David Bartlett, former Tasmanian premier, is championing the National Broadband Network (NBN) as a driver of digital disruption, but he says businesses aren’t ready for the opportunities it will bring.

Bartlett believes one of the key impacts of the NBN will be on teleworking. He says in regions such as the Sunshine Coast, where commuting to Brisbane can be difficult, the NBN will enable the collapse of “value chains” and enable employees to work from anywhere.

However, he says there are several barriers to businesses becoming more accepting of teleworking and many do not understand how the NBN will transform business.

“NBN or not, what ubiquitous broadband means for the world … [is] 60 per cent of industry sectors are heading for a 'big bang' disruption and I think in large part Australian industry sectors are under-prepared for that,” he says.

“If you look at the retail sector in Australia, just two or three years ago Gerry Harvey, supposedly [a] retail sector leader, [said] ‘no one’s ever going to buy a fridge online’ – well it seems like a fairly naive statement,” Bartlett says.

“I think a lot of other industry sectors like manufacturing, tourism, the service sector, hospitality – a whole range of them, and government itself – are in for massive disruption and I think largely Australian industry sectors are under-prepared.”

Bartlett is currently working with Regional Development Australia, the Sunshine Coast Council and other institutions, including the University of the Sunshine Coast and Sunshine Coast TAFE, to help them plan for their digital future.

“They are planning [and] doing a lot of work to build capacity in industry and that’s I think where the major challenge for Australia stands – getting our traditional industry sectors to understand the digital economy and to understand what [the] NBN is going to do to transform their businesses,” Bartlett says.

The ‘digital disruption’

In September last year, Deloitte Access Economics released a report stating retailers, financial companies and the media were in the firing line of a digital “big bang” which will change their revenue structure by at least 15 per cent.

Other impacts could include job loss and the changing use of social media and online applications, according to Deloitte.

“As we saw in the recent company reporting season, digital innovations are transforming the economic landscape far more profoundly than other big shifts in our economic history such as deregulation, oil shocks or mining booms," Dr Ric Simes, Deloitte director, said.

Bartlett says this upheaval is occurring on a global scale due to high-speed broadband becoming more prevalent and it is starting to happen in Australia.

“What the NBN will do for Australia, in my view, is enable Australia to play in this space and create productivity and innovation in the digital economy,” he says.

But he says there is a “missing ingredient” that needs more focus which would allow key industries to take full advantage of it.

This includes understanding how new ways of wealth is created, such as new value chains, new marketing models and new products, according to Bartlett.

However, he says businesses also need to understand how old models are slowly being destroyed.

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One example is the growth of smartphone apps such as GoCatch, which has been lambasted by the established players in the taxi industry.

Independent app developers recently sought regulatory intervention after the NSW Taxi Council and Crime Stoppers launched an ad campaign on buses and the back of cabs urging consumers to avoid apps that don't have the Council's approval, such as GoCatch.

However, the app has the support of New South Wales Deputy Premier, Andrew Stoner, and Bartlett says industries need to get used to this happening more as consumers increasingly cut out the person in the middle to make their decisions about purchases and services.

“That’s a very good example of the sort of disruption I’m talking about and the sort of collapsed value chain that allows business now … to go direct to their customer and completely eliminate the traditional value chain from the middle,” he says.

While the industry furore around apps like GoCatch indicates discomfort around new business models, Bartlett says he doesn’t believe it is an unwillingness to change. Instead, businesses just don’t understand the changes that are occurring.

“Australian boards ... need to be populated more and more with people who understand this stuff, and too often they’re not,” Bartlett says.

He says mum and dad business owners are too busy to respond to the digital environment and it is up to the government and industry organisations to help the education process.

In particular, he says local and state government needs to play a greater role in engaging with industry sectors about new business models.

“When I hear that some 30 per cent of Australian tourism SMEs don’t even have a website, let alone an e-commerce-enabled website, you’ve just got to wonder how they’re surviving, frankly,” he says.

“The NBN is a great catalyst for conversation and one of the great things governments [have] … is they have the power to convene. That is, to bring people together to have a conversation and to plan for the future, and I think governments all over need to do more of that.”

Bartlett was premier of Tasmania between 2008 and 2011 and still lives in the state. He says the NBN benefits in regions like Tasmania, by helping to build on the state’s “natural strengths”, such as its renewable energy.

“In Tasmania we’re rolling out $400 million worth of irrigation schemes and the overlay of ubiquitous broadband with smart water grids and high value agribusiness is part of Tasmania’s future,” he says.

“[This] is an extraordinary opportunity for Tasmania both in innovation, productivity and so on. It’s those intersections of broadband with our traditional strengths that are a great opportunity.”

Former NBN Tasmania board member, Mark Kelleher, agrees, recently stating the NBN will make Tasmania less isolated from the rest of Australia and may even entice mainland residents to relocate to the state.

However, Bartlett cautions that the NBN will only provide a limited amount of opportunities.

“I think if regions suddenly think they’re going to become the Silicon Valley of the south just because they’ve got high-speed broadband, [it] is wrong,” he says.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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