ECONOMICS AND INDUSTRY STANDING COMMITTEE THE STATE GOVERNMENT'S ROLE IN DEVELOPING AND PROMOTING INFORMATION COMMUNICATIONS TECHNOLOGY (ICT) IN WESTERN AUSTRALIA Report No. 6 in the 37 th Parliament 2007 ECONOMICS AND INDUSTRY STANDING COMMITTEE Published by the Legislative Assembly, Parliament of Western Australia, Perth, June 2007. Printed by the Government Printer, State Law Publisher, Western Australia. Economics and Industry Standing Committee The State Government's Role in Developing and Promoting Information Communications Technology (ICT) in Western Australia ISBN: 1 921355 10 3 (Series: Western Australia. Parliament. Legislative Assembly. Committees. Economics and Industry Standing Committee. Report 6) 328.365 Copies available from: State Law Publisher 10 William Street PERTH WA 6000 Telephone: (08) 9321 7688 Facsimile: (08) 9321 7536 Email: [email protected] Copies available on-line: www.parliament.wa.gov.au ECONOMICS AND INDUSTRY STANDING COMMITTEE THE STATE GOVERNMENT'S ROLE IN DEVELOPING AND PROMOTING INFORMATION COMMUNICATIONS TECHNOLOGY (ICT) IN WESTERN AUSTRALIA Report No. 6 Presented by: Ms J.A. Radisich, MLA Laid on the Table of the Legislative Assembly on 14 June 2007 ECONOMICS AND INDUSTRY STANDING COMMITTEE COMMITTEE MEMBERS Chair Ms J.A. Radisich, MLA Member for Swan Hills Deputy Chair Mr G.A. Woodhams, MLA Member for Greenough Members Hon. Dr J.M. Edwards, MLA Member for Maylands Mr M.P. Murray, MLA Member for Collie-Wellington Mr A.J. Simpson, MLA Member for Serpentine-Jarrahdale COMMITTEE STAFF Principal Research Officer Dr Loraine Abernethie, PhD from 20 November 2006 Ms Jessica Shaw, BA (Hons) LLB(Hons) from 10 July 2006 to 27 September 2006 Research Officer Mr Peter Frantom, BA from 12 February 2007 Ms Jovita Hogan, BA (Hons) to 31 January 2007 COMMITTEE ADDRESS Economics and Industry Standing Committee Legislative Assembly Tel: (08) 9222 7494 Parliament House Fax: (08) 9222 7804 Harvest Terrace Email: [email protected] PERTH WA 6000 Website: www.parliament.wa.gov.au - i - ECONOMICS AND INDUSTRY STANDING COMMITTEE TABLE OF CONTENTS COMMITTEE MEMBERS............................................................................................................ i COMMITTEE STAFF.................................................................................................................... i COMMITTEE ADDRESS ............................................................................................................. i COMMITTEE’S FUNCTIONS AND POWERS...........................................................................v INQUIRY TERMS OF REFERENCE ........................................................................................ vii CHAIR’S FOREWORD................................................................................................................ix ABBREVIATIONS AND ACRONYMS......................................................................................xi EXECUTIVE SUMMARY ....................................................................................................... xvii FINDINGS............................................................................................................................... xxvii RECOMMENDATIONS............................................................................................................. xli MINISTERIAL RESPONSE..................................................................................................... xlix CHAPTER 1 INTRODUCTION..................................................................................................1 1.1 THE COMMITTEE.............................................................................................................1 1.2 CONDUCT OF THE INQUIRY .........................................................................................2 1.3 BACKGROUND TO THE INQUIRY ................................................................................3 1.4 DEFINITION OF ICT.........................................................................................................4 1.5 THE INDUSTRY ................................................................................................................5 (a) Australia........................................................................................................5 (b) Western Australia..........................................................................................7 1.6 TRADE IMPERATIVES ....................................................................................................8 (a) Australia........................................................................................................8 (b) Western Australia........................................................................................10 1.7 WHY GOVERNMENT INTERVENTION IS NECESSARY..........................................11 1.8 SUBMISSIONS AND INDUSTRY ASSOCIATIONS ....................................................14 CHAPTER 2 THE NATURE OF ASSISTANCE AVAILABLE TO BUSINESSES TO DEVELOP ICT ....................................................................................................15 2.1 FEDERAL GOVERNMENT INITIATIVES....................................................................16 (a) Research Focussed: Creating New ICT Ideas and Products .......................18 (b) Commercialisation Focussed: Developing ICT Business through Providing Advice and Capital.....................................................................25 2.2 WESTERN AUSTRALIAN GOVERNMENT INITIATIVES.........................................34 (a) Infrastructure...............................................................................................36 (b) Commercialisation Focussed Activities......................................................43 (c) Programme/Initiative Specific Information ................................................44 CHAPTER 3 THE NATURE OF ASSISTANCE AVAILABLE TO BUSINESSES TO MARKET ICT......................................................................................................57 3.1 FEDERAL GOVERNMENT INITIATIVES....................................................................57 3.2 WESTERN AUSTRALIAN GOVERNMENT INITIATIVES.........................................67 (a) Small Business Development Corporation (SBDC) Programmes and Initiatives ....................................................................................................68 (b) Department of Industry and Resources Programmes and Initiatives ..........68 CHAPTER 4 THE EFFECTIVENESS OF SUPPORT GIVEN TO THE LOCAL SECTOR BY THE STATE GOVERNMENT...................................................81 4.1 STAGES OF THE FUNDING AND APPLICATION PROCESS ...................................81 (a) Finding Information....................................................................................82 (b) Applying for Funding .................................................................................83 (c) Processing of Funding Applications ...........................................................88 (d) Evaluation of the Funding Programme and Feedback to Participants.........90 4.2 ROLE OF THE OFFICE OF E-GOVERNMENT.............................................................92 4.3 PRO-ACTIVE GOVERNMENT.......................................................................................97 4.4 FACILITATING INTRODUCTIONS WITH VENTURE CAPITALISTS ...................100 - iii - ECONOMICS AND INDUSTRY STANDING COMMITTEE 4.5 STATE/FEDERAL COORDINATION OF GOVERNMENT ASSISTANCE PROGRAMMES.............................................................................................................110 4.6 ICT PORTAL..................................................................................................................110 CHAPTER 5 GOVERNMENT PROCUREMENT ...............................................................115 5.1 SIGNIFICANCE OF GOVERNMENT PROCUREMENT TO INDUSTRY.................115 5.2 FEDERAL GOVERNMENT ICT PROCUREMENT ARRANGEMENTS...................117 5.3 STATE GOVERNMENT ICT PROCUREMENT ARRANGEMENTS........................119 (a) Common Use Arrangements (CUAs) .......................................................120 (b) SPIRIT (Strategic Partnering in Resourcing IT).......................................121 5.4 ISSUES CONCERNING GOVERNMENT PROCUREMENT .....................................124 (a) Cost of Qualifying and Tendering ............................................................124 (b) Uncapped Liability and Professional Indemnity Insurance Levels...........126 (c) ICT Procurement and Supply Expertise....................................................135 (d) Government Agencies as Reference Sites ................................................138 (e) Buy Local and Building Local Industry Policy.........................................141 (f) Intellectual Property (IP) in Government Procurement ............................151 (g) Government Procurement and ICT Innovation.........................................166 CHAPTER 6 OTHER ISSUES DEEMED RELEVANT TO THE INQUIRY ....................171 6.1 EDUCATION AND SKILLS DEVELOPMENT ...........................................................171 (a) Background...............................................................................................171 (b) The Role of Education in Developing ICT Skills .....................................172 (c) Education Initiatives .................................................................................174