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8101.0 - Innovation and Technology Update (Newsletter), Mar 2000  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 08/05/2000   
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5. SPECIAL REPORT

Findings from the ABS Y2K Survey: 'Use of Technology by Business, June 1999'

5.1 Introduction
5.2 Summary of Findings
5.3 Table 'Proportion of Businesses Using Technology by Industry'

5.1 Introduction

This article represents the status of business use of technology at the end of June 1999. The information presented was compiled from the second ABS survey of Australian business regarding their progress in addressing the Year 2000 problem. Although the data were collected in the context of a survey relating to the Year 2000 problem, the measurement of use of technology was relatively independent of knowledge about or experiences with the Year 2000 problem.

A questionnaire was mailed to approximately 13,000 businesses from all industries of the Australian economy, with the exception of Government administration and defence, Agriculture and Religious organisations. Respondents were asked to indicate which types of technologies were used by the business by checking a 'yes' or 'no' box for each item. The questionnaire asked about hardware, software and other technologies.

For more information regarding the sampling and survey methodology, see the explanatory notes at the back of the 'Year 2000 Problem' publication (Catalogue No. 8152.0).

Business size was found to be the major determinant of the range and intensity of technology use, with larger businesses more likely to use each type of technology than smaller businesses. The relationship between industry and use of technology was more complex. The electricity, gas and water supply industry was the most technology intensive, followed by property and business services. Other industries were less consistent in their use of technology, reflecting industry specific needs. Accommodation, cafes and restaurants were least likely to use computer based technologies but reported the second highest use of electronic banking and EFTPOS. State of location made little difference to the range or intensity of technology use.


5.2 Summary of findings

At the end of June 1999, nearly all Australian businesses used at least one type of technology. For instance, an estimated 99% of businesses used communications equipment, including telephones, facsimiles, PABXs, pagers etc. The 1% of businesses which did not use communications equipment were all micro businesses (between 1 and 4 employees).

An estimated 72% of Australian businesses used a personal computer, including stand-alone and networked computers. Businesses in the property and business services industries were most likely to use a computer, with 91% of businesses reporting using a personal computer. The industries with the next highest level of computer use were electricity, gas and water supply (89%), finance and insurance (81%) and health and community services (81%). In comparison, 53% of accommodation, cafes and restaurants and 57% of retail trade businesses used a computer. Larger businesses were more likely to use a computer than smaller businesses; 100% of businesses with more than 200 employees used a computer. This compared with 94% of medium sized businesses (between 20 and 199 employees), 78% of small businesses (between 5 and 19 employees) and 69% of micro businesses.

Other computer systems (including mainframe and mid-range systems) were most commonly used by businesses in the electricity, gas and water supply industry (47%). The use of other computer systems was clearly linked to business size, with less than 10% of businesses with fewer than 20 employees reporting using other computer systems. This compared to 27% of businesses with between 20 and 199 employees and 80% of businesses with more than 200 employees.

The use of general applications software followed a similar pattern to that of personal computers. General applications software included word processing, spreadsheet and accounting packages that are available to all consumers in a standard form rather than those tailored to a particular business' needs. Two-thirds of Australian businesses used general applications software at June 1999. The use of general applications software was most common in industries with high computer use and least common in industries with low reported computer use. All large businesses used general applications software compared to 92% of medium businesses, 71% of other small businesses and 64% of micro businesses.

Just over one third of all businesses used software designed for the business or software which although generally available had been customised for the business. Use of customised software was most common by businesses in the electricity, gas and water supply industry (74%). In comparison, 44% and 45% of business in finance and insurance and property and business services respectively used specially designed software. Only 10% of transport and storage businesses used software designed for the business. Business size influenced whether businesses were likely to use specially designed software, with large businesses being over three times more likely than micro businesses to use this software.

Over a third of all businesses used electronic mail. The highest level of use occurred in the electricity, gas and water supply industry (72%) followed by the property and business services industry (63%). These industries were also the most likely to use personal computers. This compared to 17% in accommodation, cafes and restaurants, 18% in construction and 19% in transport and storage: the three industries with the lowest use of personal computers. Size was again an important determinant of whether businesses used electronic mail. Of businesses with over 200 employees, 95% used electronic mail, compared to 63% of businesses with between 20 and 199 employees, 39% of businesses with between 5 and 19 employees and 34% of businesses with 1 to 4 employees.

