Login or Logout? Online Work in Regional Western Australia February 2015
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Login or Logout?
Online Work in Regional Western Australia
February 2015
Level 2, 53 Blackall Street 02 6260 3733
Barton ACT 2600 www.regionalaustralia.org.au
The Regional Australia Institute Independent and informed by both research and ongoing dialogue with the community, the Regional Australia Institute (RAI) develops policy and advocates for change to build a stronger economy and better quality of life in regional Australia – for the benefit of all Australians. Disclaimer and Copyright This research report translates and analyses findings of research to enable an informed public discussion of regional issues in Australia. It is intended to assist people to think about their perspectives, assumptions and understanding of regional issues. No responsibility is accepted by the RAI, its Board or its funders for decisions made by others based on the information presented in this publication. Unless otherwise specified, the contents of this report remain the property of the RAI. Reproduction for non-commercial purposes with attribution of authorship is permitted. RAI Research and Policy Project researcher: Annemarie Ashton-Wyatt, Senior Researcher Project supervisor: Jack Archer, Deputy Chief Executive Officer Contributing to analysis, editorial and review: Su McCluskey, Chief Executive Officer Jennie Dwyer, Policy Advisor Chrissy Peters, Research Intern All RAI research is informed by the expertise of the RAI Research Advisory Committee (RAC). Members in 2014/15 are: Professor Sandra Harding, James Cook University and Director, RAI (RAC Chair) Professor Andrew Beer, University of Adelaide Professor Graeme Hugo, University of Adelaide Professor John Tomaney, Newcastle University Tim Shackleton, Director, Virtual Health, and Director, RAI Login or logout, February 2015 Page | i
Research Partnerships
This research has been funded through a partnership between the RAI and the Department of
Regional Development, Western Australia.
Executive Reference Group:
Tim Shackleton, Regional Development Council of Western Australia
Mike Rowe, Department of Regional Development
Su McCluskey, Regional Australia Institute
Project Steering Committee:
Ken King, Pilbara Development Commission (Chair)
Bruce Manning, Great Southern Development Commission
Richard Hancock, Pilbara Development Commission
Janine Hatch, Wheatbelt Development Commission
Grant Arthur, Wheatbelt Development Commission
John Acres, Department of Regional Development
Denis O’Donovan, Department of Regional Development
Jack Archer, Regional Australia Institute
Acknowledgements
The RAI thanks the following people and organisations who have contributed to the
development of this report:
Dave Asbury, Coactum Drafting Solutions
Gavin Treasure, Mid West Development Commission
Login or logout, February 2015 Page | ii
Table of Contents Executive Summary..................................................................................................................................... 1 Introduction................................................................................................................................................... 5 Global Trends in Digital Access for Work ............................................................................................. 8 Australian Trends in Digital Access for Work ......................................................................................10 Opportunities for Growing Regions ......................................................................................................12 Types of Online Work and Potential for Development in Western Australia ..............................16 Capacity for Online Work in Western Australia ...............................................................................24 Regional Analysis of the Knowledge Services Sector ........................................................................32 Regional Case Study: Discipline and Flexibility Drive Success in Online Business ............................36 Regional Analysis of the Health Sector ................................................................................................39 Regional Case Study: The WA Country Health Service .......................................................................40 Broadband Connectivity and Technological Readiness .....................................................................42 Broadband Capacity and Existing Regional Broadband Uptake ..................................................45 National Broadband Network Coverage in Regional Western Australia .....................................47 3G and 4G Wireless Capacity .............................................................................................................53 Business Capacity for Uptake of Online Work ...................................................................................55 ICT and the Regional Location of Production ......................................................................................59 The Future of Online Work - An Initial Assessment of Regions in Western Australia ..................62 Conclusion ...................................................................................................................................................69 Future Options ...........................................................................................................................................71 Appendix A: Broadband Connectivity and Supporting Technological Capacity in Regional Western Australia in 2011 ......................................................................................................................72 Appendix B: ADSL2+ Enabled Telstra Telephone Exchanges in Regional Western Australia in 2013 ...........................................................................................................................................................74 Appendix C: NBN Service Type, Connectivity and Suitability for Online Work .............................75 Appendix D: List of Tables and Figures .................................................................................................76 Contacts and Further Information ..........................................................................................................77 End Notes and References ......................................................................................................................78 Login or logout, February 2015 Page | iii
Login or logout, February 2015 Page | iv
Executive Summary Advances in information and communications technology (ICT) are changing the nature of many jobs in Australia, as they enable both new types of work and new working arrangements to emerge. Knowledge-based work can potentially be undertaken in any place with sufficient connectivity, equipment and workforce capability. This unties many jobs from a single site of production. The term online work can collectively be used to describe work delivered from a home-based office, a mobile work site, a call-centre, a tele-centre or digital hub, or a remote operations centre. Technology in the workplace offers opportunities to deepen the connection of Western Australian regions to the rest of the world. This offers potential for regional residents and businesses to have new or easier access to national and international markets for goods, services and employment. It also offers challenges, as existing regional markets are simultaneously opened up to new competitors. This report assesses opportunities and challenges for online work in regional Western Australia to better inform regional development strategies and policy. Understanding the Opportunity Online work is occurring in regional Western Australia, but limitations in data currently restrict our understanding of the scale of this practice. A critical mass of people moving into online work roles will be required for this trend to have a discernible impact on a regional economy. The potential for the expansion of online work in any region depends upon four key factors: Workforce capacity; Industry mix; Broadband connectivity; and Business capacity. Workforce capacity - Online work is best suited to professional, administrative, managerial, or creative roles. Work tasks most suited include ICT, communications, research/analysis, sales, graphic design, report writing, and administrative activity. Approximately 35 per cent of the regional workforce in Western Australia is currently employed in occupations with at least some potential to engage in online work. Furthermore, 34 per cent of the Perth workforce has some potential for online work, and 16 per cent of the Perth workforce has high potential for online work. This provides an opportunity for more Perth people to move to regional areas and keep the same job. Login or logout, February 2015 Page | 1
Industry mix – Industries based on the exchange of knowledge have the highest uptake of
online work. These are currently concentrated in metropolitan Perth rather than in regional
areas of Western Australia. The core regional industries, such as agriculture, retail, food and
accommodation services, tend to be those with much lower potential for online work. The
exception to this trend is mining which has both high levels of regional employment and high
levels of digital access.
