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The Productivity Commission discovered a clear pattern during its assessment of Australia’s cloud use, that companies operating in remote Australian areas using cloud applications can provide provide higher average wages for their workers.
“One model we’ve drawn so far is that the positive impact of the cloud is for companies located in regions outside of Australia or outlying Australia,” said Productivity Commissioner Catherine de Fontenay. at the Economic Implications Digital Economy Conference on Wednesday.
This pattern was found as part of a study conducted by the Productivity Commission on whether cloud technology is associated with higher company revenue per worker and higher wages per worker. are not.
The study was conducted because there is little empirical evidence on the extent to which cloud services increase a company’s performance and return to labor, the commissioner explained.
According to de Fontenay, one interpretation of the study is that the use of cloud services, such as teleconferencing and online storefronts, allows local and remote businesses to reach out suppliers and customers that are traditionally only available when there is a physical presence in another region.
Outside of this stereotype, however, de Fontenay says there is currently no correlation between a well-run company and using cloud services when looking at data on revenue per employee and average salary. averages of companies.
She explains that research has discovered two types of lag when it comes to revenue per employee and average wage performance. The first category is the average companies that outperform their peers but have yet to adopt cloud technology. For these companies, cloud technology represents an untapped opportunity, which raises questions about the factors that contributed to the deprecation.
The second group of productivity laggards are “naive leaders” who have adopted technology but have experienced negative effects. De Fontenany says these negative impacts are due to a multitude of reasons, such as choosing the wrong supplier, higher-than-expected procurement and fulfillment costs, security breaches or a lack of skilled labor supplement at the company level.
However, UNSW economics professor Kevin Fox noted during a roundtable discussion at the conference, however, that it remains unclear whether below-average performance is just short-term as the cloud remains a key driver. a relatively new technology.
“It could mean wage growth will outpace companies that just continue to do what they know how to do,” said Fox.
“I think that’s a really good point. The problem is that everyone is in the cloud right now,” De Fontenay said in his response, explaining that it’s hard to quantify the value of the cloud, especially when It is widely applied in recent years.
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