20 December, 2012 | Public Policy

2012 Australia 3.0 Forum Report

2012 Australia 3.0 Forum Summary Prepared By Brad Howarth, Rapporteur for Australia 3.0

On August 9, 2012, more than 100 leading thinkers in the fields of innovation, research and academia within Australia’s information and communication technology (ICT) sector gathered at the Crown Palladium in Melbourne. Their task was to discuss the significant issues facing four of Australia’s critical business sectors –mining & resources, manufacturing, agriculture and services – and to prioritise various options through which the ICT sector might render assistance.

This one day event was the second stage in a process that had commenced more than a month earlier via a moderated online discussion forum held using the Yammer social media tool. The feedback gathered through Yammer was used to generate the discussion points for the assembled group.

The day kicked off with a short speech from innovation champion Dr Terry Cutler, with the bulk of time then divided into four sessions to discuss specific recommendations for each sector. Each commenced with a short presentation or interview with an acknowledged expert in the nominated business sector, hosted by Roger Perry (CEO, Bevington Group), followed by an hour of discussion within groups of attendees. At the end of discussions the groups selected their top four issues from the list of issues & questions provided, and which were then collated at the day’s end.

While much of the project content is retained within Yammer, this report has been written to convey the discussion points from the one day event. It is a summation only, and does not propose recommendations. That process is ongoing.

Opening remarks, and the Mining Sector

The opening remarks for the day were made by Dr Terry Cutler, a prominent thinker on the topic of innovation and the broader economy, and author of the 2008 report on innovation titled Venturous Australia.

Cutler discussed the loss of linkages between innovation, productivity and competitiveness. He contended that these must be tightly coupled to create national prosperity, as productivity was not an end in itself but was an important component of competitiveness, and we also become competitive through innovating. Therefore the only way that we could be more productive and deliver a higher standard of living was through innovating.

He finished by exhorting the audience to take action at all levels to bring these three factors back into alignment.

Following Cutler’s remarks Roger Perry introduced Dr Stephen Giugni, the CSIRO’s deputy director of the Minerals Down Under National Research Flagship. When asked about the big productivity opportunities in the mining sector, Giugni highlighted the massive variance within the industry in terms of the size of participants, and the split between the iron ore and coal sectors, which are performing well, versus the many others that are managing to only break even. He said productivity was a difficult issue to discuss in a sector where the price of commodities can vary by as much as 50 per cent in a matter of years.

Giugni cited ICT-based productivity enhancements as coming through focusing on decreasing the cost of identifying and extracting new reserves, optimising the production cycle across the mine site, and optimising transport, but in each segment of the industry the role of technology would need to be tailored. He also cited one recent example where survey data from across Australia had been brought together and made available through a comprehensive and accessible map to assist exploration companies. Opportunities also exist around process optimisation and new process development, but many of these are not ICT-dependent. Productivity in the sector however remains difficult to measure.

Questions and comments from the floor included one regarding the implementation of remote operation and automation and the potential for shared services provision from the ICT sector, and another questioned the relative benefits that could be derived from utilising existing technology or investing in new fields. The point was also raised that Australian innovators have struggled to commercialise their breakthroughs.

Agriculture

The second speaker was David Jochinke, vice president of the Victorian Farmers Federation, who described the basic function of agriculture as to either grow a crop, or grow a crop to feed an animal. This simplicity however belies a highly technically-sophisticated industry. Growth in population assures the need for greater production, while increasing wealth drives demand for higher quality. This leads to ethical questions as to how food is produced.

Jochinke said innovation can come from a wide range of technical disciplines, including biology, chemistry, engineering and information, and increasingly marketing and strategy. Because Australia was not blessed with the best soils or rainfall, and had expensive labour, so it was the incorporation of technology that made Australian agriculture world class. But he cautioned that the adoption of technology alone was not enough, as whatever Australia did could be rapidly duplicated elsewhere.

Questions and comments covered how technology such as micro-management through GPS had driven productivity improvements, despite such systems still requiring connectivity between different components to realise their full potential. Another discussed how social media would play an increasingly import role in marketing. The sector however remained significantly impacted by government legislature, particularly with relation to carbon, meaning much more research is needed to understand the inputs and impacts in that area.

Manufacturing

CSIRO’s group leader for Sustainable Automotive Engineering Dr Stephen Collocott discussed the challenges of the manufacturing sector as viewed through the prism of the Australian car industry. He described the pressures on local manufacturers from global competition and the need to connect to global supply chains in a resource-constrained world, and asked attendees to consider how we would transition our manufacturing sector for the future. He said manufacturing must be productive, agile and able to maximise the use of our potential in order to compete. Other pressures included the digital enablement of the world, particularly through personal devices, the aging workforce, and the increasing need to be green in our manufacturing.

Collocott said productivity opportunities came through making use of the opportunities to take strategic places in global supply chains, which could only come through ensuring Australia had a high-value, agile manufacturing industry. He said Australia also suffered issues of scale, which meant manufacturing must be highly export-oriented to achieve the volumes that would make manufacturing economically viable. And while we had a comprehensive range of statistics covering the sector, the measurement of productivity was highly complicated.

