Australia has emerged from three years of the COVID-19 pandemic and into a period of global disruption. Within this, however, lies opportunity, particularly for economic diversification. Global decarbonisation and electrification are driving significant investment in renewable energy infrastructure. Maturing technology sectors — from quantum computing to bio and med-tech — are driving investment and innovation here and overseas.
Alongside these sectoral shifts is an increased focus on advanced manufacturing – reshaping the global supply chain. The pandemic, tied with recent global events, has questioned whether Australia’s continued shift away from domestic manufacturing capabilities is still valid or wise. Both from the standpoint of sovereign capability building and export diversification, Australia is well placed to capitalise on these opportunities.
To do so effectively will need robust, considered, and co-ordinated policy settings at a national scale.
Treasure Jim Chalmers’ recent essay ‘Capitalism after the crises’, calls for a ‘values-based’ approach to capitalism. A situation where Government has a clear role in identifying priorities, facilitating the flow of capital into ‘priority areas’ and look to co-invest and collaborate. Industry policy is a crucial part of this refreshed approach to economic and social development. Governments use industry policy to direct, attract or grow targeted industries in a regional or national economy.
In Australia, the Commonwealth Government directly promotes and advances certain industries or sectors of national importance, while states and territories shape the development of industries, often at a placed-based level. In Australia, national policy that prioritises industries has a predominately sectoral focus. However, unlike other countries, such as Canada and the United Kingdom, Australia lacks a truly systemic and spatial nationwide industry framework.
SGS Principal and Partner Jeremy Gill explores this in his recent paper “Sectoral, Systemic and Spatial: Rethinking Australia’s Approach to National Industry Policy”. He examines how industry policy is framed in Australia; what we can learn from policy approaches in other countries; and why a new approach should be not just sectoral but also spatial and systemic. A multi-faceted approach Gill argues is crucial if Australia wants to build genuine national competitive advantages in the sectors that will define the future of the global economy.
