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Address ... to the AIIA annual dinner, 'Creating the future: policy strategies for the information industries', Sydney

I'm delighted to have the opportunity tonight to talk about the Government's policy strategies for the information industries.

I can think of few other industries which exhibit the same degree of technological dynamism as yours does.

The pace of change must be both exhilarating and exhausting.

The information technology sector is critical to Australia's growth and prosperity.

The capacity to use and process information is a key function of the smart country.

And the information technology marketplace is one of the fastest growing sectors, valued at 11.2 billion dollars in 1993 and forecast to grow to 17.7 billion dollars by 1998.

Tonight's annual dinner is really about celebrating success in your industry, and in many ways "success" is the underlying theme of my address.

First, I propose to talk about the Government's Information Industries Strategy - formulated back in 1987 by John Button.

The Strategy still provides a comprehensive policy framework for the development of our information industries.

I will also talk a little about the White Paper on Employment and Growth, "Working Nation", which sets out the Government's industry strategy for the remainder of the decade.

I then want to give you a feel for my thinking about where your industries are heading.

In particular, I want to talk briefly about convergence and interactive multimedia.

And finally, I will outline our broad goals for the Australian information industries, as I see them, and the role government can play in achieving those goals.

Let me begin by quickly explaining the reasons behind the Government's Information Industries Strategy.

Back in the mid-1980s, Australia had a trade deficit in the information technology and telecommunications industries of some 4 billion dollars.

And there was every indication that this deficit would blow out to around 10 billion dollars by the early 1990s, and then keep rising.

The simple fact was that major international companies were not investing enough in value added activities in their Australian operations, while our local firms where struggling to break into overseas markets.

Markets, more often than not, dominated by the same international companies.

Our Information Industries Strategy was designed to tackle these structural problems.

Since its inception, the Strategy has guided and underpinned the rapid development and expansion of our information industries.

And by any measure, it has been a striking success.

Exports have burgeoned, and are now above the 2.5 billion dollar mark, while the trade deficit has stabilised.

And many local firms are among the successful exporters.

For example, Stallion Technologies is now earning over 80 per cent of its income in international markets.

While Mincom has become the world's biggest supplier of soware to the mining industry.

And QPSX, which is based in my home town of Perth, continues to impress with its commitment to growth through innovation.

Indeed, the intentional standard for communication protocols for metropolitan area networks is based on the company's development work.

Keycorp and Intellect have each carved out strong positions in segments of the finance and retail markets.

Similarly, Qantek and Preston have established themselves in the transport management sector.

Of course, some credit for the success of the Strategy must also go to the Partnerships for Development Program.

The Program has led international information technology and telecommunications companies to expand and strengthen their long- term commitment to Australia.

As a consequence, exports by Partner companies have sky-rocketed from $170 million in 1988 to $1.2 billion in 1993.

In the same period, research and development spending has increased fivefold.

In 1993 research and development expenditure by Partners exceeded 300 million dollars, compared with 60 million in 1988.

In aggregate, between 1988 and 1993, Partners have invested about a billion dollars in research and development, and achieved exports worth over 3.6 billion dollars.

And these companies continue to make significant investments in Australia.

For example, Oracle is investing 150 million dollars in an Asia Pacific Support Centre in Melbourne, while IBM is investing 45 million dollars in its Asia Pacific Data Centre.

The Program has also encouraged numerous Australian firms and organisations to forge productive alliances with international companies.

Alliances include those between NorTel and Exicom; Nokia and ERG; Unisys and Keycorp; IBM and Hypertec; and ATT and Intellect Australia.

Indeed, around one hundred of our companies and organisations have developed longer-term relationships with the Partners.

These alliances have already enhanced the technological and marketing capabilities of our firms, catapulting some of them into the global marketplace.

Rapid advances in innovation, involving high risk and high cost, coupled with shortening product life-cycles have made such alliances even more vital.

During the past few years, many international companies have chosen Australia as their home base (or Regional Headquarters) in Asia- Pacific.

