3.2 The Terms of Reference for this Inquiry refer to the ‘importance of the digital economy and the opportunities for innovation leading to national economic and cultural development created by the emergence of new digital technologies’.
3.3 The digital economy has been defined as ‘the global network of economic and social activities that are enabled by information and communications technologies, such as the internet, mobile and sensor networks’. It is not separate from the general economy, and is intrinsic not only to commercial transactions but also to education, health services, social services, paid and unpaid work.
3.4 Australia has made a commitment to becoming a leading digital economy. Digital technology, including search functions, cloud-based solutions and other digital platforms, provides savings and efficiencies for individuals, businesses and governments, increasing wealth in real terms and driving further economic growth. Stakeholders generally agreed that ‘participation in the digital economy is likely to be a critical source of innovation for Australian firms and consumers’.
3.5 A Department of Innovation, Industry, Science and Research Report has called for Australia to remove barriers to digital content and service uptake, or ‘risk falling behind the rest of the world’.
3.6 It is not possible to anticipate what new technologies will emerge over coming years and decades. What is clear is that copyright will have a direct and indirect impact. Copyright law is an important part of Australia’s digital infrastructure, and has a profound influence in ‘regulating access to education, culture, social interaction, commercial innovation and the provision of essential government services’.
3.7 Copyright law requires reform in order to facilitate the commercial and cultural opportunities of the digital economy. Universities Australia submitted:
It is therefore imperative that Australia puts in place an intellectual property framework that supports rather than hinders investment in the digital economy and that is sufficiently flexible to provide breathing space for the research and development that is essential to innovation without the need for constant readjustment.
3.8 Economists have warned of the
moral hazard effect on incumbent firms; that copyright in itself can create an incentive for existing industries to rely on law enforcement to protect their business model, rather than to adopt new technologies.
3.9 The recommendations in the Report are aimed at equipping Australian copyright law to serve more effectively the needs of Australia and Australians in the digital environment.
Department of Broadband, Communications and the Digital Economy, Australia’s Digital Economy: Future Directions (2009).
National Library of Australia, Submission 218.
Department of Broadband, Communications and the Digital Economy, Australia’s Digital Economy: Future Directions (2009), 2.See also K Henry, ‘The Shape of Things to Come: Long Run Forces Affecting the Australian Economy in Coming Decades’ (Address to Queensland University of Technology Business Leaders’ Forum, Brisbane, 22 October 2009), cited in ADA and ALCC, Submission 213.
AIMIA Digital Policy Group, Submission 261. See also AIIA, Submission 211.
Australian Industry Group, Submission 179. Google submitted that ‘Copyright needs to be “future-proofed”, making it more flexible and technology neutral. This will generate an economic benefit of $600m per annum in Australia’: Google, Submission 217.
Department of Innovation, Industry, Science and Research (DISSR) (2011), Australian Innovation System Report 2011, 3, referred to in Australian Industry Group, Submission 179.
ADA and ALCC, Submission 213. See also Foxtel, Submission 245, Ericsson, Submission 151.
Universities Australia, Submission 246. See also Google, Submission 217; Powerhouse Museum, Submission 137; Pandora Media Inc, Submission 104.
R Towse, ‘What We know, What We Don’t Know and What Policy Makers Would Like Us to Know About the Economics of Copyright’ 8(2) Review of Economic Research of Copyright Issues 101, cited in Ericsson, Submission 151. See also Australian Research Council Centre of Excellence for Creative Industries and Innovation, Submission 208.