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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Contents >> Communications and information technology >> Use of information technology

Business use of information technology (IT)

The growth in the adoption of IT by Australian businesses has slowed compared to previous years (graph 23.12). For the period between June 2001 and June 2002 the proportion of businesses using a computer remained unchanged at 84%. Over the same period, growth in access to the Internet has increased three percentage points to 72% and the proportion of businesses with a web presence increased by two percentage points to 24%. In the year to June 2001, the proportion of businesses using a computer, accessing the Internet and having a web presence, grew by 8, 13 and 6 percentage points respectively.

Graph - 23.12 Businesses use of IT - 30 June


Adoption of IT by businesses

A strong relationship exists between the employment size of a business and the likelihood that the business is using IT (table 23.13). As employment size increases, so does the proportion of businesses making use of IT. For example, at 30 June 2002 all large businesses (100 or more persons employed) used computers, 99% had access to the Internet and 81% had a web presence. Micro businesses (0-4 persons employed) had a lower level of IT adoption: 79% used computers, 65% had access to the Internet and only 15% had a web presence.

At the end of June 2002, the proportion of businesses using information technologies varied considerably across industries. The proportion of businesses using computers or with access to the Internet was lowest in the Personal and other services industry (70% and 53% respectively) and in the Accommodation, cafes and restaurants industry (72% and 57% respectively). Computer and Internet access was highest in the Property and business services industry (94% and 87% respectively). The highest proportion of businesses with a web presence was in the Cultural and recreation services and the Wholesale trade industries (both 36%), while the lowest proportion was in the Construction industry (9%). It should be noted, however, that at the end of June 2001, the Electricity, gas and water supply industry had the highest computer (95%), Internet access (89%) and web presence (44%), but data for this industry at the end of June 2002 is not available.

23.13 BUSINESS USE OF SELECTED INFORMATION TECHNOLOGIES - 30 June 2002

Businesses with(a)

Number of businesses
Computers
Internet access
Web site or home page
'000
%
%
%

Employment size
Less than 5 persons
408
79
65
15
5-19 persons
201
91
80
34
20-99 persons
45
98
93
55
100 or more persons
6
100
99
81
Industry
Mining
2
89
81
30
Manufacturing
55
81
71
29
Electricity, gas and water supply
-
n.p.
n.p.
n.p.
Construction
92
81
63
9
Wholesale trade
46
90
79
36
Retail trade
114
78
63
25
Accommodation, cafes and restaurants
34
72
57
31
Transport and storage
32
81
66
23
Communication services
5
83
64
22
Finance and insurance
26
90
84
25
Property and business services
150
94
87
30
Health and community services
55
89
72
15
Cultural and recreational services
19
87
80
36
Personal and other services
31
70
53
23
Total businesses
661
84
72
24

(a) Proportions are of all businesses in each category.
Source: Business Use of Information Technology, 2001-02 (8129.0).

Business use of the Internet

The most common method of Internet access by Australian businesses was dial-up via modem with 86% of businesses utilising this method. Less common was the use of Digital Subscriber Line (DSL) (7%), cable modem (7%) and Integrated Services Digital Network (ISDN) (4%). Only a very small percentage of businesses had access to the Internet via a wireless connection (1%).

Despite only a small increase in the proportion of businesses using the Internet, the nature of the activity has changed. For example, while use of the Internet for email remained the most common activity for businesses with Internet access (94%), the proportion accessing banking and financial services increased from 59% during 2000-01 to 69% during 2001-02. There was also an increase in the use of the Internet for information searches, with the proportion of businesses undertaking this activity increasing from 80% to 88% over the period.

Business use of web sites

While the number of businesses selling via the Internet has decreased, those businesses undertaking selling via the web are becoming more sophisticated. Over the period, more businesses with a web presence offered on-line ordering (14% to 16%), shopping cart facilities (4% to 5%), on-line payment capabilities (5% to 9%) and the capability for secure access or transactions (5% to 7%). The integration of web technology with back-end systems continued to be rare among businesses with a web presence (6%), but has increased from 3% since June 2001. Similar increases occurred over the same period for the proportion of businesses with a personalised page for repeat customers (2% to 5%), account information (4% to 6%), and the facility to track orders (2% to 4%).

The significance of Internet commerce in Australia

The ABS defines Internet commerce as placing or receiving orders for goods and services via the Internet or web, with or without associated on-line payments.

The proportion of businesses placing orders via the Internet or web, with or without on-line payment, continues to increase, while the proportion receiving orders has declined. During 2001-02, 25% of businesses placed orders via the Internet or web, compared to 20% during 2000-01. The proportion of businesses receiving orders for goods and services via the Internet or web was 6% during 2001-02, declining from 9% in 2000-01.

