Growing the Digital Economy in Australia and New Zealand: Maximising Opportunities for SMEs

The Commissions should commence the joint work in September and submit a report to leaders, through the Treasurer of Australia and the Finance Minister of New Zealand, by the end of January 2019. [...] AUSTRALIA AND NEW ZEALAND IN THE DIGITAL ECONOMY 13 Productivity growth in OECD countries is driven by small numbers of firms at the frontier of knowledge, and the gap between these ‘frontier’ firms and the rest of the economy is widening. [...] Where there are low levels of competition, the diffusion of knowledge and technology from the ‘frontier’ to the rest of the economy is slow, as is the reallocation of resources from laggards to leaders (Conway and New Zealand Productivity Commission 2016). [...] AUSTRALIA AND NEW ZEALAND IN THE DIGITAL ECONOMY 19 Box 1.3 Why digital has not made the earth flat Some authors have argued that the development and expansion of digital technologies reduce the impact of borders and distance on production and trade, making the world ‘flat’ (Friedman 2005). [...] This has been built on the uptake of new technologies, beginning with the application of superphosphate and the introduction of new cultivars from 1900, mechanisations in the middle of the 20th century, and continuing with further advances in the later part of that century, such as genetic technologies.