Broadband connectivity – Sufficient speed, bandwidth capacity and reliability is needed to
make online work commercially viable. While it is possible to use slower connections for some
online work, such connections are not viable for roles requiring the transmission of large
packets of data, such as design work, high quality video, or multi-channel data access. The
evidence indicates that connectivity in regional Western Australia is highly variable. Despite
an evident lag in the development of high speed fibre-based broadband connectivity, there is
wider coverage through mobile networks.
Business capacity – There is some evidence that regional businesses tend to lag behind in the
uptake of online work opportunities. While this could reflect lower levels of industry and
occupational suitability, it is evident that lower connectivity is a barrier in many regions.
Availability of ICT and business supports are also highly variable across regional Western
Australia. Larger regional population centres tend to have more supports available to assist
businesses to expand their technical capacity and employee skills.
Potential for Online Work: Hotspots in Regional Western Australia
Several local government areas (LGAs) in regional Western Australia have significant
opportunities to tap into online work as a regional development strategy:
Good connectivity, existing workforce skills, and an availability of labour offers
potential for digital hubs to be established in places such as Bunbury, Geraldton,
Mandurah and Pinjarra;
Proximity to metropolitan areas and the availability of labour offers potential for the
development of call-centres or back-office processing in the inner Wheatbelt and Peel
region, if sufficient connectivity is available;
The existing workforce skills level and business supports available in Albany offer
prospects for targeted development of ICT services, subject to available connectivity;
The Pilbara, Kimberley and Goldfields/Esperance regions currently face challenges
due to high competition for labour from the mining sector, but opportunities may exist
for partners of people in mining to have higher workforce engagement through online
work; and
Remote operations centres are possible in areas with high connectivity and workers
with knowledge of mining activity, such as Busselton and Mandurah.
Login or logout, February 2015 Page | 2
Lack of high speed broadband connectivity risks creating bottlenecks to growth in regions with
potential to develop and engage with the knowledge economy. Areas with substantial
populations and no planned improvements in connectivity risk the creation of a digital divide
which will inhibit their long term economic growth.
Most other areas of regional Western Australia exhibit a combination of poor connectivity,
low levels of ICT workforce capacity, and limited business capacity. Although some online work
will occur in these areas it is unlikely that it will be to an extent that will drive regional
development outcomes.
These patterns of opportunity will be challenging for governments and regions to shape. The
most important role for government lies in:
Ensuring the development of telecommunications networks in regional areas that are
sufficient to enable online work engagement;
Assessing if any potential barriers exist in legislation or policy which may inhibit the
development of online work and e-business1 in regional areas;
Supporting the development of digital literacy in regional workforces; and
Promoting the productivity benefits of online work to business.
Future Options
As profiled in this report, online work opportunities are under developed in regional Western
Australia. A collaborative approach is required between government, regional organisations
and industry to act on current opportunities. The research in this report offers several potential
pathways for further development of online work in regional Western Australia:
1. The development of online work as a regional development strategy should be
prioritised in Bunbury, Geraldton, Mandurah and Pinjarra, including consideration of
the feasibility of establishing digital hubs in these areas in association with the private
sector;
2. Increasing the quality of broadband to meet the minimum requirements for online work
should be a priority for Albany, Denmark, and the peri-urban areas2 in the
Wheatbelt, with the consideration of regional development initiatives focused on online
work to coincide with the introduction of better services; and
3. That the potential benefits of online work initiatives in the Gascoyne,
Goldfields/Esperance, Kimberley, and Pilbara regions, are further explored.
Login or logout, February 2015 Page | 3
The essential elements for expanding online work in regional Western Australia are:
A skilled and internet ready workforce;
Knowledge-based jobs and industries;
Access to broadband; and
Business capacity.
