Академический Документы
Профессиональный Документы
Культура Документы
Jim Minifie
Grattan Institute Support
This discussion paper was written by Jim Minifie, Grattan Institute Productivity
Founding members Program support
Growth Program Director. James Button provided editorial assistance.
Higher Education Program
This paper is part of Spreading Smart Ideas, a series
Grattan Institute is conducting, in partnership with
Google, to assess and promote the diffusion of
innovations through the economy. Grattan would like to thank Google for its
support of the Spreading Smart Ideas series.
Online innovations including mobile devices, e-commerce, and Workshop participants agreed that government and industry can
cloud computing offer opportunities for firms of all sizes to remove obstacles to the use of cloud computing and help SMEs
become far more productive. capture its benefits. The industry itself should lead the education
of SMEs on the case for cloud computing. Yet government can:
This paper explores issues raised at a workshop run by Grattan
Institute and Google on how policymakers and business can Choose policy settings that promote broader productivity
accelerate the spread of cloud computing among SMEs. It uses growth and innovation;
cloud computing the delivery of on-demand information
technology services over the Internet as a case study for how Ensure interaction with government over the internet is the
online technologies can benefit smaller firms. default for all businesses;
Cloud computing can help level the playing field for smaller firms. Provide an appropriate policy environment for investment in
It allows them to access sophisticated IT services that were broadband networks that meet the needs of small business.
previously out of reach. For example, it can allow them to manage
and monitor their sales, operations and finances in real time. Information technologys contribution to productivity is just getting
started. Small and medium enterprises should get on board.
The cloud also offers capabilities that were previously unavailable
Overview ............................................................................................ 1!
3
Dodgson and Gann (2010).
4
See Daley (2013); Cutler & Company (2008), p.20; Guellec and Van
Pottelsberghe de la Potterie (2001).
1 5
DArcy (2012). Parente and Prescott (1999a); Parente and Prescott (1999b).
2 6
Harris (2013). Comin and Hobijn (2010).
Trade openness is a major driver of productivity growth. Trade Studies that focus on the Internet give a sense of the size of the
permits firms to specialise and achieve scale economies, and ICT sector, though not estimates of its contribution to productivity
trade competition knocks out low performers, increasing average growth. One estimated that the Internet contributes about 3.4 per
productivity. cent of GDP in advanced economies.16 An Australian study found
Of about 2.1 million firms in Australia, only about 6,000 had more
than 200 employees in 2011. Of the rest, just 80,000 firms had
more than 20 employees. More than 700,000 firms employed
between 1 and 19 employees; and around 1.3 million had no
employees at all.
17 19
Deloitte (2011). Rogers (1998); OECD (2012) Chapter 4.
18 20
Connolly, et al. (2012) provides an overview of Australian small business. Rogers (1998).
21
Shares stated are for private sector, non-financial employment and GDP. ABS (2013).
Cloud infrastructure: data centres with hardware and software While most customers use only the final software services sold by
that are powerful and flexible enough to support large-scale cloud computing providers, the underlying platforms and
delivery of sophisticated services. 22
Microsoft (2010).
23
Mell and Grance (2011).
The term platform describes the tools used to develop and Scalability is the key characteristic.
provide cloud services. Examples of platforms include databases,
code libraries, development and test environments, and server The Cloud is a jargon term if you use Webmail, twitter,
configuration tools. Providers include IBM, Windows Azure, ecommerce, you are a Cloud user.
Amazon Elastic Compute, and Google Cloud Platform and others.
Source: Workshop discussion.
24
Some analysts see these terms as becoming less descriptive as services
increasingly overlap (eg, KPMG (2013a); Armbrust, et al. (2009)).
The cloud is more flexible than traditional IT. Firms can buy Across the Australian economy, cost savings from widespread
what they need, when they need it. cloud adoption could add between $2 and $3 billion to GDP, or
between 0.15 and 0.2 of a percentage point of GDP.29
The cloud can be cheaper than traditional IT. The ability of
providers to make services available with relatively low set-up Other advantages of the cloud, such as flexibility, multi-site
costs brings many services within reach of small and medium access and the end of redundant systems, are more difficult to
firms for the first time. For SMEs, in particular, the cloud can quantify in dollars, but are likely to be larger than the cost savings
alleviate capital constraints and the lack of technical alone. The few studies that quantify the value of increased
expertise.27 flexibility and new business creation deriving from the cloud
estimate benefits of more than 1 per cent of GDP in the European
The cloud adds capabilities beyond what is possible with Union.30
traditional IT. These include access from mobile devices, and
multi-user creation and editing. The cloud also makes it easier
for a firm to standardise and update processes across multiple
locations and business units.
