Insights Blog

Will digital disruption be as powerful as political instruction?

Will digital disruption be as powerful as political instruction?

23 May 2017, by Lakshmi West

There is much talk about the digital avalanche about to hit with the electrification race, automation, autonomous vehicles, 3D printing, super computers and electronic digitisation. But how ready are we to be part of that in Australia? Australia has had 30 years of small government politics directing the pathway to a free market service industry economy. In stark contrast, China in 30 years has transformed from an agricultural society into a manufacturing and digital economy. Mao Zedong established state-owned enterprises, supported by preferential low interest loans initially to maintain social stability. The basic tenet of Mao Communism has metamorphosed into an advanced 15-year planned commonwealth of future strategies and state policy.

The Chinese method of political instruction has transformed it into the world’s fastest growing economy via a policy of active government directing pathways into the future, with stewardship of select state sponsored and partial shareholdings.

China is not the only active government economy to utilise future planning policies. Norway has led the way with active government participation and shareholdings such as Statoil, which uses this profit-making, state-owned resource to support a sovereign wealth fund designed to develop future education and digital skills and competitiveness.

The USA were the initial leaders of technology and software development but have not been able to compete with China on the manufacturing front, which has benefited from continual government support for the metallurgical, manufacturing, technology and now service sectors. There has been acknowledgement of this with the Obama plan.

The Chinese service sector has embraced online shopping, mostly serviced by Alibaba, which has the majority of the country’s US$378 billion e-commerce business in terms of market share. According to a recent report, Amazon holds less than 1% of market share in China.

India is now setting a pace to compete with the US on software development and has an ambitious plan to phase out all petrol and diesel usage by 2032 and compete with China in the electrification race.

What we are seeing now are new digital competitors competing with traditional corporations and governments in all industries. Google, Apple, Microsoft, Tesla and Amazon control markets that are affecting the Australian economy, dictating how we do business, the software we use and how we raise revenue. Even our tax base with internet shopping has created quandaries that we must address by looking ahead of the disruption.

What part will Australia play in this new world? How will Australian universities facilitate the skills required to be agile and meet the challenges? What are the challenges? Is digital disruption just utilising new technologies and platforms of change?

Real disruption has evolved to be considered as an ongoing continuum of global dynamics and we need to work with this by providing optimum digital customer service. Ensuring optimum service will mean utilising the constraints of time, finance, software/hardware resources and skilled ICT professionals to provide the highest quality digital experience to end customers. At The Australian National University, this translates to digitalisation projects being driven and delivered by a business and customer-focused group outside the traditional IT domain (but interacting directly with IT for service provision), which aims at providing Optimum Service Solutions (OSS) to customers.

OSS at ANU requires a comprehensive understanding of and working with the University’s future strategic directions policy and analysing possible disruption and technology change levers to provide its customers (academic/professional staff and students) with an optimised digital platform to reap the benefits of digitalisation.

There is greater realisation now that leadership by planned policy and instruction will work better than uncontrolled disruption. We will need to work to our strengths and be part of and create value chains with education, now an essential part of Australia’s export economy.

For the importance to the national and also Canberra’s ongoing economy it is vital that the education sector remains attractive to domestic and foreign students. A recent ABS report has stated that the real value of the education industry is closer to AU$21 billion per annum.

To put this into perspective, the OECD in a 2012 report stated that China will account for 29 per cent of all the university graduates in the world aged 25–34. In global population terms that will mean there will be as many Chinese graduates in that age group as in the entire US labour force. These growth predictions are similar for India. Australia needs to capitalise on our opportunities in offering superior education and lifestyle choices.

As with India wanting to compete with China and The USA in the electrification race, Canberra positioning itself as a renewable energy hub and fostering opportunities such as low-energy data centres provides an ideal platform for universities in particular to harness disruption with good policy and to provide optimised customer service and reap the rewards.

Creating an education platform that meets the nation’s needs will depend on the plans put forward not only by the leadership of institutions such as ANU themselves but the strategies developed by Federal and State Governments to assist with strategic policy direction. Universities will then need to follow those strategic directions and incorporate relevant disruptions. The relative success of policy instruction will be measured by the harvest of overall societal satisfaction and community wellbeing.

Sources:

1. Canrong, J. (n.d.) How America’s relationship with China changed under Obama. Retrieved May 20, 2017, from https://www.weforum.org/agenda/2016/12/america-china-relationship/
2. IResearch Global (2017, February 14). China’s Online Shopping GMV Approached 5 Trillion Yuan in 2016. Retrieved May 20, 2017, from http://iresearchchina.com/content/details7_30708.html
3. Colbeck, R. (2016, April 29). Australia's international education sector worth more than previously estimated. Retrieved May 20, 2017, from https://ministers.education.gov.au/colbeck/australias-international-education-sector-worth-more-previously-estimated
4. OECD (2012) Education Indicators in Focus. http://www.oecd.org/ edu/50495363.pdf
 

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Lakshmi West is Director, Service Improvement Group, Australian National University and a member of the Steering Committee at the 2017 Service Improvement and Innovation in Universities Conference.

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