Top 20 LGAs in regional Western Australia with potential for online work
Albany (C) Chittering (S) Harvey (S) Narrogin (S)
Broome (S) Dardanup (S) Kalgoorlie/Boulder (C) Northam (S)
Bunbury (C) Denmark (S) Karratha City (C) Port Hedland (T)
Busselton (S) Donnybrook-Balingup (S) Mandurah (C) Serpentine-Jarrahdale (S)
Capel (S) Greater Geraldton(C) Nannup (S) Toodyay (S)
Login or logout, February 2015 Page | 4Introduction
The emergence of the global digital economy is creating both opportunities and challenges for
regional areas in Western Australia. Competitiveness in global markets increasingly depends
on more than just leveraging the benefits of progressions in technology. As profitability shifts,
the ability of regions to innovate and engage with the knowledge sector can provide a
competitive edge. Innovation can make the difference between a trajectory of future growth
and a pathway of decline for regional areas.
Flexibility of labour is often required to meet new methods of production. Jobs in regional
Australia are always evolving. This is due to new technologies, but also reflects trends in
increased population mobility. One labour shift which occurred in recent decades was the rise
of Fly-In/Fly-Out (FIFO) work in regional Western Australia.
Advances in transport technology, and the resulting cost-effectiveness of mass transport
infrastructure and services, enabled people to reside in a location distant from their place of
work and undertake long distance commuting on a regular basis. This proved to be a more
cost-effective model for mining companies, especially when compared to the previous need to
build an entire town to support remote area mining activity.
The next substantial shift in labour mobility is being created by the rise of internet and
communications technology (ICT). Advances in ICT and mobile technology have untied many
jobs from the need for a specific location of production. This has led to two fundamental
changes in work practices:
Mobility of production – services based on knowledge and data can be delivered
from any location, at any time, as the nature of the goods and services produced and
delivered using the internet effectively removes or reduces some of the distance and
time zone barriers across the world; and
Remote operations – improvements in technology enable machinery and equipment to
be operated at a control centre away from the production site.
Expansion in ICT is changing the way that Australia does business. The growing use of the
internet and mobile technology as business tools has untied many places of work from the
restrictions of a single spatial location.3 Laptops, smartphones and cloud-based computing
systems4 are all factors contributing to a growing ability for productive work to occur outside
of the traditional office environment.5 6
Login or logout, February 2015 Page | 5Different jobs enabled by the use of ICT are referred to under a range of terms, including e- work, telecommuting, telecentre work, virtual work, and remote operations. This paper uses a collective term, online work, to cover all aspects of ICT enabled work which are not tied to a single location of production. An exploration of different types of online work existing or with potential for development in regional Western Australia is presented later in this report. Online work is no longer necessarily limited to a few privileged professionals, such as lawyers and ICT consultants, working within easy reach of a central business district. ICT and mobile technology is now more affordable and can be used in a variety of jobs to overcome the physical distances in regional Australia; linking the regions to the cities and the rest of the world in a real time environment. Many people in regional Australia are already interacting to some degree with the national and global economy through the use of ICT, such as downloading market data at a regional saleyard or uploading scientific data from a remote location using a satellite link. Despite a growing regional connectivity, there is limited quantitative data on the extent of access to online work in regional areas. Digital access includes informal work from home days, doing extra work at home after office hours or checking emails using a smartphone. Evidence of the blurring of boundaries between work and home domains in everyday work patterns is beyond the scope of this paper. Recent research by the Australian Communications and Media Authority indicates that while digital access relating to employment is becoming relatively widespread, small to medium size enterprises (SMEs) in regional areas were still less likely to enable internet access for employees to work away from their main place of employment. An estimated 46 per cent of SMEs in regional areas provided digital access compared to 54 per cent of SMEs in metropolitan areas in 2013.7 Ad-hoc digital access is different to formal online work arrangements, which have agreed work hours, outputs and conditions for employees to work from home on a part-time or full- time basis over a longer period of time. Online work arrangements of more than 33 hours per week were limited to less than 10 per cent of the Australian workforce in 2011.8 Another Australian study into home-based telework found a lower level of incidence, with 2.6 per cent of workers in regional areas compared to 3.5 per cent of metropolitan areas in 2004.9 While the variation between these studies reflects different methodologies as well as time periods, it is clear that online work is undertaken by relatively small proportions of the workforce, and is likely to have lower levels of uptake in regional areas. Some of the gap in business models utilising online work arrangements is due to differential industry requirements. While technological capacity improvements mean that some jobs can now be completely untied from a specific location of production, these sorts of positions tend Login or logout, February 2015 Page | 6
to be more prevalent in the industries based in the production of knowledge-based outputs
rather than physical goods and services, and in roles specialising in the knowledge skills within
different industries.
The knowledge sector is growing in local and global economies, because the process of
innovation has become an ever more important driver of competitive advantage.10 This sector
is different to any other sector because it is about the “creation, accumulation or dissemination
of knowledge” rather than the production of traditional or tangible commodities, goods or
services.11
Knowledge industries are less prominent in regional areas compared to metropolitan areas.
Smaller towns usually have more limited knowledge sectors than larger regional centres. The
reasons for this trend, other than related to market size, are beyond the scope of this paper,
but development of knowledge industries can be limited by a number of issues:
Access to ICT connectivity (both reach, cost and quality of service);
Availability of workforce skills;
Concentration of tertiary education and research institutes in metropolitan Perth; and
The level of business literacy and ICT support capacity to enable a transition to online
work.
