Cities are main eWork magnets in Australia

Thanks to a grant from the Australian Government’s Department of Transport and Regional Services and contributions from Edith Cowan University, in Perth, it has been possible to replicate the European work of the EMERGENCE project in Australia. The results of the Australian employer survey have now been analysed and will be available from the EMERGENCE website. As can be seen in Table 1, 27 per cent of employers in Australia practice some form of eWork. Twelve per cent have remote employees, whilst nearly one establishment in six has eOutsourcing arrangements with a separate firm and one in twenty uses self-employed individuals.

Peter Standen, Edith Cowan University

The survey covered all sizes of establishments right across the economy. Figure 1 shows that eWork using employees is much more likely to be practiced in the largest organisations, steadily diminishing with establishment size, with the exception of fully home-based employees. Here, as in Denmark and Ireland (where EMERGENCE has also carried out surveys of small establishments) we find the opposite trend, with very small organisations being the most likely to use this form of eWork. Small firms are also less likely to practice eOutsourcing, but here the size differences are less; medium-sized firms (with 51-200 employees) are actually more likely to eOutsource than very large organisations (those with over 200 employees).

Nearly one in six establishments (15.4 per cent) is a supplier of eServices, and there is only a minor increase in the representation of larger compared to smaller establishments in this. When the demand and supply-side figures are aggregated, 31.5 per cent of Australian establishments are estimated to be involved at one or other end of an eOutsourcing relationship. Considering the broader phenomenon of eWork from both supply and demand sides, we find that the proportion of Australian establishments with some form of eWork is 37.6 per cent, rising from 36.5 per cent of small firms, through 44.4 per cent of medium ones to 53.6 per cent of large firms. The firms using or supplying eWork employ about 43 per cent of the Australian workforce.

A comparison with Europe (shown in Figure 2) shows some interesting differences. Levels of eOutsourcing are considerably lower; but forms of eWork using employees are significantly higher than the European average. This pattern is closer to that of countries in Northern Europe than of Mediterranean and Central and Eastern European countries.

The regional dimension

eWork carries the promise of regenerating remote rural regions: a major issue for Australian policy-makers. However, the survey found rather little evidence of new employment being created away from the main metropolitan centres.

Where work was outsourced, eOutsourcing was around twice as likely to involve a supplier in the same town as one in another town. When the demand for eOutsourcing was analysed, only 4 per cent of establishments used an international eSupplier. There was some evidence of regional concentration in Melbourne and to a lesser extent Hobart, and no evidence that non-metropolitan areas have yet gained much advantage from eOutsourcing. Capital cities account for 77.2 per cent of eService supplier locations but only 60.7 per cent of Australian business registrations.

The view from the supply side was similar. The location of suppliers showed an overemphasis on Melbourne and Brisbane, compared to business registrations, and non-metropolitan establishments supplied metropolitan customers over twice as frequently as the reverse pattern. Offshore destinations were reported by 1.4 per cent of establishments and comprised 7.8 per cent of the instances of eService supply, with the US and the UK being the major destinations.

In the case of remote back offices, the location tended to follow the distribution of registered businesses, except that Victoria had a stronger concentration and Queensland had fewer than expected. Nevertheless, there was some evidence of specialisation in non-metropolitan areas, with strengths in the supply of software development services, but less ability to supply other functions.

Remote offices were in other towns or cities in 71 per cent of cases, interstate in 44 per cent of cases and offshore (in New Zealand) in one instance. Although rural areas are often seen as cheap, the survey found remote office work was twice as likely to be sent from a rural office to a metropolitan one rather than in the reverse direction; advantages such as availability of expertise, proximity to other parts of the business, or proximity to customers (the most frequent reasons given) outweigh those of cheap labour or building costs in many cases.

Despite this, the authors conclude that non-metropolitan businesses have a real chance to compete in this new market if the levels of education and infrastructure are adequate. ‘Policy makers and regional authorities should consider what other skill areas can be developed in rural regions’, says Peter Standen, ‘We have found anecdotal evidence of engineers, graphic designers, agricultural science specialists, mining support staff and university lecturers working as teleworkers from remote regions, particularly in areas where cost and lifestyle benefits are available. Initiatives that target and develop regional knowledge work specialisations may help channel such individuals into more synergistic communities. We are hoping that the results of our forthcoming case studies will shed further light on these issues.’

He continues, ‘Our interpretation is that business operates as much through social networks as ICT networks. Partnerships with remote employees or contractors have to be built up and maintained through face-to-face meetings, even if the day-to-day work is ICT-mediated. Even if ICTs completely liberate managers facing locational choices, they must still have the knowledge and contacts to find remote suppliers or facilities and the confidence to begin working in a different way. Some findings in this study are consistent with the notion that SMEs in particular lack the social capital to initiate remote working arrangements. Many managers in all areas lack the knowledge and resources to develop business relationships in rural regions or in other countries.’