product (GDP) in 2010. This contribution is of similar value to the retail sector or Australia s iron ore exports. The digital economy is big and already contributes greatly to the Australian economy, but it is not a standalone sector, it is embedded in all sectors. The opportunity to take advantage of this emerging technology is now. In addition to the direct economic impact, the Internet already contributes wider economic benefits to Australia, including: $27 billion in productivity increases to business and government $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, 2011). This is evidence of the growing importance of the digital economy as a driver and shaper of the national economy. What do you mean by a digital economy? The economy is digital, it is the economy. - Workshop participant in Bunbury 2.2 Speed, Speed, Speed The evolution of digital technologies has increased significantly in recent years. As highlighted in Figure 2.1, technology is advancing at an ever increasing rate. It required 185 years for the invention of electricity to evolve to powered flight. The internet was invented in 1974 and it took just 30 years to invent smart phones, tablets and Facebook. In 2011, one third of the world s population was using the Internet (ITU, 2011). The rate at which we are adapting and the technology is changing is ever increasing. Figure 2.1. Advancement of Technology, Electricity and Internet Protocol Electricity Electricity is invented Light Bulb Telegraph Powered Flight Internet Protocol Source: ITU (2011) Internet Protocol is invented Facebook Tablets Smart Phones Google As illustrated in Figure 2.2 the take-up rates of new technologies has shortened considerably (population growth has played a role). The Internet and inventions that take advantage of the Internet have recorded very fast rates of adoption. This has been accompanied by significant increases in international Internet bandwidth in recent years from 11 Gbps in 2006 to 80 Gbps in 2011 (ITU, 2011). 3

Figure 2.2. Technological Adoption, Years Required to Reach 50 Million Customers/Users Source: Pollen Strategy (2006) Deloitte Access Economics created an index measuring access, use and expenditure on line. According to this index, Internet activity has doubled over the last four years (Deloitte Access Economics, 2011), with the use of the Internet infiltrating numerous facets of Australian lives, for example: More than 40% of Australians research their purchases online (Nielsen, 2012) Over a third of Australians watch video content online each month (ACMA, 2011a) Social networks now form over 20% of all Australians internet time (Sensis, 2011) Almost 20% of online shoppers mostly buy from overseas websites (ACMA, 2011b). Businesses are similarly connected with: Many large organisations using Linkedin for recruitment purposes (Deloitte, 2012) 60% of SMEs have a web presence (Deloitte, 2011) MySpace Skype Internet ipods DVD players ebay Digital Cameras Video Cassette Recorders Sony Walkmans Televisions Personal Computers Radio Telephone Electricity 0 10 20 30 40 50 60 Years 27% of SMEs use social media (ACMA, 2011b). The growing number of Internet users provides the catalyst for further innovation in the way the Internet is used and provides access to even more markets and information (Deloitte Access Economics, 2011). The speed at which digital technologies is changing as well as the speed of the society s ability to take up the technology seems to be increasing at an ever increasing pace. The pace at which the digital economy is changing and the ever increasing impact it is having on the South West region will continue to shape the future. The way we shop, learn, play, work and interact will continue to evolve. 4

2.3 The National Broadband Network The Commonwealth Government is funding the roll out of the National Broadband Network (NBN) enabling infrastructure to deliver fast speed broadband to all Australians. According to NBN Co. (2010) the plan will deliver: Improved download speed Support for high speed download and upload services Wireless and satellite coverage Uniform national wholesale pricing. Fibre services are currently available in Bunbury. Most other major centres are either under construction or expect construction to commence within three years. The planned roll out and timing across the South West is illustrated in Figure 2.3. Figure 2.3. NBN Rollout Source: NBN Co. (2012) 5