Access to ICT is not equitable across Australia. Large gaps exist in both coverage and quality
of service throughout different regional and some metropolitan locations. At present, many
regional areas in Western Australia face substantial barriers in obtaining a level of access
that is affordable and equitable, and has sufficient speed and data capacity to work as a
substantial driver for economic growth.
While technological advances provide an opportunity to close some of the gaps, the reality of
achieving this goal depends upon timely investment in infrastructure, workforce skills and
business development. Businesses also differ in their capability and levels of motivation to
invest in upgrades in technology, purchase support services, and invest in staff development.
This report explores the nature of online work with specific consideration to the experiences of
regional Western Australia. It also assesses regional access to enabling factors for online work
and identifies ways in which regions and policy can support good outcomes for regions in the
future.
Login or logout, February 2015 Page | 7Global Trends in Digital Access for Work The technology-enabled mobile workforce is already substantial throughout most developed economies in the world. Employees working at home and in other remote locations, self- employed contractors and home-based businesses are the main participants in this trend. The global rate of mobile working was approximately 1 billion people in 2010, and is expected to reach 1.3 billion (37 per cent of the global workforce) in 2015.12 The increasing trend for mobile working is based on more than just improvements in technological capacity. Even though technology is the factor that enabled the automation of many knowledge-based tasks, and their subsequent detachment from a fixed spatial production requirement, it is business demand for knowledge intensive goods and services to be on call which is the greater driver.13 Global markets increasingly require more mobile and flexible workforces which are connected and can respond immediately to need. In this environment, technological capacity and flexibility of working hours are essential for providing a competitive edge. Despite this, ICT alone is not enough to be competitive. A weakness in many initial rural and regional ICT connection programs is that ICT alone will not solve development problems where other means have failed.14 In the same way that building a road will not automatically result in a bus service, ICT also requires investment in services and skills development to be an effective tool for growth in the hands of any community. Investing in technology without also supporting skills development risks limitations in production output and a lack of return on investment. In other words, if we don’t train people and adapt businesses to make the best use of technology, then its use may be limited to nothing more than sharing pictures on social media. Rates of online work are higher in the USA, Japan and Western Europe than in other parts of the world Login or logout, February 2015 Page | 8
Similar issues exist in business, as connectivity alone is not enough to realise a competitive advantage, but needs to be followed up by a sequence of steps which enables a business to learn about, connect to and use ICT effectively (Figure 1).15 In this way, investment in infrastructure must be followed up by the provision of services to suit user needs. Users then need to be made aware of the potential offered by these services and adopt them into their business model. Competitive advantage is only maximised as the ICT connectivity, workforce skills and business supports are effectively combined to benefit the business model. Drivers of the rising trend in mobile working include increased employer recognition of savings through substantially improved productivity, better customer service outcomes, reduced facility costs, lower absenteeism, and decreased staff turnover.16 Benefits for employees include better work/life balance, and a gain of approximately 15 days per year in personal time from reduced commuting (if working in a 50/50 home and office-based role).17 In the USA, approximately 34 million people (17 million employees and 17 million self- employed contractors) had worked from home or remotely for at least one day per month in 2008.18 This was an increase of 43 per cent since 2003.19 Japan has the second highest proportion of mobile workers, with an estimated 74.5 per cent of the workforce forecast to be engaged in mobile working by 2013.20 Western Europe had approximately half of its workforce engaged in mobile working.21 Other countries and regions typically have much smaller mobile workforces. In 2008, this was estimated at 13.5 per cent of each workforce in Canada, Central and Eastern Europe, Latin America, the Middle East and Africa22. Despite the lower proportion, growth for these countries was anticipated at a rate of four per cent between 2008 and 2013.23 Figure 1: Necessary steps required to enable a competitive advantage to be realised from ICT development 24 Login or logout, February 2015 Page | 9
Australian Trends in Digital Access for Work
Many Australian businesses have embraced the use of digital technology to enable employees
to work from home or other locations. This can be used in a variety of ways, such as through a
formal work from home arrangement, enabling casual working from home on days when
needed, accessing emails and data from client offices or other work locations, or to catch up
on work after normal office hours. Other businesses use digital technology as a core part of
their business model, particularly through internet-based delivery of goods and services.
Digital access arrangements are more common in medium and large businesses than in small
and micro businesses (Figure 2). In other words, 77 per cent of businesses with 200 or more
employees have ICT systems in place that enable working from home, compared to 34 per
cent of businesses with 5 to 19 employees. Similarly, 82 per cent of large employers have ICT
facilities in place that enable employees to work from other locations outside the main office
(other than at home) compared to 32 per cent of businesses with 5 to 19 employees.
The data does not indicate how many employees in each workplace are able to work at home
or other locations. The trend for higher participation by large to medium employees is likely
linked to factors such as the capacity to provide remote ICT access, the variety of suitable job
roles available within the organisation, and the type of business undertaken.
