Economic complexity, what is it good for

Diversity, opportunity, emissions reduction..

Lets start with diversity. Permaculture principle 10: Use and value diversity

"Don’t put all your eggs in one basket" (we all know that one!)

In nature, in the workplace, in your investment portfolio, diversity is good. Diversity reduces vulnerability to a variety of threats and takes advantage of the unique nature of the environment in which it resides.

What is economic complexity

A complex economy has diversity. The Economic complexity Index (ECI) is a powerful dimensionality reduction technique used to predict and explain future economic growth, income inequality, and greenhouse gas emissions.

Visualising data can untangle the complexity and help to draw out insights, the table below shows how Australia is tracking.

Oh nope, not in the top 20.. a bit more scrolling down the list

Australia has a current rank of 79 and a score of -0.19.

Australia's economic complexity is low, with a high reliance upon digging stuff out of the ground and selling it, in 2018 Australia's three biggest exports were coal, iron ore and liquified natural gas (LNG), with education and tourism coming in fourth and fifth, followed by gold, aluminium ores, beef, crude oil and copper.

Economic complexity and emissions reduction

As the world commits to zero net emissions by 2050, the future of Australia's economy must evolve to make the most of this opportunity.

Evidence shows that 'economic complexity contributes to both reduced greenhouse gas emissions intensity and reduced greenhouse gas emissions per capita. Production of complex goods is associated with lower emission intensities due to their cleaner manufacturing processes and high value-added. The knowledge embedded in the productive structure of complex economies encompasses the knowledge required for cleaner production technologies'.

Opportunities for Australia

There is a huge opportunity to think about how we might create more diversity, more resilience and more opportunity.

The circular economy and the move towards a clean equitable nation offers opportunity not only to diversify our economy, but to build a better world that works for everyone. There are some incredible things happening across Australia - microfactories transforming waste into valuable products, new innovations to get rid of single use plastics, insects changing food waste into protein rich feed, research partnerships and missions to fast track us towards a new future.

Going circular can generate significant benefits for all business types and sizes, from creating jobs to providing opportunities for growth. Our team at the Circular Economy Business Innovation Centre (CEBIC) are providing businesses with the support they need to innovate, adopt, and implement circular economy opportunities and business models.

The CSIRO's Australia National Outlook highlights that if our nation chooses to face the challenges head-on now, Australia could reach its full potential by 2060. This would result in a financially-strong, inclusive, highly-skilled and dynamic, affordable future.

We don't need to rely on technology that has yet to be invented. What we need to do is deploy existing technology, with a policy platform that gives certainty to investors.

There might be arguments that sustainability means doing less, creating less, and therefore stopping entire industries and careers. But circularity teaches us that this is not the case. We designed ourselves into this mess, and we can design ourselves out again. Never before has the space of innovation and change been so exciting. The time is now people!

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