Australia's IT industry is among the most competitive in the world, according to a new report from the Economist Intelligence Unit (EIU).
The report, The means to compete: Benchmarking IT industry competitiveness, ranks Australia 5th in the world and third in the Asia-Pacific in terms of the overall competitiveness of its IT industry.
"Australia is ranked well ahead of countries including Taiwan, Sweden, Denmark, Canada and Switzerland. In terms of regional players, Australia is ahead of Singapore, New Zealand, Hong Kong, India and China," said Nicola Watkinson, Senior Investment Commissioner for Europe, Invest Australia.
"Australia also performed extremely well in terms of a strong IT infrastructure. It was ranked fourth in the world, preceded only by US, Canada and Switzerland, and first in the Asia-Pacific. Australia's infrastructure built on extensive PC ownership, high broadband penetration, good internet security and substantial spending on IT is a key factor in its robust IT sector.
"The report noted for example that broadband penetration is 20% or more in most OECD countries. But Australia has 33% broadband penetration, which is topped only by the Netherlands and South Korea. Australia's mobile phone penetration is also high at 94.5%."
In addition, the time difference between Australia and much of Asia, including Singapore, Hong Kong and Malaysia is only two to three hours. The ability of companies to service their Asian clients in 'real time' is an attractive competitive advantage. As the first major financial centre to open each day, Australia also provides a time zone which bridges the closing of the US and the opening of the European markets.
For example, a British internet security company has established an office in Australia to capitalise on the time zone location. As a result, Sophos is able to provide 24 hour global customer support. A significant advantage of Sophos location in Sydney is its proximity to the International dateline. Managing Director of Sophos in Australia, Rob Forsyth, explains: Because each day starts in Australia, many hours before Europe or the US, Australia acts as an early warning service for date-based viruses. If we get a virus that is date-based in Australia, we will have the viruses identity out well before Europe gets up. This is a significant advantage for Sophos over its competitors.
In the crucial category of providing skilled IT personnel for the industry, Australia ranked fourth in the world preceded only by US, Singapore and the UK. The report also noted that educational systems in Australia and only a handful of other countries "have made a concerted effort to adjust their training curriculums" to meet the evolving skills requirements of the IT industry.
Australia ranked fourth in the Asia-Pacific, and fifth in the world, in terms of productivity in the IT industry, (hardware and software output per industry employee).
The report singled out a robust legal environment as an important differentiator in overall IT competitiveness. In this category, Australia ranked sixth, ahead of Germany, France, Canada, Sweden, Singapore, New Zealand and Japan.
Australia ranked sixth in terms of government support for the IT industry and seventh in terms of a stable and open business environment, ahead of Singapore, Canada, Germany and France.
"Our favourable rankings in both these categories reflect an Australian business environment which is extremely well-regulated. The OECD considers Australia's approach to regulation as best practice," said Nicola Watkinson.
"This makes Australia a logical early expansion market for smaller IT companies seeking to establish a global foothold, without the financial or management risks associated with some other markets.
"The Australian market is an attractive testing ground, and the highly-skilled Australian workforce is good value in comparison to labour costs in other developed economies," she said.
According to Digital Planet, Australia's ICT market in 2007 is worth around $55 billion dollars, making it the fifth largest in the Asia-Pacific region.
Globally, Australia's ICT industry has earned respect for expertise in niche areas such as e-commerce, intelligent transport systems, digital content, security, smart cards, software development, systems integration and wireless networking.
Australia is also home to sales and marketing operations for practically all of the worlds most prominent ICT companies and is frequently chosen as the location for global technical support centres, software development centres and international business operations support functions.
About Invest Australia
Invest Australia, is the Australian Government's inward investment agency that helps international companies build their business in Australia and offers investors a free, comprehensive and confidential service. Between July 2002 and June 2007, Invest Australia played a verified role in attracting or facilitating 387 projects worth approximately A$55.8 billion, with the potential to create more than 27,900 jobs and generate A$12.6 billion in export earnings.