90.0
80.0
70.0
60.0
Percentage
50.0
40.0
30.0
20.0
10.0
0.0
0–4 employees 5–19 employees 20–199 employees 200 or more
employees
Business size by number of employees
Businesses who enable employees to work from home
Businesses who enable employees to work at locations outside of main workplace other than home
Note: Categories are not exclusive, as businesses can have employees who both work at home and at other
locations, therefore totals will add up to more than 100 per cent
Figure 2: Business use of ICT to enable people to work away from office by business size in 2011-12 25
Login or logout, February 2015 Page | 10There is little variation in the distribution of businesses by employee size when businesses in
regional Western Australia are compared to the Perth metropolitan area (Figure 3). This
means that any variation between regional businesses and metropolitan businesses is more
likely to be related to issues such as capacity to offer remote ICT access, the type of work
undertaken by the business, or reluctance to enable remote working due to other factors.
70.0
60.0
50.0
Percentage
40.0
30.0
20.0
10.0
0.0
No employees 1-4 employees 5-19 employees 20-199 200 or more
employees employees
Business size by number of employees
Regional Western Australia Perth metropolitan region
Figure 3: Comparison of businesses based in Western Australia by location and number of employees 26
Enabling digital access for employees is more likely to occur in some industries than others in
Australia. It is not possible to determine the extent of use provided to different groups of
employees within any particular industry due to limitations in available data. It is likely that
digital access is limited to particular roles and/or management levels in some businesses
rather than equitably enabled for all employees regardless of job role. Other businesses or
industries may provide equal access for all employees.
Additionally, a business may use a digital arrangement to access business services, even
though the operational side of the business depends heavily on face to face interaction.
Business and financial services, such as accounting, banking, communications and marketing are
needed across the business spectrum, regardless of the particular industry. These issues are
explored in greater detail for the Western Australian context later in this report.
Login or logout, February 2015 Page | 11Opportunities for Growing Regions The future of regional economies will depend upon growing technological capacity. Regional areas must offer competitive advantages and work to attract the attention of potential investors to realise the productivity benefits associated with online work. In addition, online work influences regional development by changing the characteristics of workforce supply and demand. This is achieved through widening employment markets, improving opportunities for existing businesses, and attracting new skilled workers and business people into regions. Widening of Employment Markets Online work expands the employment markets in regional areas, effectively untying operationally-suitable jobs from the limitations of local market capacity. This brings both potential risks of job loss and benefits of job gain to regions. Jobs which do not depend on a particular place can be relocated from a region to a city and vice versa. The main prospects for regional growth exist in the realisation of latent workforce skills. People living in regional areas may have skills and experience for which there is no local market. Online work offers a potential option for people who have specialist skills or qualifications to improve their earning capacities by working in a non-local field or industry without having to relocate or engage in long distance commuting. It also allows people to take on additional work, beyond that available in the local market areas without a productivity loss due to increased commuting time. Approximately six per cent of workers in Western Australia in May 2013 indicated that they were underemployed (i.e. available to work more hours than they currently do).27 Better use of existing workforce capacity provides flow-on benefits to regions as incomes increase due to the additional hours in employment. Online work may also help to reduce the risk of long term unemployment, as employment is not dependent upon limitations in capacity in local job markets. The average time for people to be out of the workforce is longer in regional areas than for those in metropolitan areas, with a national average of 7.6 years out of work compared to 5.9 years for metropolitan people.28 While this may not reflect the recent experience of many regional areas in Western Australia, given the high demand for labour from the mining boom, it may be a relevant issue for those regional areas without a substantial mining industry who may have pockets of long term unemployment due to structural adjustment. Capacity for online work could also help to address local labour market adjustments in the future. Login or logout, February 2015 Page | 12
Online work also widens the regional employment pool available to employers. For example, the home-based nature of teleworking often allows people with care responsibilities, mobility restrictions (e.g. no drivers’ license or car), disabilities, or health issues, who would otherwise be unable or limited in their ability to attend a workplace to return to the workforce.29 30 This is potentially beneficial to local economies, as improved earning capacity has some flow-on benefits at a local level. Impacts at a broader economic level would be limited by the individual nature of teleworking arrangements. Improving Opportunities for Business Online work offers potential for growth in regional areas because it can promote more efficient ways of doing business in regional communities. This is achieved through productivity increases and improved cost efficiencies. Improved productivity is often a primary gain for employers. The increased flexibility and lack of commuting time enabled by a teleworking position, for example, often enables an employee to be able to offer an employer more hours than they would otherwise have available to work.31 There is also less time lost through absenteeism.32 Not needing to provide space within the main office for additional employees can substantially reduce overhead costs for many employers, even when computing and other office equipment is supplied to the external worker.33 This may be particularly useful to regional employers if they have a need to expand the business, but are at capacity within their existing premises