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NAB, as a multinational, is already experiencing some of this, even internally. Their New Zealand website is operated in Australia. Interview: Tim Batten, National Australia Bank, IRG member, 12 July 1999 The transfer of value overseas can occur as the processing of transactions can be done anywhere. Interview: Jason Anderson, Australian Stock Exchange, IRG member, 12 July 1999 The inflow of value from overseas is not significant and would be predominantly from the acquisition of international banking operations by the Australian banks and any associated movement of functions to Australia. For example The Bank of New Zealand owned by NAB operates its Internet site and undertakes all its processing in Australia including monitoring and supporting its ATM network. E-commerce is a major enabler of this, specifically EDI, the Internet and other dedicated networking systems. Value can be transferred from overseas in the form of staff. The ASX has one-third of its employees in IT and software roles and is looking to source staff from overseas. Interview: Jason Anderson, Australian Stock Exchange, IRG member, 12 July 1999 Key points The opportunities opened up by e-commerce is a factor driving change in the banking and financial services sector. Use of e-commerce is shifting demand and supply in the sector to lower cost more convenient service delivery channels. In meeting the broad range of financial service needs that customers have within a single entity, the distinction between banks and other traditional financial service roles is becoming blurred. The potential of online financial services has reduced many barriers to entry and is increasing competitive pressures. It is likely that cost savings that will result from this process will be passed on to consumers. When looking at quantitative analysis of the sector it seems reasonable to factor in a wide range of direct changes: – direct labour savings extending the staff reductions the sector is already achieving; – banking is also expected to be able to disintermediate other input costs, particularly those that relate to the operation of branch networks. To reflect this it can be assumed that a small reduction in inputs of construction and paper products is achieved (equal over time to about three and five per cent of those inputs); – reflecting the increased convenience of online banking and financial services, time savings should be included as an efficiency gain for other industries that use the services of the sector as well as households; – the sector has already boosted expenditure to purchase e-commerce inputs and these are already factored in to the base case forecasts. Nevertheless, it is prudent to make an allowance for additional investment reflecting assumptions about greater use of e-commerce and online financial services; and – for the moment it is assumed that this sector will not face greater international competition or experience a significant boost in exports from e-commerce. 100
Section Three Information Technology (IT) industries and e-commerce Computing power has been doubling every 18 months for the past 30 years. At the same time, the average price of a transistor has fallen by six orders of magnitude, due to microprocessor development. In just six years (1991 to 1997), the cost of microprocessor computing power decreased from $230 to $3.42 per MIPS. No other manufactured item has decreased in cost so far, so fast. Henry D, Cooke S, Montes, 1998, The Emerging Digital Economy, US Department of Commerce 1998 The IT industries are relatively new and dynamic in nature. The IT industries have a number of unusual characteristics. They are among the fastest growing industries. Technological change is rapid and product life cycles are short. Most product and service prices are falling rather than rising. Convergence in the industries is leading to the increasing inter-relation and interdependence of computing, communications and the media. This is also profoundly changing the structure and dynamics of the IT industries. 12 Change in the IT industries and their capacity is driving change in the use of e-commerce while the IT industries are also being driven by changes in e-commerce usage. 3.1 The IT industries Data reported in the report Spectator or Serious Player? indicated that Australia’s information industries generated $66–69 billion of market revenues in 1995. That is some 7.5 per cent of turnover in the Australian economy. Figure 3.1 Australia’s information industries—market revenues (A$ billion) Notes: 4.9 ± 0.6 ~0.6 imbedded -1.6 imports components and assemblies Exports 2.7 public network platforms 18.4 voice Source: The Allen Consulting Group, Spectator or Serious Player?, p. 9. 2.4 consumer electronics voice CPE data CPE office equip, paging, fax computers and printers packaged systems s/w 1.9 0.9 1.1 1.1 Sector Electronics IT&T platforms and peripherals 5.6 2.3 3.1 0.3 data, ISP, pay TV access directories, engineering 18.9 3.4 2.1 13.1 9.6 ± 0.4 ~0.4 13.1 ~0.2 Telecomms carriage & services 2 13.1 13.1 IT services s/w, h/w maintenance traded IT services, inc processing non-traded IT professional services 15.7 ± 1.1 0.4 1. Defined as markets that are now exposed to the digital convergence phenomenon. Total revenues are estimated to have been A$67.5 ± 2.1 billion in 1995. 2. Telstra earned another $0.3 billion from offshore ventures. The IT industries extend through a value chain including electronics (approximately $5 billion) to computing and telecommunications platforms, office equipment and consumer electronics ($18 billion), telecommunications carriage and services ($19 billion), IT services (approximately $10 billion) and to information and entertainment services (approximately $18 billion). These estimates include some ~4.0 7.8 0.7 ~2.8 Information & entertainment services expenditure on direct marketing (inc. collateral) advertising and subscriptions • FTA radio • FTA TV • pay TV content • online content • print media • print classifieds public broadcasting music, video, film, games, CD-ROM 1995/96 rate of revenue growth 15% 10% 16% 18% 10% Av=13% 12 See Houghton, J., Pucar, M., Knox, C., Mapping The Information Industries, Staff Information Paper, Productivity Commission, AGPS, Canberra, July 1996. 101
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© Commonwealth of Australia 2000 I
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Table of contents Foreword ........
