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By Libor Pelecky

Small-to-medium enterprises (SMEs) across the economy have been producing a considerable amount of information and communications technology (ICT), according to a report put out by Sensis. And about 74 per cent by value of the ICT was not produced by the sector itself.

DCITA commissioned the report, ICT Production in Australian SMEs, as part of ICT Framework for the Future (F3), an initiative that provides a strategic framework for developing the ICT sector.

Recognising that ICT's contribution to the Australian economy is not being measured enough, an F3 report, Enabling our Future, had recommended further work on understanding and measuring the productivity benefits of ICT across the Australian economy.

The Sensis survey examined a sample of 1800 SMEs across the economy, including the ICT industry. It found that these firms are making a strong contribution to the production of ICT goods and services—16 per cent of SMEs are involved in one or more facets of the production of ICT goods or services.

This included firms that produced ICT goods and services for sale, for their own use, or to embed in non-ICT goods and services. It also included firms that purchased ICT components for embedding in other goods and services.

About 11 per cent of ICT producing SMEs were in the ICT sector, and 89 per cent of those firms involved in ICT production were located in the non-ICT sector. By value, about 74 per cent of ICT production occurred outside the ICT sector.

In the ICT sector, the greatest concentration of ICT production was in the computer services sector. As shown in Figure 2, industry sectors with the highest proportion of SMEs reporting some level of ICT production were communications, property and business services sectors.

Of the SMEs surveyed, a large proportion gained revenue of less than $10 000 from sales of ICT, while about one third of ICT-producing SMEs made between $100 000 and $5 million.

Relating this to the rest of the Australian economy, the report estimated that the total amount of revenue from production of ICT goods and services by all SMEs, for sale or for their own use, was about $15.5 billion over the year to April 2004.

The report also found that the export SMEs who had some level of ICT production were much more likely to be exporting (26 per cent) than the SME population in general (16 per cent).

Furthermore, SMEs in the ICT sector were more likely to be exporting (29 per cent) than either SMEs that were producing ICT in general or other firms.

The report estimates that, over the 12 months to April 2004, SMEs exported ICT goods worth at least $850 million.

Fifteen per cent of sampled SMEs reported having employees whose activities were involved with ICT. Of those in the ICT sector, 67 per cent of SMEs reported having staff involved with ICT. The main occupations of employees who were involved with ICT include IT technician, sales and accounting.

While it is generally acknowledged that ICT has played a part in Australia's recent good productivity growth performance, research done to date leaves much of Australia's recent productivity growth unexplained.

The findings of an earlier report commissioned by the National Office of the Information Economy (NOIE), Productivity Growth in Australian Manufacturing, indicated that the contribution of technology, including ICT, was significantly larger than had been suspected. This study showed that. over the period 1984–85 and 2000–01, between 65 per cent and 85 per cent of multifactor productivity growth in manufacturing was due to technological factors. A soon to be published report on the services sector shows a similar result.

The ICT Framework for the Future report, Enabling our Future, and the full Sensis report, Australian Government Support for ICT SMEs, are available on the DCITA website at www.dcita.gov.au> Information and communications technology > Publications.

• Document ID: 31117 |
• Last modified: 6 February 2008, 11:53am