Cloud computing was worth between $9 billion and $10 billion to the Australian economy between 2022 and 2023, according to a new report. However, the continued migration of enterprise clouds and the boom in AI computing could increase its annual contribution to GDP to as much as $81 billion by 2029.
The report, endorsed by the Information Industry Association of Australia and compiled by DT Economics for Amazon Web Services, says Australia has seen a 300% increase in the cloud sector’s contribution to Australia’s GDP since 2007. Cloud computing also supports 47,000 to 56,000 jobs across the Australian economy, increasing productivity by 0.2% to 1.0% of GDP per year.
AIIA CEO Simon Bush called the cloud “a driver of national productivity and prosperity.”
The economic benefits of cloud computing are growing
ADAPT Research, an Australian technology research firm, has suggested that 55% of Australian organizations’ workloads will be hosted on public clouds by 2025. Meanwhile, Gartner has predicted that the share of Australian and global workloads in the cloud will grow to 70% by 2028.
The AIIA said that this rise in cloud services generated a compound annual growth in contribution to GDP of 10% between 2007 and 2023, now accounting for 0.4% of GDP. The report projects that the cloud industry will contribute $68 to $81 billion to the nation’s GDP by 2029, accounting for more than 0.5% of GDP.
Many Australian jobs are associated with cloud computing
The cloud computing industry supported up to 56,000 jobs in 2022-23, the report said. This represents a significant increase from an estimated 20,000 to 23,000 jobs in 2007–08. Forecasts indicated that cloud-related jobs would grow to between 71,000 and 84,000 in 2028–29.
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The report noted that these jobs include those employed directly by cloud service providers and many more across supply chains. The cloud will also facilitate regional job creation on a wider scale as more cloud storage is built in urban and regional areas across Australia.
Other benefits flowing to the economy from the cloud
According to the report, GDP or job numbers don’t capture several other productivity benefits from the cloud. The report says the benefits relate to more efficient use of labor and capital resources in the production of goods and services as the cloud is connected to business.
The report shows how the cloud’s ability to save energy leads to better local and global market access opportunities, better capabilities, cost savings, better operational resilience, reduced cybersecurity risks, and reduced energy and carbon emissions.
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AI powers the growth of the cloud
AI computing is another key and emerging cloud advantage for Australia. The AIIA said cloud computing service providers are supporting the integration of new technologies such as AI and machine learning across Australia’s public and private sectors, as evidenced by recent growth in AI.
AIIA urges caution in future regulation of cloud computing
The Securing Australia’s Cloud Potential report was produced in part to warn regulators against imposing strict rules on cloud service providers. This follows regulatory recommendations issued by the Australian Competition and Consumer Commission as part of its ongoing inquiry into digital platform services.
The ACCC has recommended implementing legally binding service-specific codes of conduct for certain designated digital platforms. These codes aim to address issues such as anti-competitive favoritism, tying of sales of one product to another and exclusive pre-installation agreements.
Bush explained that “Australia has at times focused on regulating technology rather than promoting innovation” and that “we need to strike a balance to protect citizens and consumers while encouraging creativity, investment and growth”.
He added that poorly designed regulations risk dampening the sector’s potential and undermining Australia’s position as a leader in the digital economy. “We need progressive regulation that enables, not burdens, the sector to remain at the forefront of global innovation.”