Head of the Reserve Bank of Australia (RBA), Philip Lowe, has touted the importance of data and IT for the next phase the nation’s economic development.

In a speech to the Melbourne Business Analytics Conference, Lowe said he wanted to see more business investment in digitisation, IT, and data science as we move out of the COVID-19 recession.

“Investing in data and our digital capability are critical to our future prosperity,” Lowe said.

“These investments allow better decision making and a faster response to the changes in our economy and society.

“These investments are also crucial to organisations delivering the more personalised goods and services that many people are seeking.”

Lowe’s speech comes off the back of a second quarter of positive GDP growth following the economic free-fall led by COVID-19.

Australian Bureau of Statistics (ABS) figures released at the start of this month showed the economy grew by 3.1 per cent in the December quarter, bringing the year-on-figures to a contraction of just 1.1 per cent.

Still, the RBA Governor says high levels of unemployment (6.4 per cent nationally) and low wage growth point to an economy that has not fully ramped up.

Lowe pointed to business investment as an area that “is yet to click into gear” following the height of the pandemic.

“There are opportunities for digital innovation in every sector of our economy,” he told the Melbourne Business Analytics Conference.

“Almost every organisation needs a strong digital capability to perform well, to innovate and lift their productivity.

“Technology and data analysis also hold the keys to solving many of the great challenges of our times, including controlling the pandemic, dealing with climate change and responding to increasing cyber threats.

“If, as a nation, we are to capitalise on your work and the growing opportunities, we need to keep investing in the skills and knowledge of our people.”

ACS’ 2020 Digital Pulse Report estimated digital technology and its productivity gains added $126 billion to the Australian economy in 2019 alone, giving a 6.5 per cent boost to national GDP.

Yet there remains a shortage of local skilled workers who can add value to the digital economy, causing some firms to call for an apprenticeship scheme to help develop a new generation of IT workers.

Lowe promoted the RBA’s own efforts in innovation and data science in order to prove the Reserve Bank is putting its money where its mouth is.

In his speech, Lowe mentioned some of the RBA’s efforts to digitise and lean on data for policy insights such as a program to help measure public economic sentiment through machine learning analysis of news sentiment.

By using natural language processing algorithms trained on a large set of news articles, the RBA explored an unconventional way to measure and predict economic conditions.

He also mentioned the central bank’s move towards digital currency with the New Payments Platform and the potential for a central bank digital currency on the blockchain.

Lowe used his speech to push for greater business investment in data and IT, saying digital technology and a strong economy go hand-in-hand.

“We need these investments to develop the industries of the future and to equip Australians with the skills needed for that future,” he said.

“Australia needs your ideas, your ingenuity and your energy so that organisations across our country can seize the opportunities that will help deliver our future prosperity.”