2.4 What Can the Digital Economy Do for Us? While the digital economy and the Internet are not the be all to end all, they have rapidly entered our mainstream culture and society. Digital technologies have quickly become a way of daily life for many people. Applying for a job, checking the bank balance, seeing what time a movie is playing, getting directions or exploring any curiosity about anything in the world ( Oh, I will Google it ) can be done online through digital technologies. However, digital technologies simply represent tools or pieces of equipment, just like a hammer, microwave, car, etc. They are something to be used to deliver a good or service from which a benefit can be derived. On their own, digital technologies will not do anything, it is only through the human elements that we derive value from the technology. 2.4.1 Economic impacts Digital technologies and high speed Internet can deliver economic impacts across a range of stakeholders. These impacts include: Productivity gains: high speed Internet allows businesses and residents to do things more efficiently as highlighted by a number of studies (Productivity Commission, 2004; Centre for International Economics, 2008; Havyatt et al. 2010). Key sectors that will be influenced the most through productivity gains include: o o o o Agriculture Communications Business and finance Manufacturing Increased economic growth: high speed Internet will help the economy grow and will become more and more a part of how business and consumers spend money. The direct contribution of the Internet to the Australian economy is estimated to increase by $20 billion to $70 billion over the next five years (Deloitte Access Economics, 2011). For the South West region, high speed Internet can increase, directly and indirectly, the economy by $4.3 billion and 13,000 jobs (AECgroup, 2011). Boost in trade: online retail will continue to grow, which can allow local retailers access to larger markets as well as provide new ways for retail traders to engage with their customers. Naturally, online retail also provides an avenue for outside competition as well. 2.4.2 Social Impacts In the South West, 78% of households have Internet access (2010-11). This is marginally below the level of connectivity for the State as a whole, but is in line with the nation. Approximately 77% of households with home Internet access use the Internet daily and a further 20% use it at least weekly (ABS, 2011c). The most common activities undertaken on the Internet by persons aged over 15 include: Emailing (91%) Research, news and general browsing (87%) Paying bills online or online banking (64%) Social networking and online gaming (55%) Listening to music or watching videos or movies online (53%) (ABS, 2011b). The social impacts of the Internet and digital economy are significant, especially the socialconnectivity aspects. Online education, access to online health and medical resources and the ability to work from home (telework) can provide important lifestyle opportunities for households, thereby improving quality of life. Access to E-commerce (online shopping) offers significant benefits to households, particularly in regional areas, including: Reduced cost of comparing prices (reduced travel costs and/ or telephone charges) 6

Percent of Households South West Digital Economy Strategy Increased choice (particularly for regional areas, which may have less diversity in the local retail offering) Cost efficiencies from increased competition (Access Economics, 2010). Social media are changing the way people communicate with friends and family, as well as providing a new framework for businesses to engage with customers. Digital technologies are also influencing product choices and career opportunities (e.g. Linkedin). It also provides businesses with key information on customers for further marketing, branding initiatives and/or product development, allowing retail businesses (for example) to have a more intimate and personal relationship with customers. 2.5 Where is the South West Now In 2010-11, 78% of local households in the South West had an Internet connection (ABS, 2012b) (Figure 2.4). The vast majority of these households (88%) had broadband, which equates to 69% of local households having a broadband connection. Whilst the South West has lower levels of household Internet connectivity than Western Australia or Australia, its level of connectivity is above the average of all non-capital city areas elsewhere in Australia. The South West s rate of household connectivity is also faster than other areas. Figure 2.4. Proportion of Households with an Internet Connection 100% Australia Western Australia Non-Capital City Areas (National) South West 75% 50% 25% 0% 2005-06 2006-07 2007-08 2008-09 2010-11 Source: ABS (2011a, 2012b), AECgroup Analysis of local business and national data regarding business use of the Internet highlights Australian businesses across all sizes have the potential to generate significant proportions of their income through the Internet. Using national averages, 92% of all businesses have internet access but only 45% have a web presence (ABS 2013). Table 2.1 shows the proportion of businesses (by size and by industry) that generate more than 50% of their income from the Internet in the South West and Australia as a whole. Businesses in the Agriculture, Forestry and Fishing, Construction and Rental, Hiring and Real Estate Services industries (shaded in blue) in particular, have the ability to derive a significant proportion of their income through the Internet. 7