Services

The presentation on the services sector was given by Alan Dormer, the theme leader for Government and Commercial Services at CSIRO. Dormer outlined three trends – self-service, big data insight and automation – as being the future directions for services in Australia.

Dormer said one of the barriers to service innovation was the proliferation of legacy software. Hence he saw a significant advantage in the adoption of cloud-based services, specifically to give SME service companies access to a state-of-the-art, end-to-end ERP or CRM systems for just a few dollars each month. Another big trend was teleworking to drive productivity and save costs, and the use of machine learning to avoid data errors. Making government data available on websites would enable many new businesses to be created.

Dormer said the danger was that the comfortable margins that exist in many services may leave providers blinded to new threats coming in from lower-cost markets, causing them to fail to innovate or invest in productivity enhancements. If a customer could do self-service securely through their screen, they might care more about the price of a service and less about where it was conducted.

Wrap-up

Towards the end of the one day event each Australia 3.0 committee member was asked to provide a summation of the experience thus far. Wayne Fitzsimmons described the event as a platform for engagement with the respective bodies that represent the industries discussed, and praised it for creating data that could be used to start a dialogue. Ian Birks raised the question of how the transformative impact of ICT could be taken into these groups, and how a pathway might be found for those discussions. Similarly, Russell Yardley said it would be important to use the data collected through the session and through Yammer to connect with industry groups such as the Victorian Farmer’s Federation, to connect the benefits of technology to the supply side of industry. Dr Phil Robinson described the necessity of getting information into the hands of potential users in a way that they could actually use it.

While attendees agreed that some of the points discussed had been aired previously, there was a consensus that it was vital to take these discussions beyond the event itself and to find other people who were passionate about these topics to help spread the message of the benefits of ICT into the target sectors. To do that effectively however it was vital for representatives to show a deep knowledge of the sectors they were talking to. Without that credibility, resistance may be high.

Yammer voting

Of the questions posed for each of the industry sectors, participants were asked to nominate those four that they considered to be the most important. The top ranked questions from each session were then collated at the day’s completion (there was a tie between two questions in the services category):

Mining:

• Is there a disconnect between major players and the SMEs?
• Do the large miners need to lift R&D spend?
• How critical is modelling the "Mine of the Future"?
• How significant is ICT to the Mining & Resources sector

Agriculture:

• Who drives the technology to change productivity?
• How best to engage with farmers on new technologies
• What is the role of Social Media in agriculture?
• What to do to strengthen interaction between industry and research groups?

Manufacturing:

• What are the emerging opportunities in manufacturing technologies?
• What is the 20-year strategy for the Australian manufacturing sector?
• Do we need to better understand the global eco-systems driving manufacturing?
• Are collaboration, partnering and clustering significant elements underpinning the future of manufacturing?

Services:

• Can services productivity gains assist the national economy?
• Can national infrastructure planning, investment and regulation lift productivity?
• How important is up-skilling management post-tertiary?
• Is measuring productivity the answer?
• Is automation using contemporary ICT (example cloud computing) likely to improve productivity?

While some of the responses are sector-specific, across each set of questions, certain keywords or themes are repeated:

• Engagement
• Responsibility
• Collaboration/partnering
• Opportunities/strategy
• Globalisation
• Skills

Conclusions (edited by organising committee)

There are several conclusions that can be extrapolated from the highest ranked questions. There were common threads which pervaded the online forum, the round-table discussions and the final summary session. The ICT industry is continuing to revolutionise our society and will be, for the foreseeable future, the major driver of productivity improvement in the Australian and global economy. The following conclusions are inextricably linked to each other and may be summarised as Engagement, Strategy, R&D and Skills..

1 Australia 3.0 as an ENGAGEMENT platform

The 2012 Australia 3.0 Forum explored engagement with four major economic sectors and exposed strengths, weaknesses and opportunities. This engagement needs to be strengthened and broadened. In addition the Forum exposed needs and issues of engagement within the ICT industry itself.

• Firstly, the ICT sector must engage more closely with the sectors that it believes it can assist. Participants were united in their belief that ICT provided answers to the problems that beset these sectors, and provided options for creating innovation and driving productivity improvement, but they felt disconnected from the decision makers.
• Secondly, responsibility for engagement is shared amongst parties. However, as it is the ICT sector that is seeking closer engagement, it must be the ICT that creates the conditions for that engagement to take hold. That means that the ICT sector must work harder to articulate its value and to build relationships with key groups and decision makers, possibly through the use of exemplars within the target sectors.
• Thirdly, driving innovation and productivity through ICT will require a deep level of collaboration and partnership. Partnership denotes equality, and hence the ICT participants need to truly move beyond just selling and demonstrate understanding and capability to make themselves attractive partners. In many cases this may predicate a strong requirement for additional learning among those wanting to engage as partners. The innovative use of ICT across all industries has been the prime driver of productivity growth on the Australian economy not the oft quoted “micro-economic reform’ activities of legislatures (this is not to imply that micro reforms aren’t significant, just not as significant as the impact of ICT).
• A fourth successful outcome of this engagement meant that many industry bodies, institutions as well as companies were able to meet formally as well as informally. It is true all meetings of this type attract a diverse set of attendees, but in this case the bodies involved signalled a desire to sustain this collaboration in the pursuit of the goals of Australia 3.0, and perhaps make a start on genuine collaboration on national issues where Australia and Australians have been particularly fragmented in their attempts in the past.