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Part 2 - Case studies Section One I
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Executive summary E-commerce is sti
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Part 1— economic analysis
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Chapter One Study context, aims and
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Within the business-to-business cat
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Table 1.4 Projected growth in econo
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Chapter Two Economic issues What di
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Exhibit 2.1 Disintermediation effec
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Table 2.1 E-commerce impact on vari
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Chapter Three Changes ahead—indus
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Health Significant efficiencies sta
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Chapter Four Economy-wide assessmen
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Direct changes and flow on impacts
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consumption relative to economic ac
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External competitiveness Greater us
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Industry outcomes Greater use of e-
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Food products The food products sec
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people with differing occupational
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Tasmania and the Northern Territory
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Table 4.2 Regional growth and emplo
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The data for country regions (Exhib
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impacts are a reasonable representa
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Chapter Six Policy implications and
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Appendix A Study methodology, shock
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confidence. This is at the expense
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All of the GDP gain generated by ch
Page 61 and 62: (s11) Saving of particular inputs I
Page 63 and 64: Table A.1 continued Commodity Per c
Page 65 and 66: Table A.2 continued Engine & Boiler
Page 67 and 68: Table A.2 continued Safety Inspecto
Page 69 and 70: Table A.3 continued Industries 2007
Page 71 and 72: B.2 The structure of MONASH The cor
Page 73 and 74: simulations it is assumed that the
Page 75 and 76: Table B.1 (Continued) MONASH-RR Reg
Page 77 and 78: C.2 Forecasts for macroeconomic var
Page 79 and 80: other grains, iron and non-iron ore
Page 81 and 82: The numbers in column (II) of Table
Page 83 and 84: Productivity growth over the histor
Page 85 and 86: forecast of a 0.1 per cent decline
Page 87 and 88: Productivity growth in the construc
Page 89 and 90: Employment prospects in the sector
Page 91 and 92: Table D.1 continued Textiles, cloth
Page 93 and 94: Table D.1 continued Health, educati
Page 95 and 96: Table D.2 continued 45 Bags and Con
Page 97: Part 2 — case studies
Page 100 and 101: Industry sectors’ use of e-commer
Page 102 and 103: e-commerce were chosen. Key questio
Page 104 and 105: Banking For some time now most of t
Page 106 and 107: 2.3 Cost savings Banks are keen to
Page 108 and 109: 2.5 Changing business modes Branch
Page 110 and 111: Banks are also looking to take adva
Page 114 and 115: activities such as consumer electro
Page 116 and 117: Box 3.2 Building a business on e-co
Page 118 and 119: One of the issues for all industrie
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Page 122 and 123: Box 4.2 Australia Post and e-commer
Page 124 and 125: Opportunities are being created for
Page 126 and 127: Value can be transferred into Austr
Page 128 and 129: Continued use of email and the deve
Page 130 and 131: E-commerce allows some flexibility
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Page 134 and 135: are introduced to market at a start
Page 136 and 137: educe the duplication of assessment
Page 138 and 139: 6.3 Cost savings as a result of ele
Page 140 and 141: The primary e-commerce tools for im
Page 142 and 143: New service modes and channels to t
Page 144 and 145: 132
Page 146 and 147: This Section will review the implic
Page 148 and 149: of greater depth. (It should be not
Page 150 and 151: consumers watch five per cent less
Page 152 and 153: artist is the promotion which airpl
Page 154 and 155: New costs The fragmentation and reg
Page 156 and 157: gambled. The development of Interne
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Page 160 and 161: Making a purchase over the Internet
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Customers who access troubleshootin
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they does not actually sell those i
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Key points There are few other sect
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e-commerce allows quicker order pro
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9.3 New costs The demand for busine
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How a ticket is sold, through an ag
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Box 10.1 Case study: E-commerce and
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The education and training sector h
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166
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11.2 Production Manufacturing busin
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Opportunities for re-intermediation
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Value could transfer within the sec
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174
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years’ time. 30 This reflects an
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seeks to provide a point of referen
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To a small extent, direct selling t
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Box 13.1 Austmine—a window for th
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Box 13.2 Leaving mining sites for w
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