They include Microsoft, Vodafone, Lexmark, Amdahl, Novell, StorageTek and Computervision.

Others - such as IBM, Hewlett-Packard, Logica, and Digital - have established regional technical support centres here.

Given its effectiveness, the Partnerships Program will continue to be a central feature of the Government's Information Industries Strategy.

More broadly, the Strategy has four key goals.

The First goal is the integration of Australian firms into regional and global markets.

Such integration is essential if our firms are to remain at the leading edge of technology developments, sustain their international competitiveness, and importantly, continue to grow.

I've already mentioned how international companies in the Partnerships Program are helping to "pull through" Australian products, services, and technologies into new markets.

Again, these alliances are crucial if our firms are to consolidate their international activities.

The second goal centres on innovation.

I think it's fair to say most firms - regardless of their line of business - confront the choice of innovating or stagnating.

In your industry, survival, let alone growth, depends largely on the ability of firms to innovate successfully.

The Government has long had a commitment to help our firms become and remain successful innovators.

This commitment will continue and be enhanced in the coming years.

To that end, I intend to release a major statement on innovation next year.

And I must say I'm encouraged by the level of private research and development in your sector, which at 5.1 per cent, is considerably higher than for the wider manufacturing sector.

This augurs well for Australia's future capability.

Of course at the heart of Australia's research capabilities is CSIRO, which is one of the world's largest scientific institutions.

CSIRO's work is built on its collaboration with firms and organisations across many industry sectors, including the information industries.

Another cornerstone of the Government's efforts to nurture strong cooperation between research organisations and industry is the Cooperative Research Centres (CRC) Program.

The great strength of the CRC program is that the end-users of research are closely involved in all aspects of the process.

And of the 51 existing centres, 8 specialise in information and communications technologies, conducting research in diverse areas such as intelligent decision systems, advanced networking and broadband telecommunications.

The Government also has in place an effective Industry Research and Development Grants scheme, as well as the attractive 150 per cent RD tax concession.

In addition, there are industry-specific initiatives, such as the Computer Bounty and the research and development components of the Partnerships program.

The third goal is the development of Reference Sites - which are vital to achieving overseas sales.

The simple fact is, if Australians don't buy local products, it's hard to sell them overseas.

Strong home support for local product provides our firms with a solid base for pursuing international opportunities.

We see this goal as part of our commitment to facilitating export opportunities, including those of our information technology firms.

Recent government initiatives announced in the White Paper, including the Endorsed Supplier Approach, Industry Impact Statements, the Two-Envelope Tendering System, and support for the

Australian Suppliers Program, will ensure that government agencies are receptive to high quality local products and services, without compromising on value for money.

These initiatives will enhance the link between government purchasing decisions and industry development outcomes.

The Government, as a major IT purchaser, is keen to ensure that its suppliers can demonstrate a commitment to world's best practice in terms of standards, quality and service, and long term value added activity in Australia.

The fourth goal is for our firms to achieve and contribute to the setting of international standards.

In short, if our firms are to have ready access to global markets, their products must match or surpass accepted international standards.

To that end, we recently introduced the Information Technology Standards Development Program.

It is designed to help our firms achieve such standards more quickly.

Also, your Association and my Department have worked together to improve the standards infrastructure - testing, certification and accreditation - and to increase awareness of standards issues in companies.

In sum then, the Information Industries Strategy remains the central plank of government policy for your industry.

The Strategy provides a cohesive group of objectives and programs aimed at creating the environment and opportunities for Australian- based companies to increase their share of the global market.

And like all effective policy strategies it aims to be flexible and responsive to changing circumstances.

The Strategy has been updated as market structures and technology have changed.

The information technology industry again received specific attention in the Working Nation White Paper.

As I mentioned at the outset, "Working Nation" set out the Government's broad industry strategy for the remainder of the decade. And it had two key objectives:

. to build competitive firms; and

. to build a competitive environment in which our firms could prosper.