The cloud offers a different and often lower risk profile than
traditional IT. For example, large cloud providers operate
robust and redundant systems with multiple levels of data
28
KPMG (2013b); Dean and Saleh (2009).
29
Based on 75% cloud adoption for relevant IT services, with operating expense
25
Etro (2011); see OECD (2013a) for a discussion of studies on ICT as a reduction of 25 per cent and capital expenditure reduction of 50 per cent (KPMG
general purpose technology. (2012)).
26 30
Australian Computer Society (2013b) offers a related set of advantages. Centre for Economics and Business Research Ltd (2010); Etro (2009), Etro
27
Michael (2013). (2011).
Figure 1 summarises the main reasons given by Australian SMEs W orkshop observations: SME benefits of the cloud
for using the cloud.
Cloud permits SMEs to focus on their core business. Its not a
Figure 1: Reasons cited by SMEs for using the Cloud solution to a specific problem.
Per cent for
Reason citing reason
using cloud services
Cloud permits SMEs to get smaller in order to get bigger.
So I don't have to install software
35
The Economist (2014).
Australias cloud opportunity is likely to be shared by other W orkshop observations: Australias opportunity
developed economies. While Australias industry mix is different,
with a lower manufacturing and higher resources share of GDP The organic evolution towards the cloud is going to happen. The
than most), our services share is similar to our peers. Australia question is really: which propositions will accelerate the
appears to be well positioned for cloud adoption on some evolution?
dimensions but not on others.
Source: Workshop discussion.
Australias stable and open economy, reliable utility services, a
skilled workforce with provision for skilled immigration, and
independent courts and robust regulatory institutions tend to make
Australia attractive for hosting cloud infrastructure.36 They will also
tend to make cloud services more attractive to customers.
36
McKinnar and Kathage (2014).
37
Asia Cloud Computing Association (2012).
38 39
OECD (2013b), pp165-66. Bilbao-Osorio, et al. (2013).
SMEs cite five main constraints to adoption of low-cost, flexible Network quality: slow or unreliable network connections can offset
computing solutions: knowledge and awareness; setup and any advantages of cloud services.48
transition costs; concern about lock-in and data extraction; privacy
and security; and network quality.43 Knowledge, awareness and skills appear to be the major barriers.
As awareness increases, comfort with cloud computing appears
Knowledge and awareness: many managers do not know what to increase. For example, 23 per cent of SMEs who say they use
the term cloud computing means, and are not aware that it may cloud services report that they do so in part because they data is
offer business advantages.44 One 2011 survey found that 59 per better protected and safer online via one or more servers rather
cent of SMEs were unaware of or unsure of cloud computing.45 than via my own server.49
It can take 3-5 years from getting on the web to really innovating
your business to take advantage of what the cloud can offer.
Should policymakers also seek to address barriers to adoption? The question for private sector intermediaries is: why cant you
Where current government policy settings influence adoption and provide what is needed? Only then can we define a role for
where they could be adjusted at low cost, there is a case for government.
policy change.52 Government can influence cloud adoption
through a number of routes: Dont expect trust in the cloud to emerge completely without
government involvement. What makes banks trustworthy?
Government set-up and masses of regulation.
Ensure interaction with government over the internet is the Government should recognise that deregulation in itself may not
default for all businesses; provide significant support to the use of the cloud by SMEs.
Workshop participants did not identify any major regulatory
Review regulation for opportunities to support the use of cloud barriers to SMEs use of cloud computing.
services;
4.2 Awareness and skills
Provide an appropriate policy environment for investment in
broadband networks that meet the needs of small business. Improving SMEs awareness of the cloud opportunity and
improving their skills can help speed adoption. The cloud
4.1 The broader policy context industry is better positioned than government to make the
business case to SMEs, improve awareness of the opportunity
Governments broad policy settings should seek to increase and to help SMEs acquire the relevant skills.
openness and competition to drive productivity growth and
innovation. Government should not attempt to create national Government should allow the private sector, including providers,
champions, favour local providers, or protect industries from industry associations, consumer advocacy bodies and brokers, to
competition. lead in engaging with SMEs on the value of the cloud. The
commitment of the previous government to work with
Government should take this focus into the wide set of reviews it intermediaries may be a low-cost way of monitoring the
has established. Many of these reviews extend well beyond development of the cloud industry and promoting informed
technology and small business, but a common theme is a
57
Australian Computer Society (2013a).