Table 2.1: Comparison Between Local Business Counts, 2011, and National Incomes Earned through the Internet, 2009-10 Industry Employment Size Proportion of South West Businesses Receiving more than 50% of their Income through the Internet Proportion of Australian Businesses Receiving more than 50% of their Income through the Internet (a) Non employing 61.1% 23.3% 1-4 21.1% 21.4% 5-19 12.6% 18.1% 20-199 5.1% 8.7% 200+ 0.1% 23.3% Industry Agriculture, forestry & fishing 20.0% 11.7% Mining 0.3% 28.5% Manufacturing 4.8% 26.2% Electricity, gas, water & waste services 0.4% 16.0% Construction 21.8% 25.4% Wholesale trade 2.2% 25.3% Retail trade 7.5% 14.9% Accommodation & food services 4.4% 18.1% Transport, postal & warehousing 3.5% 29.5% Information media & telecommunications 0.4% 29.3% Financial & insurance services 4.9% 11.3% Rental, hiring & real estate services 9.2% 19.3% Professional, scientific & technical services 7.4% 29.4% Administrative & support services 3.0% 22.0% Public administration & safety 0.1% n.a Education & training 1.1% n.a Health care & social assistance 3.6% 0.0% Arts & recreation services 0.9% 15.0% Other services 4.4% 16.3% Total 15,199 21.9% Note: a) Percentages presented in the far right column are for Australia. Source: ABS (2011b, 2012c) Table 2.2 provides a comparison of the proportion of businesses in the South West (by industry) and Australia more broadly, which receive orders over the Internet. Table 2.2. Comparison Between Local Business Counts, 2011, and National Orders Received through the Internet, 2009-10 Type of Business Proportion of Businesses in SW Receiving Orders over the Internet Proportion of Australian Businesses Receiving Orders over the Internet Agriculture, forestry & fishing 20.0% 10.7% Mining 0.3% 12.6% Manufacturing 4.8% 40.8% Electricity, gas, water & waste services 0.4% 23.0% Construction 21.8% 21.8% Wholesale trade 2.2% 48.8% Retail trade 7.5% 33.8% Accommodation & food services 4.4% 22.6% Transport, postal & warehousing 3.5% 14.4% Information media & telecommunications 0.4% 37.0% 8

Type of Business Proportion of Businesses in SW Receiving Orders over the Internet Proportion of Australian Businesses Receiving Orders over the Internet Financial & insurance services 4.9% 18.6% Rental, hiring & real estate services 9.2% 23.3% Professional, scientific & technical services 7.4% 27.0% Administrative & support services 3.0% 22.9% Public administration & safety 0.1% n.a Education & training 1.1% n.a Health care & social assistance 3.6% 6.9% Arts & recreation services 0.9% 35.9% Other services 4.4% 23.8% Total 15,199 24.8% Source: ABS (2011b, 2012c) Industries shaded in blue in Table 2.2 are the three main employers in the South West. Businesses in these industries have significant capacity to increase their business activity through greater use of the Internet. Industries highlighted in red in Table 2.2 receive a significant proportion of their orders over the Internet, Australia-wide. The proportions for the corresponding industries in the South West are much lower by comparison. This suggests that there is potential for businesses in these industries and others in the South West to benefit from greater Internet use, especially once high speed Internet is in place. Given the lower levels of bandwidth and the challenges of Internet access in the South West at present, the rate of uptake of the Internet by businesses is likely to be lower than across the nation. While the South West is currently not excluded from the digital economy (and quite contrary, it is very active in the digital economy), there are considerable benefits to the region in the future as high speed broadband is rolled out throughout the region (in a variety of ways). As the technology is rolled out throughout the region, there are ample opportunities for local residents, businesses, educational institutions, health care providers, local governments and other organisations to take advantage of the opportunities to increase productivity and increased levels service. 2.6 Fear of the Digital Economy It s about fear, uncertainty and doubt - Workshop participant in Bunbury We need to overcome the fear and mystery of the internet - Workshop participant in Margret River Despite the significant economic benefits the digital economy could bring to the South West, there are some important barriers, which may prevent the region from benefitting fully. Addressing these barriers early will assist in ensuring the South West realises the potential opportunities the digital economy presents. The following are prominent examples of existing barriers across households and businesses, identified through consultation with local stakeholders. 2.6.1 Fear, Uncertainty and Doubt Fear and a misunderstanding of digital technologies is likely the greatest impediment against the region realising its potential economic and social benefits from high speed broadband connections. During consultation, it was clear across all stakeholder groups (i.e. industry, small business, education, health, etc.) that greater awareness and education regarding the 9

