Enabling services in the wider economy Heather Cotching Manager, Economic and Business Conditions Section Industry Economics Branch Office of the Chief Economist 15 September 2015 Industry Innovation W orkshop 2015 15 Septem ber industry.gov.au/
Enabling services in the wider economy Heather Cotching Manager, Economic and Business Conditions Section Industry Economics Branch Office of the Chief.
Jan 18, 2016
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Enabling servicesin the wider economy
Heather CotchingManager, Economic and Business Conditions Section
Industry Economics BranchOffice of the Chief Economist15 September 2015
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Why look at enabling services?
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Services industries, gross value added(per cent of GDP), 1992–2014
Source: ABS 5206.0 (Mar 2015)
Services sector has significant growth potential
• Services expandingpost-mining boom
• Strong productivity growth
• Positive GDP growth
Their ‘enabling’ function lies in the fact that without these services, firms would not be able to produce goods or services to sell to the market economy 19
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140.0
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Services Mining Manufacturing
Per
cen
t of
GD
P
Conceptual definition of enabling services
Enabling services are those that primarily providebusiness-to-business services
Focused not on WHAT they produce, but WHO they produceit for.
Using ABS I-O Input-Output (IO) tables to identify Enabling Services at the ANZSIC class level.
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
New ANZSIC grouping:
Coverage — breadth of provision
Focus — proportionof intermediate inputs
ICT & the Digital Economy
Professional & Support Services
Trade, Transport & Logistics
Utilities
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Conceptual definition of Enabling Services
Enabling services arelarge, growing quickly, and productive
Enabling Services are
Source: Department of Industry and Science (2015)
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Enabling Services, GVA as a percentageof All Industries’ GVA, 2004–2014
Significant in size
• Output (GVA) 31 per centof GDP
• Employed 27 per centof workers
Have grown faster than other industries in the economy
• 3.3 per cent annualisedoutput growth vs 2.9per cent for All Industries
• Output/hour was $83.3/hrvs $69.8/hr for All Industries
2004200520062007200820092010201120122013201430
32
34
36
Per
cen
t
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Performance of enabling services varies across groups
Source: Department of Industry and Science (2015)
Enabling Services: GVA, annualised output growth, output / hour 2014
Enabling Services
Output (per cent of GDP),
2014
Annualised output growth
(per cent),2004–2014
Labour productivity
(output / hour), 2014
ICT & the Digital Economy
2.2 3.7 72.2
Professional & Support Services
19.8 3.7 88.4
Trade, Transport & Logistics
5.2 2.7 63.7
Utilities 1.7 1.3 156.7
All Industries 85.1 2.9 69.9
Professional services is the strongest performer, with significant variance between the four groups
Bolstering enabling services haswide-reaching growth implications
Source: ACIL Allen Consulting (2015),Economic Modelling for Australian Industry Report 2015
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
1 per cent
A 1 per cent increasein productivity produces significant increasesin output
• ICT & the Digital Economy
• Trade, Transport& Logistics
• Professional& Support Services
• Utilities
Growth sectors:1 per cent productivity shock — enabling services
Growth sectors
Per cent increase output, labour
productivity shock
Advanced Manufacturing 0.44
Medical Technologies & Pharmaceuticals 0.36
Mining Equipment, Technology & Services 0.22
Food & Agribusiness 0.13
Oil, Gas & Energy Resources 0.09
What next for services?
Enabling Services are well placed for future growth
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
• Services are growing fast
• Better data analysis required
• Important to focus on WHO is demanding services
• Understand potential barriers
• Capitalise on enablers to maximise potential
Industry InnovationWorkshop 2015
15 September
industry.gov.au/
Further informationContact Details
Australian Industry Report 2015Department of Industry and Science
Heather CotchingManager, Economic and Business ConditionsIndustry Economics BranchOffice of the Chief Economist
Phone: 02 6213 7829Email: [email protected]
2014
WWW.INDUSTRY.GOV.AU
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