Big benefits to come from e-commerce in Australia

Canberra, Feb 11 (Asia Pulse) - Widespread take-up of e-commerce could add 2.7 per cent to Australia's GDP, push wages up by three per cent and cut prices by up to 20 per cent over 10 years, a new report has found.

World-first research by the National Office for the Information Economy into the economic impacts of electronic commerce found while it would not boost all industries, the benefits exceeded the costs. E-commerce would free up resources and increase productivity, boosting consumption by $A10 billion ($US6.29 billion), increasing employment and fuelling the tourism and leisure industries.

The direct impacts of widespread e-commerce use would add 1.6 per cent to GDP by 2007 but output would increase by 2.7 per cent, or $A14 billion ($US8.8 billion) per annum, including flow-on effects. The report, released today, tipped Internet-based commerce in Australia to grow from $A61 million ($US38.36 million) in 1997 to $A1.3 billion ($US817.57 million) next year.

The main beneficiaries of the boom would be entertainment, transport and communication, with flow-on effects to banking, health and education. But shops would suffer as buyers made increasing use of the Internet, slashing average retail margins by up to 20 per cent. "Books are viewed as being particularly susceptible to this impact and so margins in that industry fall by 30 per cent," the report said. Export-oriented sectors such as mining, manufacturing and agriculture would also fall off due to a higher Aussie dollar.

The balance of trade was expected to deteriorate initially but recover as Australia earned higher unit prices on a smaller export volume closer to 2007, the end point of the 10-year study. Wages would rise by up to three per cent because of increased efficiency and employment would increase by about 0.5 per cent overall. Jobs growth would be concentrated in entertainment, tourism, hospitality, building, communication trades, and health, while retail, textiles, clothing and footwear, banking and printing would shed jobs.