the second is a change in the industries in which investment is occurring. over recent times, one of the central themes in the rba's discussions with businesses has been the much greater use of information technology to increase productivity. among other things, we hear about the possibilities and the challenges of data analytics, machine learning, artificial intelligence, the better use of sensors to control production and the automation of processes and production methods. a similar picture emerges from a survey undertaken by ai group last year, where ceos were asked about their main investment priority for the year ahead. at the top of the list were investment in technology and the staff training that is needed to support that investment ( graph 4 ). next on the list was investment in research and development ( r & d ). further down the list was investment in physical assets. if we look back at previous surveys, it's clear that this focus on investing in technology has increased over time. graph 4 this is not to underplay the importance of investment in physical assets. this remains critical. we need places to work, live, shop and play, and investment in buildings & structures and machinery & equipment remains central to this. but increasingly, investment decisions in these areas are also often just as much about technology as they are about other things. in every industry – in manufacturing, mining, agriculture, the health sector and business services – businesses are having to make investments in information technology to remain competitive. this is changing the way we think about investment. tracking this shift in investment for the economy as a whole is complicated by some limitations in the available data. the abs does, however, publish separate figures for investment in buildings & structures, machinery & equipment and intellectual property ( graph 5 ). graph 5 these data show that over the past couple of decades, investment in intellectual property has grown noticeably faster and more consistently than investment in buildings & structures and machinery & equipment. this is particularly so since 2009 / 10. over this period, the weakness in overall nonmining investment is explained by there being almost no growth in investment in tangible assets. in contrast, investment in intellectual property has grown at an average rate of 5 per cent. following this sustained period of strong growth in investment in intellectual property, this component now accounts for around 20 per cent of total non - mining investment, in nominal terms. by way of comparison, this share was just 3 per cent in the early 1980s ( graph 6 ). conversely, the share of investment spending on machinery &

glenn stevens : australia ’ s economy against the background of recent global developments opening statement by mr glenn stevens, governor of the reserve bank of australia, to the house of representatives standing committee on economics, canberra, 24 august 2012. * * * since the meeting we had in february, assessments of the global and local economies have waxed and waned. in february, sentiment about the international financial system was recovering somewhat, after a scare late in 2011. the actions of the european central bank in extending its liquidity provision to euro area banks had taken major re - funding hurdles out of the picture for a time. this was a critically important action that bought time. it was clear that the european economy had slowed, that the united states was still growing, but at only a modest pace, and that china ’ s growth was moderating to something more sustainable. but high - frequency indicators of the global business cycle were stabilising. so even though forecasts for global growth were at that stage being marked down a bit, we did not seem to be seeing a slump of the kind seen in late 2008. subsequently, there were actually some small upward revisions to global growth forecasts. but, as we said at the last hearing, sorting out the problems in the euro area is likely to be a long, slow process, with occasional setbacks and periodic bouts of heightened anxiety. we saw one such bout of anxiety in the middle of this year, when financial markets displayed increasing nervousness about the finances of the spanish banking system and the spanish sovereign. the general increase in risk aversion saw yields on bonds issued by some european sovereigns spike higher, while those for germany, the uk and the us declined to record lows. this “ flight to safety ” also saw market yields on australian government debt decline to the lowest levels since federation. meanwhile, many european economies saw a further contraction of economic activity. share markets declined sharply. over the past couple of months, assessments of near - term global growth, having gone up a bit between february and may, have been marked back down. bodies such as the international monetary fund are forecasting world gdp growth of about 3½ per cent this year, before picking up a little next year. these seem reasonable estimates at this stage, although the risks still seem weighted to the downside. it is worth noting that we still have not seen, thus far, the sort of collapse in production and trade across a wide range of countries that was observed in 2008.