digital economy, digital technologies and the benefits of it is required across the region, from Bunbury to all of the regional centres. Participants regularly referred to the lack of knowledge, understanding and appreciation of digital technologies. At the same time, there are numerous case studies of local businesses utilising digital technologies to benefit their businesses and in fact as a basis for their business. Did you know? Boddington Gold has implemented digital technologies in an effort to provide better service to the community and generate greater profits. Drivers are able to activate the cameras to record other vehicles being driven in an unsafe manner at any time. Additionally, in a world s first, Boddington Gold has provided Smart Caps that include a sensor that is able to read fatigue levels in the brains of the wearers (Newmont 2013). The technology was created by the CRC Mining Australia. Did you know? The Vue Group is a cutting edge multi-media company that opened its studio in Bunbury in 2009 and currently work on a range of documentary, film, TV and animation projects in Australia and around the world. Vue Group and its international partners have offices in Sydney, Melbourne, Singapore, Kuala Lumpur and Manchester (UK). Their current Bunbury studio location was attractive to them through the access to the Telstra internet exchange that is 500 metres from their facility. The Vue Group is a significant user of the internet and transfers large media files over the internet to work with partners around the world. Improvements in the internet network and the implementation of the NBN in the South West would provide significant opportunities for the company to expand. 2.6.2 Access to Technology Access to infrastructure is essential to the use of the Internet. Consultation with stakeholders in the region identified bandwidth, cost of access and speed as key issues that need to be overcome in order for the area to fully utilise the Internet. This is consistent with findings in regional areas across Australia. The cost of servicing these areas tends to be higher due to a lack of critical mass and the dispersed nature of the region. It is expected that a national high speed internet network will address some of the access cost issues for regional areas (through a uniform national wholesale price), whilst also providing more reliable and faster access. High speed Internet is anticipated to have higher benefits for regional economies than metropolitan ones. Economic modelling suggests a 10% increase in connectivity in regional areas would increase their economic output by 0.53% compared to 0.38% in metropolitan areas (DBCDE, 2012a). 2.6.3 Online Retailing Almost a third of persons aged over 15 years who use the Internet did not purchase a good or service online in 2010-11 (ABS, 2011a). According to data from the ABS (2011a) there were several reasons behind their decision not to purchase anything online. Most prominently, some users believed they had no need, but other reasons such as security and uncertainty of purchasing a product without being able to touch it also featured (Figure 2.5). 10

