The report is based on analysis of three innovative economies – Sweden, Singapore and Canada – with modelling of the economic benefits that digital technologies and innovation could deliver.
Economist and PwC partner Jeremy Thorpe said building and sustaining an ecosystem that combines digital technologies and innovation has the potential to increase Australia's GDP by as much as $37 billion in 2024.
“In the longer term that contribution could be as high as a 3.5 per cent increase in GDP in 2034, or $136 billion in dollar terms," he said.
"It could also play a significant role in reducing the federal Budget deficit, which currently stands at $47 billion, by around $24 billion in 2034; and on top of that create close to 540,000 new jobs in the same period."
Building an ecosystem of innovation starts with a more balanced investment between physical asset industries such as manufacturing, construction and agriculture and knowledge-based industries such as health, technology and biotech, according to PwC.
PwC's head of innovation and digital ventures, partner Trent Lund, said that for the past 50 years Australia has invested more heavily in physical asset industries, neglecting some knowledge-based sectors.
“If we want to grow our productivity, that investment needs to be more evenly balanced and at an appropriate pace in areas of growth, not decline.
"Innovation is happening in Australia, but government, business and academia need to work more collaboratively and focus on three key areas of policy and investment: venture capital, research and development (R&D) and education if innovation is to be more than just a good idea," Mr Lund said.