While the number of businesses receiving orders via the Internet decreased, the estimated value of income earned from these orders continued to grow. However, there are both conceptual and measurement issues which mean that the estimate of income for orders placed over the Internet or web should be treated with caution. Internet income earned by Australian businesses increased by $1.9b from $9.4b in 2000-01 to $11.3b in 2001-02. The value of this Internet income represented 0.8% of total business income during 2001-02. This increase compares to an increase of $4.3b between 1999-2000 and 2000-01, when Internet income increased from $5.1b to $9.4b. Income from orders received via the Internet or web was more concentrated in larger businesses in 2001-02 than during 2000-01, with those businesses employing 100 or more persons earning 81% of the total Internet income in 2001-02, compared with 58% in 2000-01.

Business IT security

Only 14% of businesses with a computer reported having no IT security measures in place at June 2002, with 86% reporting some form of IT security. The most common form of IT security reported was anti-virus software or a virus scanner (80%). The next most common form of IT security was physical security (34%), followed by authentication software or hardware (22%) and the use of a firewall (19%).

Of those businesses using a computer, 59% reported that they did not experience a security incident or breach during 2001-02, while 41% reported experiencing some form of breach or incident. A virus was the most common IT security incident or breach reported by businesses using a computer (38%), followed by a trojan or worm (15%). The level of unauthorised network access was small, with only 2% of businesses reporting this form of IT security breach. Caution should be exercised in interpreting these percentages, as businesses may have been reluctant to report security breaches.

Farm use of IT

There has been steady growth in the use of IT by farms in Australia (table 23.14). At June 2000, 58% of Australian farms with an estimated value of agricultural operations (EVAO) of $5,000 or more used a computer, compared with 49% at March 1999 and 40% at March 1998.

An estimated 34% of farms in Australia used the Internet at June 2000, compared with 18% at March 1999 and 11% at March 1998. Although fewer farms used the Internet than used a computer at June 2000, the 91% increase in the number of farms using the Internet over the 15 months to June 2000 far exceeded the percentage growth in the use of computers for the same period.

At June 2000:
  • the Northern Territory showed the highest proportion of farms using a computer (71%) and the highest proportion of farms using the Internet (49%)
  • New South Wales showed the lowest proportion of farms using a computer (53%) and the lowest proportion of farms using the Internet (31%)
  • the poultry farming industry showed the highest proportion of farms using a computer (72%) and the highest proportion of farms using the Internet (45%)
  • the grain, sheep and beef cattle farming industry showed the lowest proportion of farms using a computer (55%) and the lowest proportion of farms using the Internet (31%)
  • there was a strong relationship between farm size, as measured by the EVAO, and the use of a computer and the Internet. As farm size increased so did the proportion of farms using a computer and the Internet. For example, 68% of farms with an EVAO of $1m or more used the Internet, compared with 25% of those with an EVAO less than $50,000.
23.14 FARMS USING A COMPUTER AND THE INTERNET(a)

NSW
Vic.
Qld
SA
WA
Tas.
NT
ACT
Aust.
%
%
%
%
%
%
%
%
%

June 2000
Farms using a computer
53
58
58
64
68
57
71
70
58
Farms using the Internet
31
33
32
40
40
35
49
42
34
March 1999
Farms using a computer
49
49
45
53
59
49
65
64
49
Farms using the Internet
19
17
16
19
18
22
31
26
18
March 1998
Farms using a computer
40
37
37
43
49
36
52
55
40
Farms using the Internet
12
10
10
12
10
12
22
20
11

(a) Data were collected in the Agricultural Commodity Survey, reference periods March 1998, March 1999 and June 2000.
Source: Use of Information Technology on Farms, Australia, June 2000 (8150.0).

Household use of IT

The percentage of Australian households with access to a computer at home has increased steadily from 44% in 1998 to 61% in 2002 (graph 23.15). The percentage of Australian households with access to the Internet at home has increased strongly, rising from 16% in 1998 to 46% in 2002.

Graph - 23.15 Household computer and Internet access


Characteristics of households with home Internet access

Households in metropolitan areas, with children under 15 years of age and in the Australian Capital Territory were more likely to have access to computers and the Internet at home (table 23.16).

