Don't wait for digital disruption, dive into the digital economy, companies warned



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Australian companies must grasp the nettle to develop a digital strategy and look for ways of using digital technology to improve their processes, products or to expand into new markets, a CEDA forum has been told in Sydney.

Reserve Bank of Australia Chief Information Officer, Sarv Girn, said the greatest risk associated with disruption caused by the digital revolution would be to do nothing to respond to technological change and wait for the "waves to break over you".

Companies such as General Motors, Borders, Brashs and Kodak had learnt the hard way the perils of not having a digital strategy and companies should learn from these experiences to seize the opportunities of the digital economy, Mr Girn said.

"Digital disruption means offering a better alternative; it solves a customer problem using technology; it makes things quicker, cheaper and more convenient and it's radical, not evolutionary change," he said.

"There are different strategies businesses can adopt.

"Are you going to be an innovator or are you going to be a fast follower, or adopt continuous improvement? Are you going to chip away by making products, cheaper, better, faster? What's most important is to have a conscious digital strategy."

The forum heard that a recent report by Deloitte Digital found almost one third of the Australian economy faces imminent and major disruption due to the transformative power of the digital economy.

Parliamentary Secretary to the Minister for Communications, the Hon. Paul Fletcher, said the sectors most affected were likely to include some of the nation's biggest employers - retail and professional services.

At the same time, a PwC report argues that building an ecosystem based on innovation and digital technology has the potential to increase Australia's productivity and raise GDP by $37 billion by 2024, the forum heard.

"I'm arguing that digital disruption is making the world an even more intensely competitive place," Mr Fletcher said.

"On the plus side we have the capacity to be even more competitive in developing and exporting software… on the other side, businesses located in lots of other countries can also be world competitive.

"In my view, one sensible principle which could be used to guide our decision making as a nation would be to play to our strengths.

"If we have, as we do have, a large scale, world class resources industry or agricultural industry then the development of IT applications and services to make that industry more productive and efficient might be an area where Australian companies might have an advantage."

However it was important to develop a local venture capital market to ensure the benefits of commercialising great Australian ideas did not flow overseas, Mr Fletcher said.

This meant exploring options such as crowd funding - obtaining small sums from large numbers of people - and employee share options to boost the competitiveness of local start-ups, he said.

Microsoft Managing Director, Pip Marlow, said Australia should leverage its digital infrastructure, say in mining or education, to develop services that could be exported.

"The future of Australian made is going to change and part of that means we are going to need an infrastructure that supports the delivery of services, not only to our own backyard, but an infrastructure that will support us to deliver Australian made services into Asia Pacific and across the digital stage," Ms Marlow said.