Here is a sample of the organisations that expressed this desire and which will form the basis for progressing Australia 3.0 in 2013.

• The three organising bodies viz AIIA, ACS and the Pearcey Foundation
• CSIRO and NICTA
• DSTO
• Australian Academy of Technological Sciences (ATSE)
• The telecommunications Society of Australia
• Service Roundtable of Australia
• Australian ICT Industry Innovation Council

Moving to engage with a broader range of industry associations in these verticals is a challenging prospect but one that is already being pursued by members of the organising committee and interested members of the Forum.

2 STRATEGY

Such an engagement platform will facilitate the development of strategies responsive to the needs of society, the economy, government and industry within an environment of rapid change. Such strategies may cover education, R&D, infrastructure, funding priorities and engagement in global and regional standards and protocols.

As these partnership roles develop, the ICT sector must also play a strong part in identifying opportunities as well as setting strategy for the sectors that it engages with. This may be in collaboration with government agencies, in addition to sector-specific organisations. It requires the ICT sector to take its forward-looking agenda and fit this to the needs of industry.

Recognising that the issues facing industries in Australia are global issues and that Australia exists within a global market, of which some segments differ widely in their maturity, is critical. Australian industry must better comprehend its place in global supply chains, particularly in consideration of emerging lower-cost economies. The ICT sector must reflect this global perspective when engaging within the sector to develop new strategies.

3 R&D Research and development are fundamental to continuing improvement in Australia's productivity and global competitiveness. An effective engagement platform between strategies, needs, capabilities and funding is essential.

Given that ICT has THE crucial role in these vertical industries developing a comprehensive appreciation of the global eco system in which they operate, then perhaps a key by-product of the engagement will be much closer alignment between publically funded R&D bodies (such as Universities, CSIRO and NICTA) together with their priorities, and the R&D groups within the private sector (large corporates as well as SME’s) based on their respective perspective on global imperatives for new products and services.

4 SKILLS TRANSFER

Revolutionary changes in technology are not going to stop and an ICT engagement platform will accommodate adaptive changes in education, training and re-training within the ICT industry and also within society, industry and the broader economy to match opportunities and needs.

It is vital that skills transfer takes place between the ICT sector and the industries that it assists. This includes ‘hard’ skills in information management and processing, ‘business-oriented’ skills in fields such as ecommerce, and ‘softer’ skills such as social media marketing. As it is recognised that ICT will play a greater role in the determining the fortunes of the sectors discussed, it is vital that those sectors’ capabilities are raised.

The general conclusions from the Yammer discussion included numerous calls for the points raised to be submitted to various industry associations and government departments that represent the sectors studied. Overarching this was a call to create coalitions with other bodies to improve awareness and create opportunities for joint development of solutions, including reaching out to those organisations that might act as exemplars to others. While this might raise issues of intra-industry competition, the real competition for Australian business is global, not between local participants. However, this all has to be tempered with the reality that this suggested engagement rationale is not tried and proven. Tackling more verticals is definitely on the agenda but the belief is that the engagement model needs to be tested and to be seen to be worthwhile for all parties involved, before expansion efforts are attempted (refer also to fourth point in section one above in CONCLUSIONS).

The central issue was the need for ICT to have a ‘dedicated seat at the table’ when it comes to discussions of productivity and innovation across industry segments. The consensus of the event was the understanding that this had not yet happened, except perhaps in specific examples. This meant that ICT needed to be better able demonstrate both the role that is plays in improving productivity, and its experience of the sectors that it seeks to benefit. One concrete model for engagement could be for iAwards to present awards to one or more SMEs in a particular vertical whose efforts are recognised by their peers in that vertical as being game changers or of global significance for any number of criteria. Collaboration with that vertical in seeking out nominees and agreeing the criteria may well be the vehicle for starting serious dialogue on how all can collaborate to lift productivity.

Regardless, the mood of the day was one that called for a continuous process that would capitalise on the work done so far both through Yammer and the event itself. A summary of the outcomes is shown on the accompanying chart below.

Photo: Australia 3.0 Forum 2012 Summary of outcomes

Organising Committee

Co-Chairs: Ian Birks & Wayne Fitzsimmons

Committee members: Russell Yardley, Dr Ian Oppermann, Dr Michael Bruenig, Dr Phil Robertson, Rick Harvey, Ian Wells, Bob Cupitt and Ms Jo Dalvean