Figure 2.5. Reasons for Not Purchasing Goods or Services Online, 2010-11 Have no need Prefer to shop in person / like to see the product Security concerns / concerned about providing credit card details online Does not have a credit card Does not know how Could not afford it Someone else does it for them Australians Western Australians Trust concerns / concerned about receiving or returning goods Privacy concerns / concerned about providing personal details online Source: ABS (2011) Around 17% of Western Australians and 16% of Australians had security concerns about providing their credit card details online. Lack of a credit card and lack of knowledge of how to purchase goods online were also cited as reasons for not participating in online retailing. Confidentiality and privacy concerns and hardware/ software availability are also barriers to adoption of online retailing. Small to medium sized businesses are less likely to have a website with the capability of receiving orders through online order forms and shopping carts - with most of their online orders coming via email (ABS, 2011b). 2.6.4 Business Activities Other 0% 10% 20% 30% 40% 50% Percent of Persons Though businesses are likely to benefit significantly from greater use of the Internet, especially following the rollout of high speed Internet, many have concerns about the adoption of digital technologies. For example, studies into the concerns of business with high speed Internet have suggested time constraints, information gaps, perceptions of high start-up costs, lack of knowledge on the benefits of Internet trading, technical issues and preferences for traditional business practices were the main barriers for businesses (Allen Consulting Group, 2010; Access Economics, 2010). Businesses in regional areas have also noted that a lack of bandwidth impacted on their use of the Internet for business purposes. Others have expressed concerns about the level of training that might be involved in adopting digital technologies. Overcoming these concerns will help all businesses to access the benefits of digital technology and increase the use of teleworking across numerous industries. 11

3. Digital Strategy for the South West Increased levels of digital engagement can boost productivity. It can overcome distances and improve service delivery for those in regional and rural areas. It can improve educational and health outcomes, allow for better management of the ageing population, promote social inclusion and facilitate more environmentally sustainable management. To ensure these benefits are properly realised, it is important to ensure that every household and business understands how to engage appropriately with the digital economy. High speed broadband internet connectivity will provide the infrastructure to do so. It will offer greater stability and reliability of broadband services to support a growing number of critical applications, such as education, health services and other day to day functions. 3.1 The Digital Vision The digital economy is essential to the region s productivity, global competitiveness and improved social wellbeing. The Vision for the South West Digital Strategy is: By 2020, the South West region will be among the world s leading digital economies... 3.2 Strategic Goals The following eight goals adapted from the National Digital Economy Strategy will serve to evaluate progress towards the successful implementation of the Strategy and the fulfilment of the Vision for the digital economy in the South West. These goals are predicated on the completion of the rollout of high speed Internet across the South West by the end of 2015. Goal 1: Online participation by households: By 2020, 88% of households in the South West have broadband connections by 2020. Currently, 69% of households have a broadband connection. Goal 2: Online engagement by businesses: By 2020, 97% of businesses and not for profit organisations in the South West are taking advantage of online opportunities to achieve productivity improvements, expand their customer base and enable jobs growth. Using national averages, 92% of all businesses in the South West have internet access but only 45% have a web presence. Goal 3: Smart management of energy usage, the environment and infrastructure: By 2020, the majority of households, businesses and other organisations in the South West will have access to smart technology to manage energy usage. Goal 4: Improved health and aged care: By 2020, every person seeking medical advice in the South West will have access to required specialist health services via the Internet. Goal 5: Expanded online education: By 2020, every school, TAFE, university and higher education institution in the South West will have: o o The appropriate connectivity to develop and collaborate on innovative and flexible educational services and resources to extend online learning resources to the home and workplace. The facilities to offer students and learners who cannot access courses via traditional means, the opportunity for online virtual learning. Goal 6: Teleworking: By 2020, all employees in the South West will have access to teleworking facilities, where appropriate and feasible. Goal 7: Digital service delivery of government and non-government services: By 2020, 80% of people in the South West will engage with government through the Internet or other type of online service. 12

Goal 8: Reducing regional disadvantage: By 2020, the gap between households and businesses in the South West and the Perth Metropolitan Area will have narrowed significantly. 3.3 Strategic Initiatives The achievement of the Digital Vision for the South West will require a concerted effort by all levels of government, industry and the community as a whole in the South West to address key constraints and encourage greater use of digital technologies. The South West Digital Economy Strategy proposes five strategic initiatives aimed at driving growth of the digital economy in the South West: Strategic Initiative 1: Develop the institutional framework to coordinate and deliver the digital strategy. Strategic Initiative 2: Enhance the use of the digital technologies by all levels of government in the South West Region. Strategic Initiative 3: Further develop the digital capacity of businesses, organisations and households in the South West Region. Strategic Initiative 4: Enhance digital infrastructure across the South West. Strategic Initiative 5: Foster greater awareness of the strengths, weaknesses, opportunities and threats in the digital economy. 3.4 Digital Strategy Table 3.1 depicts the required implementation actions for each of the strategic initiatives within the South West Digital Economy Strategy, translating the strategic initiatives into actions. Outcomes and measures are presented for each action in the following chapter. 13

