Australia has a “commodity mindset” - with minerals, food, education and tourism. Use our brains to add value, and we can rebuild Australia.

Australia exports minerals, meat, wheat and wine, and invites overseas students and tourists into the country.

Pretty basic stuff. Commodities. Managed with a commodity mindset.

And we process these commodities, adding very little value on the way.

In his 1964 book, Donald Horne, referred to Australia as “The Lucky Country”.

But in the last chapter he said,

“Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.”

His intent was to comment that, while other industrialised nations?created wealth using clever means such as technology?and other innovations, Australia did not. Rather, Australia's economic prosperity was largely derived from its rich natural resources?and immigration.

Horne observed that Australia "showed less enterprise than almost any other prosperous industrial society."

That was a statement about 1960’s Australia, but is just as relevant today.

We are 93rd in the world for economic complexity, with the mineral sector being largely responsible not just for keeping the ship afloat through royalties, but also being the source and inspiration and investor for much of our robotics, automation and AI development.

The investment of the minerals industry in increased mining efficiency led to investment in local robotics and IT developments, that were then applicable in other industries.

Mining alone was not wholly responsible, but it has made a huge contribution to knowledge and skills in Australia, that has application in other areas – defence, agriculture, space, transport and even climate action.

Lucky country?

Luck has got nothing to do with it any more. Because luck can run out.

To quote Donald Horne, “like other industrialised nations, we can?create wealth using clever means such as technology?and other innovations.”

We have to create our own luck, using insight, inspiration, vision, commitment and action.

Focusing on projects with big picture “vision”. Where are we going? What products and services to we have in embryo that could be grown to be competitive worldwide?

Our commodities are a two-edge sword. They generate huge wealth, but also generate a lazy commodity mindset.

It’s sunny. The sky is blue. Relax. We don’t have to worry about anything. Mineral royalties and immigration will fix everything. They always have. Always will. No worries.

Be aware. Beware the commodity midset.

Even many of the high value students we educate in our universities are shipped offshore. And not employed locally. Treated as commodities. Not opportunities.

All that investment in young brains, exported elsewhere to support wealth creation outside of the country, not inside. The best engineers, software developers, designers and data scientists…gone. Because there is little for them to do here.

We don’t have the high value industries that need a high value workforce.?

The high value industries that generate high value products and services, high value exports and JOBS.

We could have them. But for that, we have to get smart. Strategic. And committed.

We have to recognise that we can’t continue in the same way we have for the past fifty years. Or we will hollow out the brain, heart and soul of the country.?

There is no vision beyond next week. Sometimes not even that far into the future.

The election cycle comes and goes stopping and starting thinking, policy and action.

Always short term. Driven by the impending election. Never any strategic consideration for the future. 3-year election cycles, with any action only happening in the second year.

Firefighting. Dealing with short term issues.

No long-term planning. No long term vision. Rely on commodities. Assuming no external change.

And assume makes an “ass” of “u” and “me”. Change is inevitable and we have to be prepared. Yet we are not.

The ‘wicked problems” stack up and are tinkered with around the edge.

Federal and State governments need to build social housing with a vengeance. The “market” has no incentive to help the disadvantaged. The older women in cars. The invisible people living in tents and under bridges. Retirees without a house or apartment.

There is no ROI in the disadvantaged. No value for developers or investors.

Government has to build social housing.

And Federal government needs to address immigration, yet chooses to cap students rather than focus on the bigger picture.

We should be strategically adding value to production through immigration, not adding to house prices.

Federal government needs to bring defence into the 21st century, supported by the sovereign manufacturing capability that is required, but kicks the can down the road once again. Ukraine is providing lessons for all democracies. But lessons have to be learned.

There is no consistent support for the new productive industries that can and will generate new value added products and services.?Those value adding industries exist in infancy, but need support to grow.

We have the ideas. We have the skills. We have the intellectual resources. But we do not have a framework to support the development and nurturing of new productive industries.?

We start the process in our incubators and startups but then let it go. Often for those embryonic opportunities to then be picked up by “vulture capital” and transported overseas to California, the UK or Europe.

There is a gap between ideas and potential. Because of our commodity mindset.?

We don’t fully appreciate or leverage the power of adding value – through design, investment, branding, marketing and advertising.

We could create new industries. And create high value jobs. The components are all there. But the vision and mechanism to connect the bits together is absent.

At a very basic level, we need to connect research and innovation with the businesses and investors that exist here in Australia. We don’t do this well. Knowledge diffusion - where we are 71st in the world. We can do better.

Universities are not good at engaging with industry because they are not rewarded for doing so. Publishing papers is rewarded by government, not industry engagement.

CSIRO could be the engine room for this research AND development endeavour, but it is not allowed to be.

The Science and Industry Research Act, defines the purpose of CSIRO.

“To carry out scientific research for any of the following purposes – assisting Australian Industry, furthering the interests of the Australian community, contributing to the achievement of Australian national objectives or the performance of the national and international responsibilities of the Commonwealth, and any other purpose determined by the Minister.

and

To encourage or facilitate the application or use of the results of such research.”

But not “to lead the DEVELOPMENT of new industries based on that research.”

It could.

And the phrase “and any other purpose determined by the Minister” is potentially very powerful in that regard.

We can always hope.

The budget surplus has to be spent on something...why not spend it on developing new industries that will help deliver surpluses far into the future?

New industries for domestic and overseas export markets.

We need to diversify our industries and our markets.

Having most of our eggs in “the China basket” opens the door to manipulation and interference, which we have seen in Australia with increasing regularity.?

Spreading risk more widely through the creation of more products and services, and the expansion of markets diminishes that threat. Of course, there is no quick fix for this problem, but the quicker we get moving the sooner we will experience the results.

Diversification takes time. We have the means. We just need the motivation and the commitment.

Somebody has to take the lead. But we have no obvious innovative industries or Australian corporates to lead the way in this regard. No FAAGs.

But we do have our universities. We just need to unleash the possibility that they represent.

Turning the advice of the Productivity Commission in 2022 into action.

“While novel, ‘new-to-the-world’, innovation is an important source of economic performance, it relates to only one to two per cent of Australian firms. The slow accretion of existing knowledge across the economy — diffusion — is often overlooked as a source of productivity. It has the scope to lift the performance of millions of businesses.”

We need to share the knowledge we have more effectively.

In our top ten companies, we have banks and shops and mining companies.?

In the US top ten companies, there are shops, oil, technology, investment and healthcare.

In the EU there are manufacturers, banks, oil and healthcare companies.

More diversity and more alignment with the way the world is changing.

We have to move on from a total reliance on commodities. And change the commodity mindset that is a result of that historical focus.

Generate a “value adding” mindset. What might we do to add value to X and increase our ROI by Y? Design. Branding. Collaboration. Innovation. Marketing. Advertising.

Use all the tools at our disposal to shift focus.

We have the resources we need to succeed. Ministers. CSIRO. Data61. 38 Universities. Innovation “hot spots”. Ideas. Scaleups. Budget surplus.

We just need to bring these resources together with a sharp focus on value adding, market diversification, export opportunity and evolving customer need and…

Bingo. myREGION.au