An estimated 34% of Australian businesses used electronic banking or EFTPOS. Businesses in the communication services industry were most likely to use electronic banking or EFTPOS (53%), followed by accommodation, cafes and restaurants (52%), electricity, gas and water supply (49%) and retail trade (47%). Only 18% of businesses in the cultural and recreational services industry used electronic banking or EFTPOS. Large businesses were more likely than smaller businesses to use electronic banking or EFTPOS, with 85% of large businesses, 64% of medium businesses, 48% of other small businesses and 28% of micro businesses used electronic banking or EFTPOS.

An estimated 26% of Australian businesses used electronic building management systems. These systems included electronic security systems, lighting, lifts, fire alarms and air conditioning. The use of electronic building management systems was most prevalent in the electricity, gas and water supply industry (53%) and the wholesale trade industry (40%). Businesses in the transport and storage (16%) and construction (17%) industries were least likely to use electronic building management systems. Large businesses were over four times more likely (85%) than micro businesses (20%) and about twice as likely as other small businesses (42%) to use electronic building management systems.

Electronic equipment or systems with embedded chips included the use of process control systems, cash registers, diagnostic equipment, robotics and time controlled equipment used in the day to day operations of the businesses. Equipment of these types were used by an estimated 18% of Australian businesses. By industry, 65% of electricity, gas and water supply businesses and 44% of accommodation, cafes and restaurants used electronic equipment or systems with embedded chips, whilst only 4% of transport and storage businesses used this technology. Larger businesses were more likely than smaller businesses to use electronic equipment or systems with embedded chips, with 76% of large businesses, 48% of medium businesses, 28% of other small businesses and 14% of micro businesses reporting using these technologies.5.3 PROPORTION OF BUSINESSES USING TECHNOLOGY BY INDUSTRY
Proportion of Businesses
Using Technology
Communications
equipment

%
Personal
computers

%
Other
computer systems
%
General applications software
%
Software
designed for
this business
%

Industry
Mining
99
72
8
70
27
Manufacturing
98
68
4
63
29
Electricity, gas & water supply
99
89
47
87
74
Construction
100
63
**1
57
27
Wholesale trade
100
84
*9
80
37
Retail trade
100
57
*3
50
32
Accommodation, cafes & restaurants
100
53
*2
49
21
Transport & storage
100
59
3
50
10
Communications services
98
78
6
62
36
Finance & insurance
95
81
*11
76
44
Property & business services
99
91
*4
89
45
Education
100
83
*7
80
38
Health & community services
99
81
*6
73
41
Cultural & recreational services
97
77
*5
67
31
Personal & other services
100
64
*3
57
31
State & territory
New South Wales
100
73
5
67
34
Victoria
99
69
4
64
34
Queensland
99
72
*4
66
32
South Australia
100
68
7
60
31
Western Australia
98
77
3
70
37
Tasmania
98
66
2
62
34
Northern Territory
100
71
7
66
31
Australian Capital Territory
100
83
*3
80
42
Business Size
1-4 employees
99
69
*2
64
28
5-19 employees
100
78
7
71
49
20-199 employees
100
94
27
92
73
200 employees or more
100
100
80
100
94
All businesses
99
72
4
66
34


Proportion of Businesses Using Technology - continued

Electronic
mail
Electronic banking or EFTPOS
Electronic building management systems
Electronic equipment or systems with embedded chips
%
%
%
%

Industry
Mining
56
34
22
13
Manufacturing
34
29
27
14
Electricity, gas & water supply
72
49
53
65
Construction
18
23
17
*3
Wholesale trade
52
37
40
21
Retail trade
21
47
31
33
Accommodation, cafes & restaurants
17
52
24
44
Transport & storage
19
43
16
4
Communications services
32
53
27
16
Finance & insurance
56
26
28
*7
Property & business services
63
28
23
*10
Education
53
21
32
24
Health & community services
41
36
34
22
Cultural & recreational services
43
18
30
23
Personal & other services
25
28
28
27
State & territory
New South Wales
40
31
28
15
Victoria
34
38
26
22
Queensland
34
32
22
18
South Australia
30
34
29
16
Western Australia
36
38
28
18
Tasmania
33
27
31
26
Northern Territory
38
37
32
31
Australian Capital Territory
52
45
25
20
Business Size
1-4 employees
34
28
20
14
5-19 employees
39
48
42
28
20-199 employees
63
64
56
48
200 employees or more
95
85
85
76
All businesses
37
34
26
18



Data source: Year 2000 Survey, ABS
* Estimate has a relative standard error between 25% and 50%
** Estimate has a relative standard error greater than 50%



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