and wish to avoid the high costs of moving to larger premises. The use of video-conferencing, VOIP34 and virtual environments can ensure the inclusion of external workers into meetings, training and other corporate activities.35 Similarly, moving to an online work employment model can greatly expand the services reach for businesses within a wider geographic area36. Having a local or regional representative can often make the critical difference between making a sale and losing an opportunity to a competitor. An online work arrangement carries relatively low risk for testing market demand within a new space, particularly when compared to the cost of investing in new premises. Indeed a proven benefit of network-based business models is that they improve connectivity and capacity while also diversifying risk. Online work also creates opportunity for the establishment of microbusinesses in regional areas to deliver goods and services in the knowledge, retail or services sector. Opportunities for growth occur as these businesses are not restricted by demand levels generated by the local market. Similarly, microbusinesses utilising ICT enabled methods of production are also useful for people with specialist skills and knowledge. Specialist skills, such as radiology, mining, engineering, research or design, may have limited local demand, but have a higher level of global market demand. Login or logout, February 2015 Page | 13
Improving Competitiveness in Regions While online work creates opportunities for businesses it also creates increased competition within existing markets. This creates a level of risk for regional businesses, but also encourages them to identify areas of specialisation, develop their human capital, and invest in innovation to increase their competitive edge. Online work is likely to create a risk of structural adjustment in some locations. As online work unties the links for some types of work to be located in metropolitan areas it also unties the reason for other types of work to be located close to regional production sites. As employers are likely to establish remote operations centres and tele-centres near to large labour pools, it is important that regions ensure they can be competitive and actively work to attract new investment. Businesses will only locate jobs in regional areas if there is a sound commercial imperative to do so. Providing Opportunities for Population Growth If spatial ties are removed from job parameters, the factors influencing the location of a job or business shift to other factors, including cost-effectiveness, potential productivity gains, employer choice, and worker preference. This means that regional areas can improve their economic attractiveness by overcoming barriers to participation in the knowledge economy, and making the most of any existing latent potential which is presently hindered by technological exclusion. A resulting increase in opportunities for the development of new jobs and businesses would then work as an enabler for further regional population growth. Reduction of risk is also a factor in enabling people to make transitions into living in a regional area. Online work can open up regional areas to new residents, as people currently living in metropolitan areas can fulfil desires to move to (or return to) regional communities while retaining the security of their existing employment. 37 This is particularly important for people nearing retirement who can transition into regional living while retaining employment, either fully as an external worker or in a part-time external worker/part-time long distance commuter arrangement.38 Such arrangements can also benefit people whose partner has obtained regional employment and who may not have suitable local employment available for them. Online work also improves retention rates in regional areas, as employees are not forced to move to city areas if they wish to change employer or if a local business closes.39 40 This provides two flow-on benefits to regions, an economic benefit as external income is spent in the local economy and a population size benefit, particularly where retention extends to family members, which helps to maintain community infrastructure.41 Login or logout, February 2015 Page | 14
Peri-urban growth trends also offer increased opportunity for online work. Long distance
commuter commitments in time, transport costs and environmental impact can all be reduced
through a job split with a telecommuting component. This style of working offers substantial
productivity and cost-saving benefits to employers and employees, through reduction of the
time and costs associated with long commuter journeys. Part-time online work arrangements
have already been introduced through employer flexible working schemes in Western
Australia.
Industry Development Business Support
Workforce Mobility Lifestyle Opportunities
Online work offers a variety of development pathways
and growth possibilities for regional Western Australia
Login or logout, February 2015 Page | 15Types of Online Work and Potential for Development in
Western Australia
Technology can be used in different ways to meet individual workplace needs and industry or
market demands. Untying labour from spatial locations enables varying opportunities for both
workers and business owners in regional areas (Figure 4). The sort of work undertaken will
depend upon individual levels of knowledge and skills, and the existing potential for different
market opportunities to be realised. Different types of online work also have different labour
needs, some require access to larger labour markets while others do not.
Accessing
specialist
consultancy
services
Call-centres
(centralised
Telecentres or diffusive
or digital models)
hubs
available Telework
in regions
Using ICT to connect
to a workplace
Remote
operations
facilities
Micro-
businesses
working
from home
Figure 4: Main types of online work
Telework
Teleworking is the most straightforward form of online work, and is often the easiest for
employers to facilitate. Teleworkers are people who use ICT to stay connected to their
workplace and undertake work activity at a location different to their employer’s worksite,
often at home and sometimes on a regular basis.42
The development of mobile technology has enabled more connection with the office
environment outside of normal working hours. This access is increasingly available to a larger
proportion of the workforce. Informal teleworking includes people who log-in to the work ICT
system remotely to catch up on work or deal with heavy workloads that cannot be completed
within normal office hours.
