The International Institute for Management Development has released its Digital Competitiveness Ranking for 2021 and the results are sobering. Australia continues to slide in its digital competitiveness, now 20th out of 64 nations, down from 15 last year. This is the third straight year of decline in rankings for Australia. Only Poland and Bulgaria recorded bigger falls in their digital competitiveness over the past year.
What is most worrying is that one of our worst-performing areas is future readiness. The IMD notes that leading economies sustain their competitiveness through their performance in future readiness, including by remaining adaptive and agile. Yet we ranked 55 in business agility in 2021, down 12 places over the year. Countries that outperform us in this area include Botswana, Turkey, Argentina and Greece.
Over the past year much has been made of the rapid expansion of digital technologies and their use in Australia. While these investments helped many businesses to survive and some to thrive, the fact is we are failing to keep up.
Leading nations in this year’s results not surprisingly outperformed in terms of talent including training and education. In contrast, Australia recorded significant falls in these areas, ranking just 45 in international experience, 44 in digital and technology skills and 58 in employee training.
Skills, particularly those that are tech, digital and data related, are in very short supply.
COVID had a hand in this, impacting the capacity of business to train staff, and with closed international borders limiting access to international experience and skills. We were not alone in this – Singapore which has also seen a reduction in its international talent due to the COVID-19 pandemic, fell from second place in the rankings to fifth – but there is little comfort in that.
Anyone talking to business leaders at the moment knows that skills, particularly those that are tech, digital and data related, are in very short supply. As an immediate priority we need a plan to enable the return of pre-pandemic levels of skilled migration to help business access key skills and to drive further innovation and growth.
Research by IMD on business responses through the pandemic found that only one in five businesses surveyed in Australia successfully enabled the training of their employees in new technologies or facilitated the redeployment of existing skills. For its part, the Committee for Economic Development of Australia is undertaking research to understand the dynamic capabilities of Australian businesses and management.
These digital competitiveness results must serve as a wake-up call. They certainly provide clear indications of where we must focus our efforts if we are to achieve the federal government’s aspiration to be a leading digital nation by 2030.
Melinda Cilento is chief executive of CEDA, the Committee for Economic Development of Australia and a former Commissioner of the Productivity Commission.