An economic forecasting model developed by Australia’s National Institute of Economic and Industry Research at the behest of IBM, which was published yesterday, has been used to predict how organisations which embrace technology early will fare out to 2025, and the extent to which technology “followers” will lag. It provides CIOs with plenty of ammunition to argue for extra ICT funding.

The NIEIR argues that by 2015 most business sectors will have been substantially affected by global digitisation, and only the early movers could expect to benefit from the “compounding” effect of innovation which would prove impossible for laggards to match.

IBM managing director for A/NZ, Andrew Stevens, said that many organisations were still adopting a wait-and-see approach in terms of investing in IT to prepare them for the nascent digital economy but warned that business now faced a “tipping point where the risk of inaction outweighs the risk of action,” and that those organisations which waited might find it impossible to catch up in the future.

Reinventing Australian enterprises for the digital economy, which can be downloaded from ibm.com.au, makes for sobering reading. It applies the NIEIR model to hypothetical organisations in seven industry sectors, and then plots their fortunes for the next 12 years.

For example, a “leader” bank with $15 billion in revenues today, and a “follower” bank with $12 billion of current revenues should expect their revenues to diverge massively to $32 billion and $17 billion respectively. Over the same period the market capitalisation of the leader bank would rise to $69 billion, while the valuation of the follower would actually shrink to $22 billion by 2025.

Two retailers meanwhile, each with $25 billion total sales today, would diverge to the extent that by 2025 the technology leader’s revenue soars to $123 billion while the follower falls back to $17 billion. The report performs similar analysis for enterprises in mining, telecommunications, public administration, healthcare and higher education.

Dr Peter Brain, founder and executive director of NIEIR, said six technology mega trends were impacting all businesses, namely: ubiquitous high speed broadband; cloud computing; big data and analytics; mobility; interface and collaboration technologies; and, intelligent systems, sensors and robots.

Jenifer Westacott, chief executive of the Business Council of Australia, said that boards now needed to challenge their thinking and determine whether they had the technology skills and the imagination to ensure they were leaders rather than laggards