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
Workshop 2015
15 September
industry.gov.au/oce
Why look at enabling services?
Services industries, gross value added
(per cent of GDP), 1992–2014
Services sector has significant
growth potential
•
70.0
60.0
•
Strong productivity growth
50.0
•
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
Per cent of GDP
Services expanding
post-mining boom
40.0
30.0
20.0
10.0
0.0
1992
1997
Services
2002
Mining
2007
2012
Manufacturing
Source: ABS 5206.0 (Mar 2015)
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
Conceptual definition of enabling services
New ANZSIC grouping:
ICT & the Digital Economy
Enabling services are those
that primarily provide
business-to-business services
Focused not on WHAT they
produce, but WHO they produce
it for.
Using ABS I-O Input-Output (IO)
tables to identify Enabling Services
at the ANZSIC class level.
Professional & Support Services
Trade, Transport & Logistics
Utilities
Coverage — breadth of provision
Focus — proportion
of intermediate inputs
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
Conceptual definition of Enabling Services
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
Enabling services are
large, growing quickly, and productive
Enabling Services, GVA as a percentage
of All Industries’ GVA, 2004–2014
Enabling Services are
Significant in size
35
•
34
•
Per cent
34
Output (GVA) 31 per cent
of GDP
Employed 27 per cent
of workers
33
Have grown faster than other
industries in the economy
33
32
•
32
2004
2008
2012
•
Source: Department of Industry and Science (2015)
3.3 per cent annualised
output growth vs 2.9
per cent for All Industries
Output/hour was $83.3/hr
vs $69.8/hr for All Industries
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
Performance of enabling services varies
across groups
Enabling Services: GVA, annualised output growth, output / hour 2014
Output (per
cent of GDP),
2014
Annualised
output growth
(per cent),
2004–2014
Labour
productivity
(output / hour),
2014
2.2
3.7
72.2
19.8
3.7
88.4
Trade, Transport &
Logistics
5.2
2.7
63.7
Utilities
1.7
1.3
156.7
85.1
2.9
69.9
Enabling Services
ICT & the Digital
Economy
Professional & Support
Services
All Industries
Professional services is
the strongest performer,
with significant variance
between the four groups
Source: Department of Industry and Science (2015)
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
Bolstering enabling services has
wide-reaching growth implications
Growth sectors:
1 per cent productivity shock — enabling services
Per cent increase
output, labour
productivity shock
A 1 per cent increase
in productivity produces
significant increases
in output
Growth sectors
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
•
•
•
ICT & the Digital
1 per cent
Economy
Trade, Transport
& Logistics
Professional
& Support Services
Utilities
Source: ACIL Allen Consulting (2015),
Economic Modelling for Australian Industry Report 2015
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce
What next for services?
Enabling Services are well placed for future growth
•
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 Innovation
Workshop 2015
15 September
industry.gov.au/oce
Further information
Contact Details
2014
WWW.INDUSTRY.GOV.AU
Australian Industry Report 2015
Department of Industry and Science
Heather Cotching
Manager, Economic and Business Conditions
Industry Economics Branch
Office of the Chief Economist
Phone:
Email:
02 6213 7829
[email protected]
Industry Innovation
Workshop 2015
15 September
industry.gov.au/oce