Australia's ICT industry strong but needs a kick along

The current downturn in Australia's information and communications technology (ICT) sector is unlikely to have any long-term effect on the size the industry, according to the Australian Computer Society.

President John Ridge said even though demand for IT skills is currently lower than a few months ago, most employers seem to believe Australia will "weather the storm well" and that employment prospects remain strong.

"I don't believe the job losses have been as significant in Australia as they have been elsewhere, such as the US. Our research shows the ICT industry is extremely volatile with significant peaks and troughs, but in the longer term the trend has been one of continued growth."

A recent study, 'Impact of the ICT Industry in Australia', prepared for the ACS by Professor John Houghton of the Centre for Strategic Economic Studies in Canberra, found that 236,000 Australians are employed in core ICT-producing industries, representing 2.7 per cent of the nation's employment. 73,000 ICT jobs have been created since 1993, equivalent to 6.7 per cent of the total increase in jobs during that period.

The survey also found that the ICT industry in Australia makes a smaller contribution to the economy than in other OECD nations.

According to Houghton, the small size of Australia's ICT equipment manufacturing and software producing sectors in comparison with other developed countries should sound warning bells for the Government.

"From available data, it really isn't obvious why we don't have a bigger ICT industry. Certainly we don't have much of an electronics industry and we seem to keep missing the boat in the manufacturing area.

"There could be a significant payoff to industry development in the ICT sector, both in terms of increasing our export capabilities and in reducing our reliance on imported products," Houghton said.

"By any standard, Australians are amongst the most intensive users of ICT in the world, ranking fourth among OECD nations in 1999 in terms of the ratio of ICT expenditure to GDP."

Houghton said there is also increasing evidence showing investments in ICT contribute to productivity improvements across the economy, and that the contribution is increasing.

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