Login or logout, February 2015 Page | 16In contrast, formal teleworking arrangements are undertaken by people who work on a regular basis from home, either part-time or full-time. Examples of the usefulness to businesses include finding employees with needed skills who don’t live locally, expanding the reach of the business without having the expense of establishing additional business premises, or keeping an employee connected to a workplace if they move further away (such as near retirees or partners of regional workers). Teleworking arrangements may also include workers who need flexible access on a temporary or permanent basis. This may be to meet family or caring responsibilities, to manage a period of illness or enable them to work with a disability, or to cope with a loss of transport capacity. Such arrangements may assist regional employers to maintain productivity, and reduce costs from knowledge loss due to employee turnover. Both formal and informal teleworking was reported by 24 per cent of businesses surveyed in both metropolitan and regional Australia in 2009.43 Teleworking had provided a benefit to these businesses through higher levels of business confidence, improved productivity, cost savings, and greater profitability.44 Smaller sized businesses tend to have a higher uptake of teleworking. In 2013, an estimated 39 per cent of all SMEs had enabled informal access for employees to use the internet to work away from the office.45 Formal teleworking across the entire workforce is less widespread. Approximately six per cent of Australian workers were estimated to have a regular arrangement to participate in telework.46 47 The Australian Government has a policy aim to double participation in telework for the Australian workforce by 2020.48 Yet, regional businesses were less likely to facilitate teleworking than metropolitan businesses. Only 21 per cent of businesses in regional areas reported using teleworking compared to 26 per cent of metropolitan SMEs in 2009.49 Additionally, half the number of businesses in regional areas compared to metropolitan businesses were planning to increase or introduce teleworking to further improve profitability and productivity.50 Of course, this may reflect the lower levels of industry and occupational suitability evident in some regional areas. Teleworking offers regional employers opportunities to increase productivity gains from employees, but importantly it also widens the employment pool. This can enable a regional employer to attract potential employees with needed skills from other towns or regions. It can also assist in the retention of valued staff who may be moving out of the local area. Teleworking is the most accessible level of online work for regions to introduce, but its relatively small scale does limit the size of potential economic benefits. Indirect benefits which can be realised by regions include increased employment opportunities for regional residents and reduced congestion for transport infrastructure. Login or logout, February 2015 Page | 17
Telecentres and Digital Hubs Telecentres and digital hubs are facilities offering space and services, such as office equipment, ICT connectivity and meeting rooms, which are available on an ongoing or ad-hoc basis to people engaging in business activity. Such arrangements can meet the needs of small business operators and not-for-profit organisations without access to capital to invest in their own or additional premises, those needing special facilities such as video-conferencing services, employees needing temporary access to facilities or secure connections while on the road, or local people wanting to reduce long commuter times. Telecentre or tele-cottage models were introduced in many places throughout the world in past decades, including Scandinavia and Ireland. These centres provided public access to ICT facilities and some level of education or user support. While many have fulfilled their role in providing access and education, most have not evolved to a self-funding model, with many closing when public funding ended.51 The Community Resource Network in Western Australia is comprised of over 100 community resource centres (CRCs) based on the telecentre model.52 The role of the CRCs is “to provide access to government and community services and information, and undertake community, business, and economic development activities”.53 The CRCs have moved to a service-delivery approach following a review of this network in 2013.54 Digital hubs and smart work centres are an international innovation which could be adapted for use in regional development in Australia.55 Digital hubs support the digital, office and meeting space needs of businesses in a region, with an emphasis on flexible and collaborative use of space and equipment.56 Access to workspaces and facilities can be negotiated using a membership system or can be simply hired as needed. In contrast, smart work centres offer a fully serviced cooperative work environment mostly aimed at teleworkers employed by larger organisations.57 Smart work centres are usually in decentralised locations, often in outer metropolitan areas or nearby regional centres. Similar models already exist in metropolitan Australia. Dialogue is a corporate digital hub which has recently been established close to Parliament House in Canberra.58 This facility provides a range of digital access equipment, meeting rooms and serviced office space, and is coordinated by a business concierge. The market for Dialogue’s services includes visiting corporations, small organisations establishing a Canberra presence, and locally-based businesses needing extra meeting space or access to video-conference facilities. The facility is owned by ISPT, a property fund manager which specialises in creating high quality commercial property. Login or logout, February 2015 Page | 18
A key part of each digital hub is the curator or concierge whose role is both functional and
social.59 This person works as a coordinator to manage the facilities, but also plays an active
role in recruiting tenants and hub users. They also promote the culture of the digital hub as a
place for business development, through activities and events which create opportunities for
creativity, connection, and collaboration among the local and visiting business community.
The benefits of the digital hub model have been investigated as a regional development
opportunity by Regional Development Australia (RDA) organisations in South-East Queensland.
This review has determined the benefits of the model lie in improved productivity for regional
businesses and employers, as well as working as a stimulation for higher competitiveness.60 A
digital hub will:
Offer facilities with low overheads from economies of scale to very small
organisations, such as business start-ups and entrepreneurs;
Create benefits from clustering and knowledge sharing;
Provide an environment which meets occupational health and safety requirements;
Be less isolating than ‘work at home’ models, but still lower commute times compared to
travelling to a central business district; and
Administer a professionally structured and supported ‘work’ environment to support
business development.61
The establishment of digital hubs requires a high level of connectivity, availability of suitable
premises, and access to appropriately skilled labour to manage ongoing business and
technical needs. It also requires access to, or potential to develop, a sufficient level of demand
from business within a region, to ensure the ongoing viability of the business.
Digital hubs can be established with seed funding or supported by initial tenancy
arrangements from government, but the best benefit to regional economies is more likely to be
achieved by establishing hubs in locations where a substantial existing business base can
provide a commercially viable level of return on investment within the short to medium term.
