Business unprepared for 4th industrial revolution: Ai Group report
"A new Ai Group report finds that while Australian businesses are investing in new technologies to enhance profit and performance, industry as a whole is lagging in adoption of key innovations," Australian Industry Group Chief Executive Innes Willox said recently.
"With the WannaCry ransomware attack still reverberating, it is also particularly concerning that the report shows that businesses have been slow to adopt cyber security technology.
"Technology is transforming whole sectors, including through the fusion of digital and physical production systems: the so-called 'Fourth Industrial Revolution' (referred to as Industry 4.0 in manufacturing). However, the report finds that many businesses are yet to embrace the technologies that can grow – or protect – their operations.
"Ai Group's Business Beyond Broadband report is based on a wide survey of Australian businesses, and confirms a close association between investment in digital technologies and higher business performance. Businesses are investing to improve customer service, lift productivity and boost competitiveness.
"There is much to celebrate. Cloud computing is now widely used to cut costs, improve service and ease business growth. Business makes extensive use of mobile apps, enabled by our vibrant and mature mobile telephony market. "The Internet of Things is widely discussed and ever more devices are becoming connected, but most businesses are not yet investing in or using the building blocks of this technology. It remains elusive, as businesses are yet to fully integrate its technological foundations.
"Cyber security is a critical risk management issue for the boardroom, and is growing more so as more activities go online, more devices become connected, and threats evolve. Despite this, 78% of businesses surveyed did not report using cyber security technology beyond common defaults. Few saw cyber security issues as a barrier to new digital investments. This confirms the findings of other observers, and is deeply concerning given the demonstrated ability of cyber breaches to damage reputations, disrupt business operations and bring down critical infrastructure.
"We need to get on top of security as digital technologies and the Internet of Things continue to grow in Australia.
"The NBN continues to play an important role in supporting growth. While rollout is accelerating, most regions are yet to be served. 2017 should see the NBN strive to meet more businesses' needs than ever before.
"Getting the most out of technology requires businesses to build digital into their strategies. Many are doing so, for instance by growing digital skills through staff training and recruitment. This will be vital to ensure businesses have a future-ready workforce. However, some 17% of businesses plan to do nothing to improve staff digital skills. This and other disconnects leave too many businesses at risk of falling behind local and global competition.
"There is much that industry can do to improve performance and collaborate with governments and other bodies to help Australia embrace the fourth industrial revolution. Business Beyond Broadband highlights the progress we've made – and the imperative that Australia not become one of the unlucky countries that falls behind," Willox said.
- Only 22% of surveyed businesses reported using cyber security measures.
- Only 13% of businesses nominated cyber security as an inhibiting factor for business investment in digital technologies.
- Businesses that did not use any of the digital technologies surveyed had about 14% lower gross profit margins.
- Businesses that did not invest in digital technologies saw an average 3% decline in revenue, while businesses that maintained investment showed increasing revenue (5%), as did those that increased investment (4%).
- The main barriers to business investment in digital technologies were lack of employee skills (33%), costs (31%), perceived lack of relevance (24%) and slow internet (23%).
- Only 15% of businesses believe they have a high level of digital skills – but 17% of businesses expected to do nothing to improve skills.
- 59% of businesses surveyed are willing to pay for faster internet services.
- Businesses that made use of ‘big data’ experienced an average 16% growth in gross profit margin over the year, yet only 7% of Australian businesses make significant use of big data.
The research report, ‘Business Beyond Broadband: Are Australian Businesses Ready for the Fourth Industrial Revolution?’, will be officially launched soon.
The full report is available here.
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