A national digital divide continues to exist in Australia and there is not an equitable realisation of the benefits of digitisation, according to the Cisco Australian Digital Readiness Index 2022.

The Digital Readiness Index is a global study conducted by Cisco which measures the ability to capture the opportunities that digital capabilities and investments create in a country, state, or territory, and is directly tied to other measures of a country's performance.

Australia has dropped in its global digital readiness rank to 16th place across 146 countries. Previously, Australia ranked in 12th place in 2019. The local Australian index measures the states and territories, against similar criteria and reveals shifts in digital readiness.

This Index is a holistic approach to measure across seven components: Basic Needs, Human Capital, Business and Government Investment, Ease of Doing Business, Start-up Environment, Technology Adoption and Technology Infrastructure. This is the third iteration of the report and the first since the global pandemic.

A nation digitally divided

The examination of digital readiness scores across each state and territory shows close groupings between them on many components, with one significant outlier.

The Australian Capital Territory retained its leading position as Australia's most digitally ready state or territory, due to ranking 1st in Business & Government Investment and Human Capital.

New South Wales moved ahead considerably gaining ground on the nations capital, thanks to scores in Basic Needs and Start-up Environment, the latter reflecting the state governments commitment to growing its start-up ecosystem.

Victoria maintained its 3rd placed ranking and now leads the nation in Technology Adoption, where it rose from 4th place thanks to a 10-percentage point increase in broadband services in operation and having the equal highest percentage of businesses with staff working from home.

South Australia was most improved, jumping three positions to 4th due to the states improved score for Ease of Doing Business rising to 1st place nationally, while its score for Technology Adoption climbed from 7th to 4th.

Western Australia dropped from 4th to 5th, due partly to a fall in score for Business & Government Investment.

Queensland retained 6th place, due to placing 3rd for Human Capital, where it rose from 5th position due to a 4.4 percentage point gain in labour force participation.

Tasmania dropped from 5th place to 7th, primarily due to a decline in its score for Ease of Doing Business. Although the state retains the highest business survival rate in the country, the massive drop in business confidence dragged its score down.

The Northern Territory was ranked in the lowest category (Amplify Low), reflecting recognised social and economic challenges within the territory and reveals the continued widening national digital divide.

Resilient, sustainable, equitable our digital readiness opportunity

The Digital Readiness Index highlights the need for accelerated and continued investment. Ben Dawson, Vice President, Cisco Australia and New Zealand says the report reveals that simply maintaining investment levels can still see a nation, state, or territory overtaken by its peers.

"Digital readiness helps us to understand how different nations, states, and territories are performing and measure their progress towards creating a more prosperous and digitally inclusive society," he says. 

"We can also understand the improvements that are needed to maintain or boost performance.

"Australia continues to be amongst the highest-ranked digitally ready nations but cannot afford to stand still. Maintaining existing investment levels puts us at risk of falling behind other countries and increasing the national digital divide," Dawson says.

"As digitisation continues to accelerate, the report highlights the continued need for Australia to focus and invest across all the digital readiness components to capture the opportunities of a resilient, sustainable, and equitable society," he says.

"While it is always difficult to predict the future, one forecast that can be made with certainty is that the digital skills and infrastructure required by Australia today will be insufficient for the challenges and opportunities that lie ahead."