Realising a Cloud-enabled Economy in Australia

Micro, small, and medium enterprises (referred to as “MSMEs”) are businesses and startups with between 1 and 250 employees and are a major driver of economic performance. In Australia, MSMEs collectively account for about 99% of all businesses, 41% of jobs, and about 30% of Gross Domestic Product (GDP).1,2 MSMEs are also a major source for innovation and disruption in the economy, leveraging both old and new technologies to fill gaps in the current market and bring new products and services to bear.

By allowing users to procure on-demand, scalable IT products and services over the internet or a private network, cloud technology has driven economic and societal benefits by creating new business models, reducing costs, and supporting new opportunities for entrepreneurs and startups. According to the Organisation of Economic Cooperation and Development (OECD), 71% all businesses across Australia now utilise at least some basic form of cloud technology (such office software and email), although adoption rates of more advanced technologies, such as artificial intelligence (AI) and machine learning (ML) remain low, at approximately 15% of businesses.3,4 Cloud technologies have most profoundly impacted MSMEs by allowing them to start, operate, and scale their operations more effectively.

The use of cloud technology by MSMEs is expected to become increasingly ubiquitous, advanced, and mature. With continuous advancements in technology and the decreasing costs of cloud services, MSMEs will have access to an even wider range of scalable and cost-effective technology solutions across functions, occupations, and industries. We refer to this potential future state as the “cloud-enabled economy,” a future characterised by high levels of overall cloud adoption across Australian businesses. It is anticipated that under this scenario, 90% of all businesses would adopt at least a basic level of cloud technology.5,6 For many businesses, however, this represents only the beginning of their cloud journey. The escalating sophistication in cloud technology beyond basic applications will be a pivotal driver for economic growth in the future. As MSMEs tap into advanced cloud functionalities, such as AI, data analytics, and serverless computing, they can foster innovation, streamline operations, and customise consumer experiences at scale. These advanced uses can unlock new revenue streams, encourage innovation and the creation of new business models, and enhance competitiveness, collectively underpinning the future of the digital economy.