53 58
Government of Australia (2013). Ibid.. Australian Industry Group (2013) and others argued that the case for the
54
Liberal-National Coalition (2013). adoption of an industry-wide Cloud Protocol was not strong at present.
55 59
Government of Australia (2013); Australian Government Information Government of Australia (2013).
60
Management Office (2013). Australian Communications and Media Authority (2013).
56 61
Australian Government Information Management Office (2013) Government of Australia (2014).
62
Government of Australia (2012); Government of Australia (2013); Liberal-
National Coalition (2013).
Bilbao-Osorio, B., Dutta, S. and Lanvin, B., Eds., (2013) The Global Information Daley, J. (2013) Australian government spending on innovation, Grattan Institute
Dodgson, M. and Gann, D. (2010) Innovation: A Very Short Introduction, Oxford IDC (2013b) Australia IT Services 2012-2017 Forecast and Analysis,
University Press, Oxford Jorgenson, D. W. and Vu, K. (2007) 'Information Technology and the World
Etro, F. (2009) 'The Economic Consequences of the Diffusion of Cloud Growth Resurgence', German Economic Review, 8(2), p 125-145
Computing', in The Global Information Technology Report 2009-2010, Kimber, J. D. and Mason, C. M. Australian Centre for Broadband Innovation,
W. E. Forum, Ed. CSIRO Digital Productivity and Services Flagship (2013) Internet use
by small business: An exploratory study in regional Australia, CSIRO
Etro, F. (2011) 'The Economics of Cloud Computing', The IUP Journal of
Managerial Economics, IX(2), p 1-16 KPMG (2012) Modelling the Economic Impact of Cloud Computing, for The
Gordon, R. J. (2012) Is U.S. Economic Growth Over? Faltering Innovation Australian Information Industry Association,
Confronts the Six Headwinds, National Bureau of Economic Research, KPMG (2013a) Breaking through the cloud adoption barriers,
Inc, NBER Working Papers: 18315
KPMG (2013b) The cloud takes shape,
Government of Australia Department of Broadband, Communications and the
Digital Economy (2012) Cloud + NBN Forum: Report of Proceedings, Liberal-National Coalition (2013) The Coalitions Policy for E-Government and
the Digital Economy,
Government of Australia (2013) National Cloud Computing Strategy, Department
of Broadband, Communications and the Digital Economy Lileeva, A. and Trefler, D. (2010) 'Improved Access to Foreign Markets Raises
Plant-Level Productivity . . . For Some Plants', Quarterly Journal of
Government of Australia Department of Communications (2014) Cloud Economics, 125(3), p 1051-1099
Computing Regulatory Stock Take,
Manyika, J. and Roxburgh, C. (2011) The great transformer: The impact of the
Gretton, P., Gali, J. and Parham, D. (2003) The effects of ICTs and Internet on economic growth and prosperity, MckKinsey Global Institute
complementary innovations on Australian productivity growth,
Productivity Commission Mariotti, S., Nicolini, M. and Piscitello, L. (2013) 'Vertical Linkages between
Foreign MNEs in Service Sectors and Local Manufacturing Firms',
Guellec, D. and Van Pottelsberghe de la Potterie, B. (2001) 'R&D and Structural Change and Economic Dynamics, 25, p 133-145
Productivity Growth: Panel Data Analysis of 16 OECD Countries',
OECD Economic Studies, 33(2001/11), p 103-126 McKinnar, E. and Kathage, T. (2014) Cloud Computing Services in Australia,
Research note, Austrade and the Department of Communications
Harris, P. (2013) 'Observations on Productivity, National Income and the
Demographic Outlook', Australian Institute of Company Directors, Mell, P. and Grance, T. (2011) The NIST Definition of Cloud Computing, National