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Newsletters - Innovation and Technology Update - Bulletin No. 6, June 2002

Special Features
    • Releases of business and government IT use data
    • Release of September quarter 2001 ISP information
    • Comparison of September quarter 2001 and 2000 ISP information
    • Release of higher education R&D data for 2000
    • Special article: how sophisticated is the e-commerce performed by Australian business?

Table of Contents

Welcome to the 6th edition of the ABS' Science and Technology Statistics Update.

The Update is a biannual electronic newsletter which provides you with information on statistical developments and data releases in the science and technology field.

We hope you find the Update useful and would appreciate any feedback you have to offer. Please send any comments to


We are happy to add new subscribers to the Update to our e-mailing list. If you did not receive this edition directly from us but would like to have future editions emailed to you, please contact: Andrew Major, whose email address is


We have two Science and Technology "theme" pages on the ABS web site. The theme pages provide links to the web version of the Update and will give you current information on statistical releases and contacts. They will also enable you to link up to other sites of interest. The theme pages can be found as follows:
    • Go to the ABS web site.
    • Select Themes from the menu shown on the left side
    • Select Information Technology or Science and Innovation theme pages.
If you have any questions about our theme pages, please contact Andrew Major, whose email address is



The November quarter 2000 Population Survey Monitor (PSM) was the last PSM to be conducted by the ABS. As the PSM was the source of our Household Use of Information Technology (HUIT) data, these data will no longer be produced by the ABS on a quarterly basis.

For 2001, a HUIT module of questions has been incorporated into the Survey of Education and Training (now called the Survey of Education, Training and Information Technology - SETIT). HUIT results are expected to be released from SETIT in August 2002 (Cat. no. 8146.0) .


The ABS publication Business Use of Information Technology (Cat. no. 8129.0) presents details from the ABS Business Technology Survey. The latest results were released on 20 March 2002 in respect of the 2000-2001 financial year.

The Business Technology survey is an annual economy wide survey collecting information from about 12,000 private sector businesses about their use of computers, the Internet and the web. These businesses are randomly selected to represent all industries, with the exception of Agriculture, Forestry, Fishing, Education, Religious organisations and Private households employing people.

The 2000-01 survey focussed on the extent and use of the Internet and web sites, as well as continuing to measure and refine the concept of Internet commerce. Future surveys will continue to adapt to changes in business use of IT.

Development for the 2002-03 survey is about to commence. Comments or suggestions regarding the data content for this survey are welcomed and should be addressed to Sheridan Roberts (

Some of the key findings from the 2000-01 survey were :
    • The number of businesses using IT continues to increase. By June 2001:
      84% were using computers (up from 76% in June 2000)
      69% had Internet access (up from 56% in June 2000)
      22% had a web presence (up from 16% in June 2000)
      20% of business were purchasing via the Internet (up from 10% in 1999-2000)
      9% of business were selling via the Internet (up from 6% in 1999-2000).
    • In Australia, the value of Internet sales for the year ended 30 June 2001 was estimated at $9.4b. This represented only a very small portion (0.7%) of the total sale of goods and services over the same period.

Main Features from catalogue 8129.0 can be found on the ABS web site.


The ABS publication Government Use of Information Technology (Cat. no. 8119.0) was released on 28th May 2002. This publication presents results, in respect of the 1999-2000 financial year, from an ABS survey on the use of information technology and telecommunications (IT&T) by government organisations. This is the third ABS survey of IT&T use by government, with the previous collections being conducted in respect of the 1993-94 and 1997-98 financial years. The 1999-2000 survey provides information on government expenditure on IT&T and IT employment.

