Digital economy removes tyranny of distance

Australia suffers due to the tyranny of distance when doing business. Nick Stanley believes it is time to play to our competitive advance by embracing the internet and digital age.

The Australian Economy is subject to a competitive disadvantage that we need to take into account and factor in to our national growth strategy.

If I was running Australia as a business I would be painfully aware of economies of scale and how that scale compares with our trading partners and competitors. Many other developed nations have large economies comprised of significant populations across which to spread the cost of production.  This then leads to a lower per unit cost to get products to market.

In Australia, we need to ship our products overseas in order to access economies of scale.  This then puts us at a disadvantage as the cost of shipping inflates our product cost before we are able to spread the production cost.

Solution: subsidise the production cost.  However, a market that needs a subsidy to survive is not a competitive market.  It’s not a business you want to be in and it’s a very slippery slope.

Australia suffers due to this Tyranny of Distance.

Our opportunities as a nation rest in our observation of this tyranny of distance and the way we work with that.

Whilst we know the costs to produce physical goods are higher for us, the internet and the digital age presents us with an exciting new opportunity to be competitive in an environment where the tyranny of distance does not pervade.

The “Internet of Things” creates a flatter World and a closer working environment regardless of physical distance.  What’s more, Australia IS a smart country, a developed country with acutely developed social responsibility, world class education brands and a range of smarts that mean we can be leaders in this digital market place.

Our advantage, then, is in the creation of digital and intellectual capital.  So let’s play to our competitive advantages.

Part of the transformation of our economy from a reliance on manufacturing and physical export needs to be greater Government investment in the knowledge economy.

Unfortunately initiatives such as the Entrepreneurs Infrastructure Program, which effectively cuts the funding available to early stage commercialisation opportunities in half when compared with the previous Commercialisation Australia program, are discouraging as they limit transformation in this very important area.

The opportunity is now to embark on a transformation exercise that will pave the way for future growth in the Knowledge Economy.  Key policies must encourage startups, entrepreneurs and innovation.

Geelong presents a microcosm of what is happening on a national scale and allows us to implement strategies that truly transform to a Knowledge-Based economy on a scale that is controllable and adjustable.  It remains to be seen if the Government will respond accordingly and back this exciting growth opportunity with appropriate policies and incentives but we wait with baited breath!

Nick Stanley is a digital entrepreneur with a track record in Engineering, Education and web/cloud-based technologies.  Both a successful founder (Sky Software, PEPi Systems and CARBONcontrol) and angel investor (recent investments being Fysho.com and PunditConnect), Nick is passionate about the digital revolution in Australia and our growing emergence as a superpower in the global Knowledge Economy.  Nick lives in Geelong with his wife and three children and is an avid supporter of the Geelong Cats and Geelong in general!