Artificial intelligence, the internet of things and cognitive, alongside blockchain, machine learning and digital transformation.
The shopping list of emerging technologies set to disrupt Australian businesses is long, endless and evolving. Businesses are placing bets, but future investment levels vary, depending on size, sector and scope.
Today, technology buyers are seeking guidance on how to capitalise, amid a noisy market crammed with new offerings and solutions.
This exclusive IDG Business Leaders Circle - a first of its kind in Australia - outlined key emerging technologies set to disrupt the Australian market, assessing the priorities of business and the opportunities for future market growth.
In the first edition of this two-part editorial series, the country’s leading technology executives debate the question - Is Australia an innovative tech nation?
“There’s an argument that Australia is innovative, and one that we’re not,” observed Kate Eriksson, partner of Digital Innovation and Growth at PwC. “The most helpful frame to have is the confidence we can be, with the realisation that we’re well under our potential performance.
“Innovation is now widely recognised as a central driver of economic growth and development.”
A quick-fire assessment of the country's credentials often serves up the same cliched answer, that in most cases, Australia is a nation of early adopters.
In embracing technology, that is case for consumers, but in the public and private sectors, an alarmingly lag exists, according to Eriksson.
“But we are at risk of slipping behind the world in digital readiness, especially when it comes to business,” Eriksson added.
Australia is ranked 18th on the World Economic Forum’s Network Readiness Index, slipping two places from the previous year.
The index measures the capacity of countries to leverage information and communications technology to improve competitiveness and well-being.
“To say it’s an important one for the future is an understatement,” Eriksson said. “If we fell this far in the Olympic medal tally, there would be an outcry.”
To achieve economic growth at a basic level - two per cent annual GDP growth - Eriksson said the country’s $1.6 trillion economy needs an extra $32 billion pumped into it every year.
“Compounded by an ageing population, we’re not even close to that,” Eriksson warned.
In progressing the conversation further, Nick Verykios - managing director of Arrow ECS ANZ - cited a disconnect between government priorities and market realities as a key blocker to innovative growth.
“The Federal Government talks up a strong innovation focus, but it’s not supported with appropriate budget and most funding is allocated to infrastructure upgrades, re-worded as innovation,” he said.
“Australia has no shortage of locally bred and developed innovative talent, however most head offshore to seek funding and support where their ideas are rewarded.”
Yet the challenge of innovation is not unique to Australia, with EY’s Global Disruption Readiness report in 2018 highlighting that 67 per cent of investors want companies to undertake potentially disruptive innovation projects even if they are risky and may not deliver short-term returns.
Furthermore, 50 per cent of CEOs indicate they are not well prepared to take advantage of disruptive change and opportunity.
“Australia is an entrepreneurial nation however more can be done if we wish to be considered an innovative nation,” added Andrew Garner, lead partner of Oceania Technology Services at EY.
Supporting World Economic Forum sentiment, the Australia National Innovation System Study 2017, found that across a range of metrics on collaboration for innovation, Australia ranks in the bottom half of the Organisation for Economic Co-operation and Development (OECD).
“When it comes to innovation Australian firms tend to specialise in modifying innovations introduced by other domestic firms, while new-to-market innovations are not as common,” Garner said.
“As Australia’s traditional sectors of economic growth change and evolve, boards and senior leadership teams should be actively engaging in robust debate on how they are going to leverage innovation to drive growth.”
Australia has always valued ingenuity, possessing an ability to solve problems differently through thinking outside of the proverbial box, cited as key hallmarks of an entrepreneurial nation.
Yet in echoing the opening observations of Eriksson, standards are slipping.
“Our relative geographic isolation, captive market and small population have meant local businesses have been able to enjoy a period of relatively low disruption, particularly over the last two decades,” outlined Harshu Deshpande, leader of Custom Dev and Open Source at Accenture.
“As clear winners of disruption (through both digital and new business models) emerge from overseas markets and the costs and the barriers to entry in the Australian market decrease rapidly, there is a significant need for local businesses to look to transform themselves and adapt.
“Despite all the rhetoric from parts of the market around the innovation agenda, there is a genuine need for Australia to wake from its slumber to progress innovation from discussion through to execution.”
In assessing the local market, Deshpande identified three key challenges that continue to hamper innovation efforts across the country.
Firstly, continuous innovation requires significant changes to the operating model. Secondly, innovation cannot be driven via the traditional yearly budget cycle and thirdly, a re-imagining of the future workforce is required.
“CIOs face the challenge that only pockets of their organisation have embraced agility and flexibility, with most of their core systems still slow, expensive, hard to manage, and perceived as inflexible,” Deshpande explained.
“While there has been a marked shift towards organisations adopting agile and DevOps practices, businesses continue to have their financial processes stuck to the traditional one-year funding cycles.
“Also, despite all the talk of technology disruption changing the nature of the business and the impact on the workforce, organisations are still not sufficiently investing in re-training and re-skilling their workforce.”
For Verykios, another contributing factor centres around the current education system failing to nurture innovative thinking and creativity.
“Our education sector needs to focus on critical thinking and inventiveness that sets our children on that path of success,” he said. “It’s critical as they will be competing globally now against people coming from innovation driven education and support systems like the USA, China and Eastern Europe.
“The second challenge is a lack of investment from both Federal Government and the private sector to support the long-term investment that is fundamental to successfully delivering innovation beyond a short-term budget decision by the government of the day.”
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