The main findings of the survey were:
  • Total expenditure on IT&T by government organisations during 1999-2000 was an estimated $4.3 billion or 5% of total government operating expenditure.
  • Federal departments and agencies accounted for just under half (47%) of the total government expenditure on IT&T. State/territory departments and agencies accounted for slightly less (45%) and local government accounted for the balance (8%). When the proportion of IT&T expenditure to the total government operating expenditure is compared for each level of government, the following proportions are obtained 7% (federal), 4% (state/territory) and 2% (local government).
  • IT&T outsourcing expenses were $1,168 million or 27% of the total IT&T expenditure by government organisations in 1999-2000. While the ratio of IT&T outsourcing expenses to total IT&T operating expenses showed little variation between federal and state/territory governments at 29% and 27% respectively, a much lower ratio of 15% was reported by local government.
  • During 1999-2000, total IT&T operating expenses per employee were $4,800. However, there was considerable variation across the three types of government, with total IT&T operating expenses estimated at $9,500 per federal government employee, $3,600 per state/territory government employee and $2,300 per local government employee.
  • IT employees accounted for only 2% of total employment of government organisations at the end of June 2000. Federal departments and agencies had the highest proportion of IT employees to total employment (4%) compared with 1% for both state/territory and local government departments and agencies.


Data relating to the use of computers and the Internet on farms are obtained from the ABS Agricultural Commodity Survey (ACS). The survey covers all farms with an estimated value of agricultural operations (EVAO) of $5,000 or more. Results were released in the ABS publication
Use of Information Technology on Farms, Australia, 2000 (Cat. no. 8150.0) on 26 September 2001.

The next farm use of IT survey will be conducted in respect of 2001-02, with the results due to be released about the middle of 2003.


Internet Activity, Australia, September Quarter 2001 (Cat. no. 8153.0) was released on 3 January 2002. It featured results of the quarterly survey of Internet service providers (ISPs). The collection is a census of all Australian-based ISPs operating during the reference period. Data collected include: size and structure of the ISP industry, characteristics and location of ISP customers, their Internet usage and the nature of related telecommunications infrastructure. (ISPs are defined as businesses which supply Internet connectivity services to individuals, households, businesses and other organisations.)

Some findings from the September quarter survey were:
    • There were 603 ISPs operating at the end of the September quarter 2001.
    • Very large ISPs provided Internet access for 64% of all subscribers at the end of the September quarter. This compares with 22%, 10%, 3% and 0.1% respectively for Large, Medium, Small and Very small ISPs.
    • There were 1,201 million megabytes (Mbs) of data downloaded by subscribers during the September quarter 2001. This is similar to the June quarter download of 1,204 million megabytes. During the September quarter 2001, household subscribers downloaded 652 million Mbs of data (54% of the total) while business and government subscribers downloaded 550 million Mbs. There was an overall average of 281 Mbs of data downloaded per Internet subscriber, with household subscribers averaging 175 Mbs of data downloaded, and business and government subscribers averaging 1,011 Mbs.
    • Internet access technology is rapidly changing with a vast range of technologies available to access the Internet including: analog, digital, satellite, Wireless Applications Protocol (WAP), and microwave. There is keen policy interest in the growth of broadband technologies such as Cable and Digital Subscriber Line (DSL).

The results of the September quarter 2001 survey have been compared with the September quarter 2000 results and confirm significant change in the ISP industry. Of particular note is the reduction in the number of ISPs providing services and an increasing number of subscribers to those services.

Over the year to September 2001:
    • The total number of ISPs has decreased from 718 to 603 with the decrease mainly from the smaller ISPs (those with fewer than 10,000 subscribers).
    • Business and government subscribers have increased by 26% while household subscribers have increased by 9%.
    • Very large ISPs continue to dominate, providing Internet access for over 50% of all subscribers.
    • Data downloaded by subscribers has increased from 1,052 million megabytes per quarter to 1,201 million megabytes.
    • The number of subscribers accessing the Internet via free access plans has decreased from 685,000 (18% of total subscribers) to 192,000 (4% of total subscribers).
    • Increasing numbers of subscribers are accessing the Internet via permanent broadband methods such as Digital Subscriber Line (DSL). The number of subscribers using DSL has increased from 6,000 to 30,000 with the number of ISPs offering this service increasing from 28 to 62.

