Productivity, national broadband network and digital economy: challenges for Australia

Productivity, national broadband network and digital economy: challenges for Australia

Although the Australian economy expanded significantly in terms of its market sector development over the past four decades, the productivity growth has been stalled since 2000. Productivity growth (particularly multi-factor productivity) is of interest to policy makers because it reflects improvements in efficiency which can be fostered through enhanced innovation capabilities. Although typically linked to structural adjustment and microeconomic reforms, development and diffusion of information technologies played a significant role in productivity gains in the Australian context. The Australian Government is currently investing $37.4 billion to build an open access communication infrastructure, National Broadband Network (NBN), to deliver high-speed broadband services at affordable prices to all Australian premises. This will promote efficiency, productivity and new opportunities for all Australians, irrespective of their residence location. By removing Australia's remoteness from major markets, an NBN-empowered digital economy is expected to improve productivity and efficiency in the use of resources. However, the NBN rollout presents challenges too for Australia. The NBN will help address the urban-regional digital divide, however, it will not close the gap. It leaves key question unexplored: whether another type of inequality is emerging within rural and regional Australia in the form of digital literacy disparity. Targeted strategies are therefore required to drive broadband deployment and adoption in regional areas.

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