Table 3.1. South West Digital Economy Strategy Strategic Initiatives Strategic Initiative 1: Develop the institutional framework for the implementation of the strategy Strategic Initiative 2: Improve publicprivate engagement and government uptake Objectives Rationale Actions To provide the institutional framework for the delivery of the Digital Economy Strategy in the South West Region To improve connectivity of government agencies and local government with households, businesses and other organisations in the South West Region To improve internal processes in government agencies and local government with the aim of increasing efficiency and convenience and better service to the public Unless an institutional framework is in place there is a risk that the implementation of the digital strategy will be fragmented, under-resourced and delivered in an uncoordinated and inefficient way Households, businesses and other organisations are increasingly using the Internet to improve the way they do things Government should demonstrate leadership in the move to the digital economy Determine which institution in the SW should have primary carriage for the implementation of the digital economy strategy (e.g. RDA-SW, SWDC, SWIT, ECU, other areas of government) Appoint digital economy strategy project manager to coordinate and manage the delivery of the strategy Appoint a digital economy strategy steering group to oversee and advise on the implementation of the strategy Seek funding for the implementation of the strategy Develop a process for evaluating progress in implementing the strategy, monitoring and evaluating its progress Increase government s use of digital technologies in day-to-day activities leading by example Audit of use of digital technologies by government agencies and local governments identify strengths and weaknesses, opportunities and threats Conduct workshops and provide training in the use of digital technologies for government employees Adopt digital technologies in regulatory processes (e.g. local government planning and building permit processes, government licensing processes) Use Skype, Facebook and Twitter as media for communication, particularly for community oriented services 14

Strategic Initiatives Strategic Initiative 3: User capacitybuilding Strategic Initiative 4: Infrastructure capacity-building Objectives Rationale Actions To build the capacity of households, businesses and other organisations to assist them in realising the potential benefits of adopting digital technologies To enhance regional infrastructure provision to increase access to the digital economy and its benefits Households, businesses and other organisations are increasingly moving to the digital economy However, the vast array of benefits that could potentially be realised through adoption of new digital technologies is continuously expanding Assisting households, businesses and other organisations to take up these new technologies will ensure they are able to take advantage of opportunities they present This is important because the technology alone is useless it needs people to actually uptake it for benefits to be realised Consultation clearly highlighted the gap that exists across many user groups in terms of understanding of digital technologies and how to use them Government can play a key role in attracting funding for the development of enabling infrastructure This is important because the benefits of digital technology cannot be realised if people cannot access it Address concerns regarding social isolation and information overload through the publication of easy to understand factsheets and case studies for broad distribution Identify detailed potential opportunities in key areas, e.g. health (ehealth initiatives), education, environment (energy use), tourism to build further capacity to use high speed broadband technology Provide support for businesses and other organisations to develop strategic plans for adopting digital technologies through a series of workshops with various partners (i.e. Department of Agriculture and Food for engagement with agricultural and agri-business stakeholders) Develop and deliver targeted training programs in the use of digital technologies for households, businesses and other organisations highlighting new opportunities digital technologies can bring (e.g. the potential for businesses to develop new products and services as well as access to new markets, the delivery of health and education services, and how organisations manage staff) through a series of workshops with various partners (i.e. the Chamber of Commerce for small business) Identify and publicise ICT firms in the South West Region, which can provide support services, including: o Hardware support, e.g. dealing with device compatibility issues o Website design and hosting o Software development and operating system support o Selling space on local aggregators o IT consultancy, support and construction of Virtual Private Networks (VPNs) o Training o Cloud server support services Maintain relations with NBN Co and establish a single point of contact Identify infrastructure needs to support the roll out of high speed Internet, especially in more remote areas (e.g. mobile/internet coverage, required speeds for video conferencing, etc.) Drive agenda for free WiFi in Supertowns Local government can also facilitate increased provision of WiFi hotspots and other infrastructure through local planning instruments. Create places of interest and interaction Seek funding support for uptake of more expensive devices in education, health, etc.(e.g. ipads, electronic whiteboards, medical equipment) 15