Login or logout, February 2015 Page | 19Call-centres Call-centres are large-scale commercial ventures which operate services for government departments and other businesses. They provide information and customer services to the general public or a customer base using the telephone or internet (i.e. no face to face work). Employees are not required to have high skill levels, with training in customer service provided in-house.62 As call-centres are not tied to a specific area, there is high potential for these centres to be located in regional areas. Research in Australia indicates that low overheads, high local availability of labour, and lower labour churn are all positive factors associated with the establishment of call-centres in regional areas.63 Still, the labour requirements of call-centres tend to limit them to establishment in larger regional towns and cities, and the service model is facing increasing competition from cheaper labour availability in offshore locations.64 Regional establishment of call-centres has already been an attractive option for the Australian Government. One such example is the Centrelink national rural call-centre located in Maryborough on the Fraser Coast in Queensland. This call-centre employs over 140 people and has been in operation since 2000.65 Call-centres are most commonly used by industries such as government services, telecommunications, insurance brokers, and financial services organisations. They can also provide sales or services support for manufacturers, retailers or wholesalers. Another common use for call-centres is for telephone market research activities and fundraising for charities. These businesses can operate in both a centralised or diffuse business model. The centralised model places a number of employees in a single work location. These centres may work for a single employer or provide services for multiple contracting organisations. In contrast, the diffuse system allows an employer to divert calls to a telephone located in the employee’s home or pay for calls made. The diffuse model is usually more suited for small volume work- loads and outbound work, such as fundraising calls and social research surveys. Both types of models offer potential for regional development. Cheaper commercial premises and an available labour force in some regional areas can be attractive for potential employers. In contrast, diffuse models tend to appeal to smaller businesses in regional areas who need more sales and customer services support, but don’t have room to expand workstations in their existing premises. Login or logout, February 2015 Page | 20
Remote Operation Facilities
Remote operations facilities are another example of emerging trends in online work. The
needs of resources, defence, aerospace and energy industries has led to the development of
remote operation technologies which enable equipment and systems at distant sites to be
operated at a centralised location.66 These facilities are particularly important in the Western
Australian economy, being a key driver of regional employment in many areas and a
substantial component of the State’s export income.
Remote operations facilities can reduce costs and make it easier for companies to locate work
nearby to available sources of labour supply. The current trend in Western Australia is for
these facilities to be located in light industrial areas in the Perth metropolitan area. This
effectively removes jobs from regional areas. It also reduces the demand for services to
support employees located in regions, such as transport, food and accommodation, which
creates a negative impact from the loss of income to local businesses in regions.
The potential for regional towns and cities to be sites of remote operations rests on several
factors of availability:
A suitable labour force to meet the employer’s needs;
Premises that offer the facilities and services needed at a rate that is competitive; and
High capacity and high speed ICT connectivity.
Current examples of Australian remote operations centres include:
Rio Tinto’s operations centre in Perth directs activity over 1,500 kilometres away
including remote controlled haul trucks, drills to extract ore and driverless trains to
carry the ore to port for export;67
Hancock Prospecting’s Roy Hill operations centre in Perth controls mining, processing,
rail and port operations located in the Pilbara region;68
BHP’s Integrated Remote Operations Centre established in Perth in early 2013 to
control processing and driverless trucks;69
Ron Finemore Transport has an operations centre in Wodonga in Victoria, which
manages a national fleet linked by GPS vehicle monitoring systems;70
Egg production and serum manufacturing facilities in Murrindindi Shire in Victoria,
which are maintained remotely from Sweden;71 and
Broadcast Australia’s network operations centre in Sydney which manages over 580
unmanned telecommunications sites in Australia.72
Login or logout, February 2015 Page | 21Home-Based Microbusinesses Online work also has potential to expand the range of microbusinesses (businesses with zero to four employees) currently in regional Western Australia. These businesses can be service- based or goods-based. Establishment of a microbusiness does not necessarily depend upon holding a particular qualification and has potential across many different industries. Online retail offers potential for the development of microbusinesses in regional areas. Both consumers and businesses in regional Australia have embraced online shopping. In 2011, 70 per cent of people living in remote locations made a high number of purchases online, compared to 63 per cent in major cities.73 A key benefit for regional business is that online retailing enables them to access larger markets. Approximately two-thirds of all SMEs in Australia took online orders in 2011.74 Furthermore, small businesses in regional areas in Western Australia were more likely than their metropolitan counterparts to generate income from online sales of goods and services. 75 Improved ICT capacity has been accompanied by the development of accessible online payment systems (e.g. PayPal). The increased trade flow has resulted in the expansion of parcel services delivery contractors (e.g. Australia Post Express Post, DHL, FedEx). These factors have combined to reduce costs, enabling many regional businesses to improve their competitiveness in cost, convenience and security of supply. Lower overheads has seen mail order businesses become a growing industry in a number of regional areas, particularly in niche or artisan areas of trade. These businesses may be an expansion of an existing regional shopfront to service a wider national market, such as ShoeBeDoo in Bunbury, or work as an information gateway to numerous small providers based in regional areas, such as the Australian Regional Food Guide and Country Culture websites. Service based businesses, in particular, often have low barriers for entry when starting an ICT- enabled business from home.76 Most require only a good level of connectivity, and a reasonable level of ICT hardware and software. Business promotion can also be achieved relatively cheaply by using online advertising and social media strategies to promote a new business. Research in Australia indicates that there is high market potential for the future development of small regional businesses offering ICT-based business services (particularly in accounting, software services, and creative design services which are currently scarce in regional areas). 77 Login or logout, February 2015 Page | 22
You can also read