That is why the raft of industry-related initiatives contained in the White Paper focuses on key factors critical to success in global markets - innovation, technology uptake, business improvement, access to finance and skills development.

Indeed, in many ways, IT companies already exhibit the sort of characteristics we are fostering across all industry sectors:

a strong commitment to innovation, and an increasing emphasis on high value added areas;

an international outlook and a strong export focus; and competition based as much on quality and service, as it is on price.

The AIL has already taken advantage of the White Paper's Enterprise Network program, with the impending appointment of a networking facilitator, funded by AusIndustry.

And networking IT firms to create critical size will help underpin ongoing growth in the sector.

And I understand that AusIndustry had an information booth present today.

Those of you who had a chance to talk to the AusIndustry staff, are probably aware of the change "Working Nation" will engender.

In particular, the Government is committed to being a catalyst for promoting activity that is in the broader national interest.

The CeBIT95 promotion is an excellent example of this.

This "Intelligent Australia" initiative will not only be a significant selling opportunity for the 120 exhibitors, but it is a major opportunity to enhance our international reputation as a supplier of advanced ITT products and services.

I now want to speak briefly about converging and emerging technologies.

Convergence is one of the most exciting and important developments for us, socially, culturally and economically.

The rapid developments in communications technologies happening across the world will transform the way we live, work and play.

This wont occur overnight, but many of the tools to bring it about are already here: electronic mail, video-conferencing and interactive multimedia games and training programs are already in widespread use.

These technologies are creating new businesses, as well as helping to restructure existing ones, and are changing cultural and social paradigms.

Australians must not become passive receivers of overseas technologies and value systems.

Rather, Australia is well placed to benefit socially, culturally, and economically as these new media technologies are introduced.

Yesterday the Prime Minister announced a number initiatives in the Cultural Statement that aim to position Australia at the forefront of this next revolution in technology

Australia already has one of the more advanced telecommunications networks in the world.

And substantial investment is taking place to ensure that the information highway is in place.

These investments in infrastructure constitute the essential physical element of the information highway.

Of more importance to Australia's social, cultural and economic development is the creation of the content - the products and services - which will travel on this information highway.

The Government believes that consumers should have a choice between products that have an Australian cultural identity, and products that are merely imported.

To this end, a forty-five million dollar fund, called Australian Multi- media Enterprises, has been created to accelerate the development of some 150 high quality multimedia titles and services.

However, in addition to the delivery of titles, we expect that Australian companies - creators, designers, software developers, publishers and distributors - will cooperate to develop these products and services.

And they will work together to bring products and services to the market.

In addition, two million dollars will be provided over four years to help these companies come together and to assist in creating access to new standards and knowledge of new technologies.

Our fund will be actively looking for investment opportunities, and for private sector participation in those opportunities.

Australia's regional headquarters policies have been very successful in attracting investment, by demonstrating to international companies our attractiveness as a place to do business.

This policy has been particularly successful in the IT sector.

In recognition of the priority that the Government places on multimedia, we will establish this area as a priority under a regional headquarter style contact program.

And we are committed to demonstrating that Australia is the place from which to undertake regional ITT activities.

However, the world doesn't stand still for government policy making.

A raft of new products and services employing convergent technologies, interactivity and multimedia are coming on stream.

We have a highly creative group of smaller multimedia firms capable of supporting local title and services development.

And it is pleasing to see our firms making their mark.

For example, Melbourne-based Beam Software has penetrated American, European and Japanese markets for entertainment titles.

Citibank's first "virtual" Personal Banking Centre, one of the excellent finalists in tonight's Awards, is operating in Chatswood now, with core systems developed by Big Animated Digital.

Organisations as diverse as Smiths Snackfood Company and the Reserve Bank have successfully used multimedia training products developed by Applied Multimedia of Sydney.

In Brisbane, the public can access information in multiple languages on a variety of services through a network of information kiosks established by the Brisbane City Council and North Communications.