Other details, including information for States/Territories and smaller regions, are shown in catalogue 8153.0, Main Features of which can be found on the ABS web site.

Following a review, the ABS has reduced the frequency of this collection to biannual. It will now be conducted in respect of September and March quarters each year.


Results from the biennial ABS survey on the production and distribution of information technology and telecommunications (IT&T) goods and services by Australian businesses in 2000-01 will be released at the end of July 2002 in the ABS publication Information Technology, Australia (Cat. no. 8126.0). The publication also includes IT&T import and export data and IT&T international trade in services data obtained from other sources. This is the fourth survey covering the IT&T sector with the previous one being in respect of 1998-99.

The publication contains separate details on the IT&T industries included in the survey as well as information on the recorded media manufacturing and publishing industry (because it undertakes significant IT&T activities).

The next IT&T Production surveys will be undertaken in respect of 2002-03, with results expected to be released around July 2004. Development for the 2002-03 survey is about to commence. Comments or suggestions regarding the data content for this survey are welcomed and should be addressed to Sheridan Roberts (


Policy makers and others are increasingly interested in regional IT&T data. Within the limitations posed by sample sizes and confidentiality constraints, ABS is striving to meet this demand and is, or will be, able to offer regional data as follows:

    • The 2001 Population Census included the following IT questions asked of all persons in the household:

      Did the person use a personal computer at home last week?No
      Did the person use the Internet anywhere last week?No
      Mark all applicable boxesYes, at home
      Yes, at work
      Yes, elsewhere

      Initial results were released on 17 June 2002.
    • Data down to the Statistical Division level, in respect of farm use of IT, are available from the Agricultural Commodity Survey. Survey results in respect of 2000 are available from catalogue 8150.0.
    • As the survey of Internet service providers (ISPs) includes all businesses, some regional data in relation to 'points of presence' are available at Statistical Division level. See catalogue 8153.0 for more details.
    • Maps showing the uptake of Internet access for households in each Australian capital city statistical division can be found in the June 2001 release of 'State of Play', produced by the National Office for the Information Economy (NOIE). The report can be accessed from the home page of the NOIE web site,



The processing of the Higher education R&D survey for the year 2000 has been completed and results have been released. Details of R&D expenditure and human resources devoted to R&D classified by type of expenditure, type of activity, location of expenditure, source of funds, type of employee, research fields and socioeconomic objectives are available.

Summary statistics are contained in the publication Research and Experimental Development, Higher Education Organisations, Australia 2000 (Cat. no. 8111.0) which was released on 12 April 2002.

Key findings included:
    • In 2000, Higher Education Expenditure on R&D (HERD) was estimated to be $2,775m at current prices, 9% higher than that recorded in 1998. In volume terms, HERD was 2% up on 1998.
    • HERD as a percentage of Gross Domestic Product (GDP) fell to 0.41% in 2000, down from 0.43% in 1998. Australia's HERD/GDP ratio remains relatively high when compared with those available for other OECD countries, being higher than those for the United States of America, Germany and France.
    • Most R&D expenditure by higher education organisations was directed towards Society ($1,123m or 40%) and Economic development ($795m or 29%).
    • Medical and health sciences ($668m or 24%), Biological sciences ($325m or 12%), Engineering and technology ($309m or 11%) and Agricultural, veterinary and environmental sciences ($205m or 7%) were major fields of research.
    • The leading states in terms of higher education R&D expenditure were New South Wales with $811m and Victoria with $631m, accounting for 29% and 23% of total R&D expenditure respectively. Queensland accounted for 17% and the Australian Capital Territory 11%.
Main Features of catalogue 8111.0 can be found on the ABS web site.


Processing of the results from the surveys of R&D undertaken by businesses, government organisations and private non-profit organisations in 2000-2001 is complete and results will be released in July 2002. Details of R&D expenditure and human resources devoted to R&D classified by type of expenditure, location of expenditure, source of funds, type of employee, type of activity, research fields and socio-economic objectives have been collected.

