At the inaugural Google eTown Awards ceremony held yesterday, West Australian businesses were recognised for being number one within Australia's digital world.

Google Australia's head of local business Clare Hatton said the awards, which ranked 600 communities based on their online business acumen, were a way to reward metropolitan and regional areas that are "using online better than others" in order to find new customers and grow their businesses.

"We know the digital economy is fuelling Australia’s economy. We already know the mining boom is reshaping Western Australia but this eTown award really shows that the City of Perth's small businesses are also keenly embracing the digital boom," Ms Hatton said.

Australia's digital economy is worth as much as the nation's iron ore exports and is forecast to grow by up to $70 billion over the next four years according to business consultants Deloitte Access Economics.

"We've found 50 per cent of consumers are researching online before they go and buy anything off line so it's hyper critical for local businesses to be online. Having a web presence is more important than having a phone nowdays, getting online is the first critical step toward success," she added.

"[Perth] points the way for communities in this country to embrace this technology in order to ensure businesses grow and our economy as a result grows," Federal Small Business Minister Brendan O'Connor said as he presented the award to City of Perth Lord Mayor Lisa Scaffidi.

The award announcement follows Perth's first ever foray into Sunday trading in the wider metro area and the launch of free WiFi within in some areas of the CBD – an initiative championed by Ms Scaffidi.

Other 2012 eTown winners included Yarra in Victoria, Adelaide in South Australia and North Sydney and Ryde in New South Wales.

Byron Shire in NSW led the regional rankings ahead of Meander Valley in Tasmania, Cessnock and Wingecarribee shires in NSW and the Scenic Rim region in Queensland.

The awards were established in the UK and the internet search engine has since identified e-Towns in France, Germany and Poland.