And over 14 000 ANZ bank staff have been trained in the workplace on a new accounting package using products provided by Creative Informatics of Melbourne.

And several international companies have commissioned interactive products for global markets, and are examining the viability of establishing significant multimedia and broadband activities in Australia.

Within five years, exports could reach one billion dollars.

Let me emphasise again, that the Government is working with industry to ensure opportunities are captured.

For example, Aspect, my Department and CSIRO are working together to develop an exhibitors' CD-ROM for the CeBIT95 promotion.

Underpinning the Government's broad policy strategies is a clear vision of what we want Australia to become.

It is a vision of a prosperous and fair society.

One of opportunity and enterprise.

And one that recognises that the scientific and technical skills and the creativity of Australians are among best and most effective assets.

It is then a vision of an innovative society.

And again, I emphasise that innovation in IT is helping to drive innovation across many industry sectors.

A society whose economy is advanced and integrated into both the regional and global economies.

It is crucial that we have the drive and the persistence to pursue this vision.

And industry, science and technologies policies have an important part to play in achieving it.

But that entails more hard work.

Before concluding, I want to comment briefly on a major challenge that I see lying ahead, and that we share

In fact, tonight's Awards epitomise this challenge - how to apply information technologies productively.

Clients, including the government, expect a return on investment for their information technology expenditures through improvements in efficiency and direct savings.

For our own part, the Government expects that its own information technology expenditures will deliver efficiencies and, wherever possible, provide opportunities for developing Australian industry.

Through the recently announced Government purchasing reforms, I will be further exploring industry development opportunities in the Commonwealth's information technology investments.

In my own Department, I am constantly looking for opportunities to promote better use of IT products.

A case in point is our new electronic directory of government programs called BizHelp, which is designed to help small firms in particular.

You may also be aware that I am seeking feedback from the industry on the recommendations of the Review Of the Systems Integration Panel, recently submitted to the Ministers for Finance and Administrative Services and myself.

These initiatives will help to enhance the significant role played by government in the development of the IT industry.

But as we know, the government sector is only part of the equation.

We have the good fortune to be a part of the fastest growing region in the world.

The Asia-Pacific IT market in 1993 has been estimated to be currently worth some US 83 billion dollars and is expected to grow to about US 107 billion dollars in 1997.

We have made - and are willing to go on making the required investments in computing and communications.

And we are an increasingly innovative society.

During my recent visit overseas, there was widespread recognition by business leaders of Australia's excellence in innovative areas of information technology.

For example, we are now widely recognised as a producer of specialist software and services.

And our firms are developing a reputation as highly competitive manufacturers of niche products.

Indeed, I believe Australia should aspire to be one of the best countries for IT companies to invest.

One of the best places to build robust information technology and telecommunications businesses.

To be more specific, I believe that Australia will be increasingly recognised as:

A nation with advanced information technology systems and services, built upon a national telecommunications infrastructure that is a world leader in functionality, efficiency and cost.

A centre of excellence in software, services and smart hardware, with advanced technical education, research, leading edge design and engineering skills, and access to leading users around the world.

One of the early adopters of interactive and multimedia products designed to enhance innovation and business efficiency across the economy and throughout society; and to underpin the emergence of multimedia as a new export industry.

A regional centre for innovation, including research, development and trialing.

And an ITT supplier to all major markets, including the rapidly expanding Asian region.

Let me conclude by reiterating that Government is committed to working closely with your industry to achieve a shared vision for the Australian information industries.

The strong growth of your industry since the inception of the Government's strategy is firm evidence that we are making steady progress towards a common set of goals.

And I hope that we will continue to do so.

But I want to leave you with one word of caution.

Government can create an environment that encourages industry growth and development.

But it is you - the companies, the people, the industry - who have to deliver the outcomes.

You have to make the investment and commitment to growth.

And you, more than anyone else, will benefit from that commitment.

I hope then, by working together, we can realise the great opportunities that are now available to us.

Thank you.