The 2000-01 surveys were the first surveys of R&D by government and private non-profit organisations to use the classifications contained in the 1998 edition of the Australian Standard Research Classification (ASRC).


Dispatch of the survey of R&D undertaken by businesses in 2001-02 will take place in August 2002. Details of R&D expenditure and human resources devoted to R&D classified by type of expenditure, location of expenditure, source of funds, type of employee, research fields and socio-economic objectives will be collected. The survey will also include a question on biotechnology R&D.


The ABS surveys of R&D are conducted in accordance with standard guidelines promulgated by the Organisation for Economic Co-operation and Development (OECD) and contained in the OECD publication, The Measurement of Scientific and Technological Activities ('Frascati Manual' 1993). These guidelines have recently being reviewed and Australia was represented on several of the working groups that undertook the revisions.



There is growing recognition worldwide that biotechnology offers many opportunities for delivering economic and social benefits to citizens of both developed and developing countries. However, there is currently little statistical information available to monitor the diffusion of biotechnology and to assist with policy choices.


The ABS has been participating in an OECD Working Group which is developing a set of internationally comparable biotechnology statistical indicators. This work has proceeded to the stage where it can now form the basis for the development of strategies for the possible collection of Australian biotechnology statistics. The ABS has been working with a consultant, Bill Pattinson, to assist with this development. As a first step, he has prepared a paper describing the public policy and other user concerns on which biotechnology statistics should shed light, and the nature of the statistics required. This paper has formed the basis of consultations recently held with potential users of biotechnology statistics.


ABS is developing a statistical framework for measuring the Knowledge-based Economy and Society. We expect to publish a Discussion Paper on the framework in August 2002.

Following release of the Discussion Paper, we are hoping to receive feedback on whether the framework is considered by the expert community to be conceptually and methodologically sound, as well as whether the proposed indicators are appropriate.

No final decision has yet been made on dissemination of information from the framework. A publishing strategy will be included in the Discussion Paper and feedback on the strategy would be appreciated.

Please contact Sheridan Roberts ( if you would like more information or would like to be alerted to the release of the Discussion Paper.


During the 2001 Australia Day Speech, Prime Minister John Howard launched "Backing Australia's Ability: An innovation action plan for the future". This outlined the Government's strategy to further encourage and support innovation and enhance Australia's international competitiveness, economic prosperity and social well-being. The initiatives are designed to: strengthen our ability to generate ideas and undertake research; accelerate the commercial application of these ideas; and develop and retain Australian skills.

With the current interest in the innovativeness of Australian business, the ABS is undertaking preliminary research into how business innovation might be measured. Anyone interested in further information or in contributing to this research, please contact Clem Tozer ( "Backing Australia's Ability" is available from:



Around the world there is considerable debate as to what constitutes e-commerce. The main differences revolve around the technological complexity of the transactions, namely whether the transactions that enable e-commerce need to be fully automated. Some suggest that a simple one off email which constitutes an order is e-commerce, whilst others suggest that e-commerce over the Internet requires a sophisticated web site with technologies that enable secure transactions and integration with backend systems.

The ABS' annual Business Use of Information Technology survey collects data on the use of various information technologies by Australian businesses. Included in the surveys is a series of questions which, when analysed, can provide an understanding of the sophistication of use of the Internet and the World Wide Web.

This article uses information from the latest survey to shed some light on the current techniques and processes being used by Australian businesses when they undertake Internet commerce.

What is Internet commerce?

The ABS surveys have avoided the use of the terms e-commerce or Internet commerce due to variable interpretation by respondents. For purposes of producing results we do refer to Internet commerce and define Internet commerce transactions as purchasing or selling via the Internet, or more precisely placing or receiving orders for goods and services via the Internet, with or without on-line payment. This interpretation is consistent with the international definition recommended by the OECD for use by member countries in their national collections.

