The head of the Government’s Bureau of Communications Research (BCR), Dr Paul Paterson, has called ICT a “mighty mouse” sector that punches well above its weight on labour productivity contributions to the economy.

Speaking at the ACS Reimagination 2015 conference, Paterson outlined some of the research projects that BCR is working on.

BCR was set up by the now Prime Minister – but then Communications Minister – Malcolm Turnbull as a way to underpin policy decisions in the federal communications portfolio with good research and data.

Paterson started by outlining a project that is measuring “the impact of the digital platform on national productivity growth”.

“Productivity, and productivity growth in particular, is critically important to the well-being of the economy and in particular to the standard of living that we enjoy,” Paterson said.

“When you think about productivity growth, think about getting more output for a given input.

“Labour productivity - how much output is produced for each unit of labour - has been rising over time but capital productivity’s been falling, and on balance, overall productivity has flattened off over the last few years, not only in Australia but around the world.”

However, he noted that BCR’s work had shown for the first time how Australia’s ICT sector contributed to productivity growth. Quite simply, it punches well above its economic weight.

“The ICT sector is, in blunt terms, a pretty small sector of the economy. These days it makes up around three percent of GDP so it’s a bit of a mouse of a sector,” he said.

“But when you look at the impact it has it’s a mighty mouse of a sector. It has a huge impact relative to its size.”

BCR’s research showed that digital and ICT’s contribution to labour productivity growth as a percentage of the overall growth in labour productivity “was an amazing 40 percent” up until the late 2000s.

“Then it’s dipped down to around 15 percent in recent years,” Paterson said.

“Now they’re perhaps counter intuitive results – that is, no one would be surprised that that digital platform has a big impact, but seeing it fall over time suggests there might be issues with data and measurement, so we’re looking into those.

“But on our preliminary estimates, ICT still has a substantial impact.

“Even if the final numbers are close to the mark, it’s still a sector that makes up three percent of the economy contributing 15-plus percent of the growth in labour productivity.”

Paterson noted that the productivity growth impact of ICT and digital technology was also vertical industry dependent.

“On our estimates so far, [it has a] huge impact on the manufacturing sector, making up around 60 percent of productivity growth; financial services and insurance 50 percent, and so on,” he said.

“Some sectors are really amenable to the use of digital services that reduce the need for labour and other capital sources.”

The GDP impact of open government

Paterson also noted a separate project that BCR has worked with Deloitte Access Economics on, to quantify the economics and GDP impact of “open government data”.

“A number of studies around the world have found a large impact on the economy from governments opening up their sources of data, taking account of privacy and security needs,” he said.

“Some estimates put that as high as two percent of GDP.”

BCR’s work with Deloitte included developing some guiding principles that governments could follow to ensure that it maximised the GDP benefit of open data.

“In providing government data, government should look to price that as close to zero as possible, and most certainly not pricing above the incremental cost of providing that data,” Paterson recommended.

“It’s not to be seen as a source of revenue but rather something that contributes to the economy, with that contribution maximised by keeping prices down.

“Secondly a lot of people think there’s not much use in the government trying to add value to that data – leave that to the private sector, who know what it will be used for.

“And finally some particular forms of data have been demonstrated to have particularly high value. Spatial data in particular, transport, health data. That means targeting and prioritising what data is to be made available.”

ICT statistics review

Paterson also briefly touched on a review of available ICT statistics, which is being conducted by BCR and the Australian Bureau of Statistics (ABS).

“We’re looking at four attributes – the timeliness of the data that’s available from the ABS and other sources; its relevance - so is it hitting on contemporary issues; whether data serves us well in terms of measuring the impact of the digital platform, and how the ABS and other data providers can source different data such as administrative data from the government going about its business with delivering services and programs to the public,” Paterson said.

“That’s a really important piece of work, and we’ll report to the Government on that by the end of November 2015.

“It will result in some important changes.”