From Resource Boom to Digital Boom: Capturing Australia's Digital Trade Opportunity at Home and Abroad
The digital economy and the so-called 4th industrial revolution holds enormous promise for Australia’s future prosperity. However, Australia’s strong track record of economic success is no guarantee that we will realise this potential. Understanding the cross-cutting role of digital trade in both the domestic economy and export markets, and optimising the regulatory environment is crucial if Australia is to realise new sources of growth and continue the improvements in standards of living achieved over the 27 years since Australia’s most recent recession.
Though trade was once dominated by tangible goods, growth in global goods trade has flattened as global data flows have surged, with the amount of cross-border bandwidth having grown 45 times since 2005.1 This is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intra-company traffic continue to rise.
Digital trade is also supporting large productivity improvements in domestic sectors, underpinning production and quality improvements, and international competitiveness. Yet, traditional economic measures fail to adequately measure the value of digital trade to exports and Australia’s economy. This creates risk that the value of digital trade is not fully appreciated and taken into account when formulating policy.
This report aims to quantify the economic value of digital goods and services exports, as well as the value of digital trade in enabling productivity improvements in the domestic economy.