The definition we use restricts the attributes of Internet commerce and as such is both definable and measurable. It therefore allows us to measure something which, in common usage, has a multitude of meanings.

The ABS does not collect information on broader e-commerce, that is transactions conducted over computer-mediated networks other than the Internet.

Findings of the ABS surveys

When the results of the ABS's latest 2000-01 survey are analysed, some interesting findings on Internet commerce by Australian businesses are revealed. Generally, the methods of Internet commerce used by Australian businesses appear to be low technology and simple in process. For example, of the businesses earning income from the sale of goods and services via the Internet or web during the financial year to June 2001, just under one third received orders via the Internet but had no web site. This would indicate that their Internet commerce was unsophisticated and probably restricted to fairly simple email orders. In contrast, the remaining two thirds of these businesses have taken the next step in technology uptake and have established a web presence. By adding further functionality to their web sites, these businesses can potentially increase the sophistication of their Internet commerce to enable more automated Internet commerce applications.

How sophisticated is the Internet commerce done by Australian business?

Of the businesses which had established a web site and were earning income from the sale of goods and services via the Internet or web during the financial year to June 2001, there were varying degrees of sophistication in the Internet commerce facilities they offered. For example, on their web sites:
    • 39% have on-line ordering
    • 14% have on-line payment capabilities
    • 11% offer secure access or transactions (eg secure socket layers)
    • 10% have shopping cart facilities.

However, half of the businesses which received orders via the Internet during 2000-01 had established a web presence without any of the above four features. Consequently the Internet commerce facilities they offer are unlikely to be sophisticated.

Interestingly, only 8% of businesses earning income from the sale of goods and services via the Internet or web have the facility to integrate the processes with their back end systems . This appears very low and would presumably be an area where businesses stand to gain efficiencies by automating and integrating post order functions and processes.

Does business size matter?

If the data are broken down by business size, the results reveal that smaller businesses (in terms of employment) are less likely to be involved in Internet commerce and typically have little sophistication in their Internet commerce processes. At the end of June 2001, only 7% of the very small businesses (fewer than 5 employees) had received orders for goods or services via the Internet or web. This compares with large businesses (100 or more employees) where 24% had received orders for goods or services via the Internet or web. Of the businesses involved in Internet commerce, fewer than a quarter of the small businesses, compared to over half of the large businesses, had established web sites that included the facilities to either receive online orders or payments, had shopping cart facilities or offered secure access or transactions.

What else affects the level of Internet commerce sophistication?

The length of time that businesses have been receiving orders for goods or services via the Internet or web appears to be linked with the level of sophistication of their Internet commerce processes. Typically the longer a business has had a web site and has been able to receive orders via the Internet or web, the more sophisticated their web sites are in relation to Internet commerce functionality.


Most Australian businesses which are undertaking Internet commerce are using fairly simple processes and techniques. The level of sophistication of these processes and techniques increases with the size of the business. Not surprisingly, it also increases with the time businesses have been receiving orders for goods and services via the Internet or web.

If you would like further details on this work please contact John Ovington,


For more information, please contact:

Acting Director, Science & Technology Statistics (Innovation, Biotechnology and R&D):

Clem Tozer
Phone: (02) 6252 6709

Director, Science & Technology Statistics (IT&T and KBE/S):
Sheridan Roberts
Phone (02) 6252 5019

Assistant Director, R&D and Biotechnology Statistics:
Derek Byars
Phone: (02) 6252 5627

Assistant Director, Information Technology Activity Surveys:
John Ovington
Phone: (02) 6252 5189

Assistant Director, Information Technology and Telecommunications Industry and Research:
Tim Power
Phone: (02) 6252 7895

Assistant Director, Advisor on Household use of IT&T statistics (part-time):
Liz Finlay
Phone: (02) 6252 5933

Assistant Director outposted to the Department of Industry, Tourism and Resources:
Mary Patton
Phone: (02) 6213 7192

Commonwealth of Australia 2008

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