Enterprises are sitting by the sidelines with a "wait and see" attitude when it comes to taking advantage of Australia's growing digital economy, while startups using tomorrow's technology are walking all over them, according to research conducted by the National Institute of Economic and Industry Research (NIEIR) for IBM.
The report compares the leaders — those that prepare for the digital economy of 2025 — against the laggards — those that continue as they are — across a number of industry sectors.
In the retail sector, for example, the report claims that those taking steps to prepare will be worth AU$78 billion, while those that do not will be worth just AU$1.5 billion.
IBM Australia and New Zealand managing director Andrew Stevens said that it isn't about waiting for the right technology.
"It's not an issue of the technology, because the technologies exist. It's about the application of technologies," he said.
"Take those technologies, and apply them in a way that leads to rapid GDP per capita increase — that's the opportunity that we have, but it's not about technology. It's about leadership and vision.
"Those that can adapt and in fact lead the adaptation are basically assured of their success, while those that don't obviously reap the consequences."
Although they weren't the main focus of the study, startups were praised for the way they are approaching the digital economy.
NIEIR executive director Peter Brain said that startups are already changing their businesses at the cost of financial services' success.
"New startups are using cloud computing, big databases, and mobile devices to move money transactions away from those coins and bank transfers to computer transactions largely contained within a single computer network, which are aggregated to minimise traditional finance transaction costs. This will slash the transaction prices currently enjoyed by the finance sector."
He also said that startups were using big data analysis to even conduct credit checks with the same or improved accuracy, stealing even more market share from traditional players.
For the finance sector, the cost of competing with startups is harsh. Brain said that the industry will need to cut interest rate margins by 50 percent, and cut real transaction costs by 40 percent, even though they have been experiencing 20 percent growth in the the past two decades.
In order to do this, Brain said that leading enterprises will have to double the core competencies, reduce their contact points with customers by 30 percent, and increase revenue by threefold.
Brain further said that investors have also begun to realise that it's a safer bet to take a more direct investment in new startups that are already involved in taking advantage of the digital economy.
"They actually think that that is a much lower risk outcome, and this sort of thing is growing rapidly," he said.