23.16 HOUSEHOLD COMPUTER AND INTERNET ACCESS

Computer access(a)
Internet access(a)


1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
%
%
%
%
%
%
%
%
%
%

Households
Without children under 15
36
39
44
51
53
14
18
28
37
40
With children under 15
63
65
71
77
79
20
29
43
54
59
State or territory
New South Wales
44
45
52
59
61
18
22
32
45
48
Victoria
46
50
56
61
62
15
23
34
43
46
Queensland
43
44
50
55
57
15
20
31
40
42
South Australia
41
45
49
56
58
12
19
29
37
43
Western Australia
44
50
55
58
63
15
22
34
41
48
Tasmania
36
40
45
50
51
10
18
25
31
35
Northern Territory
42
55
54
52
62
16
30
35
38
48
Australian Capital Territory
64
66
70
77
78
27
34
46
60
60
Region
Metropolitan areas
48
51
55
62
65
19
25
36
47
50
Ex-metropolitan areas
38
40
48
52
54
10
15
26
34
39
All households
44
47
53
58
61
16
22
32
42
46

(a) Proportions are of all households in each category.
Source: Household Use of Information Technology, Australia, 2001-02 (8146.0).

Characteristics of adult Internet users

The number of adults using the Internet continues to grow rapidly; rising from 31% of all persons 18 years and over in 1998 to 58% in 2002. Strong growth has occurred in all age groups across the years. The likelihood that a person uses the Internet decreases with age.

During 2002, home was the site where adults were most likely to use the Internet (table 23.17). This was particularly the case for those adults with incomes below $40,000. Those adults with incomes above $40,000 were considerably more likely to use the Internet at work than those with lower incomes. Adults aged 18-24 years were most likely to use the Internet at sites other than home or work.

23.17 ADULTS ACCESSING THE INTERNET(a), Main characteristics - 2002

Site of Internet access(b)

Home
Work
Other sites
Any site
%
%
%
%

Age group (years)
18-24
57
28
69
84
25-34
52
42
49
78
35-44
55
39
29
69
45-54
45
36
19
58
55-64
32
21
12
42
65 or over
10
2
5
13
Personal income
$0-$39,999
37
20
29
52
$40,000-79,999
61
59
36
80
$80,000 or over
76
78
40
89
All adults
43
30
31
58

(a) Proportions are of all persons in each category.
(b) Persons may have accessed the Internet at only one or any number of sites.
Source: Household Use of Information Technology, Australia, 2001-02 (8146.0).

Over the period 1998 to 2002, home Internet use by adults has increased as a percentage of total use (graph 23.18). In 1998, 59% of those who used the Internet did not use the Internet at home, whereas in 2002 only 26% of those who used the Internet did not use the Internet at home.

Graph - 23.18 Proportion of home Internet use


Internet purchasing

During 2002, 2.2 million or 15% of Australian adults purchased or ordered goods or services via the Internet for private use (graph 23.19). This represents an increase of 34% in the number of Internet shoppers from 2001. Of Internet users, just over one in four (26%) were also Internet shoppers. The largest increase in the percentage of Internet shoppers between 2000 and 2002 occurred in the age group 25-34 years.

Graph - 23.19 Adults purchasing/ordering via Internet for private use


Accessing government services via the Internet

More than one in five (21%) adult Australians accessed government services via the Internet for private purposes in 2002, compared with one in six (or 16%) in 2001 (graph 23.20). For those adults who accessed government services in 2002 for private purposes, 49% did so to pay bills (compared to 38% in 2001). The next three most popular services accessed were taxation information, employment/unemployment information and submitting tax returns, each being accessed by 20% of adults who accessed government services in 2002.

Graph - 23.20 Adults accessing government services via Internet


Government use of IT

During 1999-2000, government organisations of all levels spent an estimated $4.3b, or 5% of total government operating expenditure, on ICT. By level of government, Australlian Government expenditure on ICT was 7% of total Australian Government operating expenditure, state/territory expenditure on ICT was 4% of total state and territory operating expenditure, and local government expenditure on ICT was 2% of total local government operating expenditure.

Australian Government departments and agencies accounted for just under half (47%) of the total government expenditure on ICT. State and territory departments and agencies accounted for slightly less (45%) and local government accounted for the balance (8%).

ICT outsourcing expenses in 1999-2000 were $1,168m, or 27% of the total ICT expenditure by government organisations. While the ratio of ICT outsourcing expenses to total ICT operating expenses showed little variation between the Australian Government, and state and territory governments, (29% and 27% respectively), a ratio of only 15% was reported by local government.

During 1999-2000, total ICT operating expenses per employee were $4,800. However, there was considerable variation across the three levels of government, with total ICT operating expenses estimated at $9,500 per Australian Government employee, $3,600 per state/territory government employee and $2,300 per local government employee.

ICT employees accounted for only 2% of total employment of government organisations at the end of June 2000. Australian Government departments and agencies had the highest proportion of ICT employees to total employment (4%), compared to 1% for both state and territory, and local government departments and agencies.

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