Digital trade to grow 5-fold to reach A$192 billion by 2030 in Australia
Published 10 October 2018 | 4 minute read
The Export Council of Australia and the Hinrich Foundation released the Australia report on 10 October 2018, entitled “From Resource Boom to Digital Boom: Capturing Australia’s digital trade opportunity at home and abroad.”
The digital economy and the so-called 4th industrial revolution holds enormous promise for Australia’s future prosperity as the economy is set to benefit from digital trade, which is forecast to grow more than five-fold to reach A$192 billion by 2030.
In 2017, the economic value of digital trade-enabled productivity benefits to the Australian economy is estimated to be worth A$43 billion, according to a report, titled “From Resources Boom To Digital Boom: Capturing Australia’s Digital Trade Opportunity At Home And Abroad”, published by the Hinrich Foundation.
At the same time, the export value of virtual goods and services enabled by the digital economy, such as e-commerce, accounts for A$6 billion in 2017 and this is estimated to grow by 210 percent to reach A$19 billion by 2030, the report added.
Digital trade covers the production, distribution, marketing, sale or delivery of goods and services – domestically and abroad – supported by cross-border data flows.
Digital trade will enable Australian firms to achieve cost efficiencies, enter new markets and generate richer insights with the help of data. It supports collaboration, enables the adoption of efficient business practices and supports the management of global supply chains.
Given Australia’s economic prominence in the region, there is a strong opportunity for the Australian Government to show leadership by seeking balanced digital trade rules in bilateral and multilateral trade agreements across the region, and unlocking billions of dollars of economic value for Australian companies.
However, Australia’s strong track record of economic success is no guarantee that it will realize this potential. Understanding the cross-cutting role of digital trade in both the domestic economy and export markets, and optimizing the regulatory environment is crucial if Australia is to realize new sources of growth and continue the improvements in standards of living achieved over the 27 years since Australia’s most recent recession.
In order to realize the full potential of digital trade, policymakers will need to protect the privacy of citizens and safeguard them from inappropriate content. This can be addressed by implementing Cross-Border Privacy Rules (CBPR) and Privacy Recognition for Processors (PRP) systems, as recommended at the Asia-Pacific Economic Cooperation (APEC) forum. These forms of privacy protections are solutions that allow cross-border data flows while safeguarding privacy through interoperable enforcement mechanisms, providing an ideal international policy framework.
Also, the policymakers will have to enable rapid access to data for law enforcement and safeguard national security as well as security of users. Australia could explore discussions with the United States under the CLOUD Act, which authorizes providers to disclose communications content pursuant to a lawful order from a foreign government that has entered into an executive agreement with the United States.
An area of greater concern for Australia’s policymakers is in regard to copyright legislation that imposes higher risks of a liability than equivalent laws overseas, potentially creating an uneven playing field with overseas competitors and impeding competition by smaller firms.
The Australian policymakers will need to build flexibility into copyright and intermediary liability regulations, ensure open data flow and interoperability and minimize border frictions.
Learn more about the Hinrich Foundation's digital trade research project here.