Strategic Initiatives Strategic Initiative 5: Address fears, uncertainties and doubts Objectives Rationale Actions To increase households, businesses and other organisations awareness and knowledge of digital technologies to remove the fear factor of moving to the digital economy The fear of the unknown is one of the main barriers to the uptake of digital technologies by households, businesses and other organisations Better education, and observing others, in the use of digital technologies will enable households, businesses and other organisations to take advantage of the benefits of digital technologies This is important because the technology alone is useless it needs people to actually uptake it for benefits to be realised Using simple (not overly technical) explanations, educate households, businesses and other organisations on: o How to increase consumer confidence in the technologies by overcoming fears, uncertainties and doubts, e.g. setting up online security, privacy and payments systems o The benefits of adopting digital technologies, beyond simply keeping up with the times. They need to see that this technology will improve their lives, e.g. Convenience Freedom to work/learn/live remotely Cost savings Improved profits Improved productivity Competitiveness International trade markets Marketing/promotion Identify digital champions to reinforce that success can be achieved Develop websites, webinars, live streams, seminars, workshops, field days, etc. that address the above points 16

4. Tracking Our Progress The advancement of the Digital Strategy will need to be tracked to ensure that the goals will be met and the benefits to the community and economy are delivered. Measuring progress should be conducted in two ways: Tracking of the initiatives highlighted in this Strategy (Did we do what we set out to do?); and Tracking the results of the initiatives and if the goals are going to be achieved (Are we achieving what we want to?). The following action plan will assist in measuring and tracking the strategic initiatives. Table 4.1. South West Digital Economy Strategy Action Plan Ref. Actions What needs to happen Strategic Initiative 1: Develop the institutional framework 1a. Determine which institution in the SW should have primary carriage for the implementation of the digital economy strategy (e.g. SWDC, SWIT, ECU, other areas of government) 1b. Appoint a digital economy strategy steering group to oversee and advise on the implementation of the strategy Conduct a 2 hour workshop with key stakeholders to identify the key organisations to be involved and identify the appropriate mechanism to approach these organisations. Building on previous workshop (1a), form a steering group with key stakeholders that will oversee and participate in the implementation of the strategy. 1c. Seek funding for the implementation of the strategy Identify potential funding mechanisms through various Federal and State Government institutions as well as internal budgets. 1d. Develop a process for evaluating progress in implementing the strategy Conduct an annual Digital Forum to discuss progress on the strategy and identify emerging issues to consider. Strategic Initiative 2: Improve public-private engagement and government uptake 2a. Increase government s use of digital technologies in day-to-day activities leading by example 2b. Audit of use of digital technologies by government agencies and local governments identify strengths and weaknesses, opportunities and threats 2c. Conduct workshops and provide training in the use of digital technologies for government employees 2d. Adopt digital technologies in regulatory processes (e.g. local government planning and building permit processes, government licensing processes) Identify and promote local leaders around the provision of government services online in order to encourage higher usage rates. Undertake a detailed audit of various government departments and services to identify key areas of growth for government use of digital technology. Conduct a 4 hour workshop utilising local experts and case studies as well as highlighting case studies from other regions across the country where governments have successfully implemented digital technologies. Identify various service providers and invite them to the region to engage with local governments to identify the cost and scale of the task to get permitting and licensing online. 2e. Arrange free WiFi in government buildings Conduct an assessment to identify specific government buildings (ones that receive frequent visits from the public) that require WiFi as well as an indicative cost to implement the infrastructure. 2f. Use Skype, Facebook and Twitter as media for communication, particularly for community oriented services Conduct a daylong seminar for government stakeholders to provide basic training in social media and provide summary communication highlighting the benefits (and case studies) of using social media for government. 17

