Boffins deflate digital economy bubble with hard economic data
Google says digital economy worth AU$79bn to Australia, hard science scores $145bn
Australians are getting their regular consultant-driven exhortation to ride the “digital economy” horse to wealth and prosperity, even though it turns out that for every digitally disruptive dollar that flows from the fingers of keyboard warriors, two dollars escapes the science lab into the economy.
We're working with a few sources here, starting with Google, whose semi-regular report by Deloitte – the last was in 2011 – has been dipped in chocolate and wrapped in gold.
“The digitally-enabled economy contributed AU$79 billion to GDP in 2013-2014” writes Google Australia MD Maile Carnegie, following up with the gushing claim that the sector “has grown by a whopping 50 per cent since 2011”.
That latter claim needs to be filed somewhere “handle with caution” and “don't believe the hype”, since Deloitte itself makes this following unequivocal statement in the report:
“In this report we expand and update our analysis of the internet in the 2011 report to the digital economy as a whole in 2015” (emphasis added).
In other words, Deloitte has revised the report's inclusions and its methodologies since 2011, and – importantly – hasn't told readers how much impact that has on the report outcomes.
And here's a blow to the electronic-ego: science has you beat and beat badly.
While the imitation Ubers and AirBNB wannabees want the kid gloves of government subsidy and special tax treatment handed out with the old-boy ties, science turns out to be worth between double and triple the best the bit-barn-brotherhood has to offer.
If you take the conservative estimate put out by the Office of the Chief Scientist and the Australian Academy of Science in this report, hard science in this country comes close to the digital economy in export activity alone.
The Importance of Advanced Physical and Mathematical Sciences to the Australian Economy, prepared by the Centre for International Economics, puts the export value of science at $AU74 billion annually and "estimates that the direct contribution of the advanced physical and mathematical sciences is equal to 11% of the Australian economy (that is, about $145 billion per year).
That report, which borrows its methodologies from those used in the US and Europe (to be fair, Deloitte probably uses its methodologies more than once as well), says the direct contribution of science to the economy is $AU149 billion and its employment contribution (direct and indirect) is close to 800,000 jobs.
Since the science report includes extensive citations from Deloitte, Vulture South presumes the bean counters aren't about to tell us it uses a bad methodology … ®