John Menadue. Australia’s Comparative Advantage and Policy Reform

In May and June of this year, Michael Keating and I edited a policy series ‘Fairness, Opportunity and Security’. This policy series has now been published in book form.

We were and remain concerned about the policy vacuum in Australia.  We are anxious that the debate on policy reform continue.

An important contribution to this debate has now been made by a report ‘Australia’s Comparative Advantage’. This report was sponsored by the Australian Academy of the Humanities, The Australian Academy of Science, the Academy of Social Sciences in Australia, and the Australian Academy of Technological Sciences and Engineering. The authors of the report were Professor Glenn Withers, Dr Nitin Gupta, Ms Lyndal Curtis and Ms Natalie Larkins. In releasing the report, Professor Glenn Withers said ‘Australia has achieved much over recent decades but there are substantial challenges ahead, including the risk of economic slow-down with the ending of the mining investment boom.’

The conclusions of this report were as follows:

When considering what the future may
bring, this report has found that thinking that tomorrow will be more of the same as today is not good enough. All possibilities need to be contemplated. In choosing how we face that unknown, and in some cases, unknowable future, a broad approach is necessary to make sure that the foundations with which we will face the new challenges are enhanced for whatever may come.

Australian progress faces challenges of great importance, but these are challenges that this project finds can be met. In the view of this report, building comparative advantage will require a commitment to ongoing institutional reform and to investing in our future capabilities as a nation. The report outlines packages of policies that are illustrative of what is required.

Natural advantage sectors will still contribute mightily, but they can usefully be matched by the equally promising created advantage in the traditional areas of economic advantage and emerging advantage opportunities in advanced manufacturing and service industries.

The report also concludes that institutions and culture must be configured to support this process, including through Australia’s rather distinctive deployment of major public-private partnership systems, and that better leadership, management and the encouragement of innovation and entrepreneurship will be a key to

success. In all the above-mentioned illustrations the importance and centrality of knowledge/ ideas would be explicitly recognised in the associated structures and policies.

The project has found evidence that the Australian public is increasingly willing to commit to and support such ways forward. Explanation and leadership is needed for this vision to realise its potential, but the Australian community has the level of sophistication to understand what is needed to inform and support that process.

Building comparative advantage is not simply addressing a list of policies or proposals but ensuring the framework of a broad-based foundational approach to the Australia of the future is understood and at the heart of decision- making and debate. Australia does well at many things but that is no guarantee of future success. If we want the country to be the best it can be, we will have to build that future.

This report affirms that pursuing both institutional changes in political, legal, market and cultural arrangements alongside investment in skills, infrastructure and innovation would
see long-lasting benefits to growth and living standards. These initiatives would develop
the national capacity to realise comparative advantage and compete well in a changing global environment. They would also enhance our ability to do this equitably and sustainably.

The full text of this report can be accessed from the link below:

http://www.acola.org.au/index.php/projects/securing-australia-s-future/project-1

 

John Menadue.

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