Ref. Actions What needs to happen Strategic Initiative 3: User capacity-building 3a. Identify detailed potential opportunities in key areas, e.g. health (e-health initiatives), education, environment (energy use), tourism to build further capacity to use high speed broadband technology 3b. Provide support for businesses and other organisations to develop strategic plans for adopting digital technologies through a series of workshops with various partners (i.e. Department of Agriculture and Food for engagement with agricultural and agri-business stakeholders) 3c. Develop and deliver targeted training programs in the use of digital technologies for households, businesses and other organisations highlighting new opportunities digital technologies can bring (e.g. the potential for businesses to develop new products and services as well as access to new markets, the delivery of health and education services, and how organisations manage staff) through a series of workshops with various partners (i.e. the Chamber of Commerce for small business) 3d 3e Identify and publicise ICT firms in the South West Region, which can provide support services Address concerns regarding social isolation and information overload through the publication of easy to understand factsheets and case studies Strategic Initiative 4: Infrastructure capacity-building 4a. Maintain relations with NBN Co and establish a single point of contact 4b. Identify infrastructure needs to support the roll out of high speed Internet, especially in more remote areas (e.g. mobile/internet coverage, required speeds for video conferencing, etc.) 4c. Local government can also facilitate increased provision of WiFi hotspots and other infrastructure through local planning instruments. Create places of interest and interaction 4d. Seek funding support for uptake of more expensive devices in education, health, etc.(e.g. ipads, electronic whiteboards, medical equipment) Strategic Initiative 5: Address fears, uncertainties and doubts 5a. Using simple (not overly technical) explanations, educate households, businesses and other organisations 5b. Identify digital champions to reinforce that success can be achieved 5c. Develop websites, webinars, live streams, seminars, workshops, field days, etc. that address the above points Source: AECgroup Using the steering committee and project coordinator, identify distinct, industry specific areas of opportunity (i.e. primary education, tourism marketing, etc.) to increase the use of (and benefit from) digital technologies. Work with key partners (like DAFWA, DETA, TAFE) to run industry specific workshops that promote the use and benefits of digital technologies through the use of local case studies and others from Australia. Together with TAFE, develop basic social media training courses. Together with relevant stakeholders (i.e. Chamber of Commerce, Department of Health, etc.) conduct basic training courses for targeted user groups (i.e. small business, GPs, etc.) for use of digital technologies. Using White Pages and broader consultation with the local business community, develop a digital technology support directory, highlighting the local business, services provided and contact details. Promote the directory online. Widely promote and circulate fact sheets and case studies. Update these on a regular basis as required. Use the project coordinator to provide a direct (and singular) point of contact for the SW region. Provide on-going updates regarding the roll out of high speed broadband in the region. Together with NBN Co. and local governments, identify required infrastructure support for the roll out. Provide cost information for the provision of WiFi in activity centres using Bunbury as a case study. Encourage cafes and businesses to provide free WiFi. On an on-going basis, identify potential funding and grants to supply equipment. Develop and promote a series fact sheets and case studies in regular communications and newsletters with households, businesses and other organisations. At initial workshop with key stakeholders, identify digital champions and promote their stories through on-going communications. On an on-going basis, identify future opportunities to provide further education and promotion of digital technologies. Tracking the results of the strategy and progress towards the goals should be conducted on an annual basis. The ABS provides information regarding business and household use of the internet on an annual and five yearly basis (depending on the dataset). Other goals will need to be monitored through engagement with specific stakeholder groups (i.e. education, health, etc.). 18