With substantial changes taking place in the Australian and global economies, the question arises – what will drive Australia's growth into the future?
Building Australia's comparative advantages
In its paper "Building Australia's comparative advantages", the Business Council of Australia outlines opportunities to drive economic and jobs growth, and what needs to be done by policymakers and businesses to seize these opportunities.
The report describes a challenge that Australia faces: the drivers of Australia's growth over the last 20 years will not be sustained over the next decade. Instead, key forces are shaping the future of economic growth – technological changes and digitisation, changing demographics (the ageing population), growth and competition from emerging economies, and the reconfiguration of value chains and rise of a global labour market.
A new approach is needed from governments and businesses to respond to these changes and to be competitive in a global marketplace. Governments and business need to work together to undertake difficult structural reforms that allow Australia's industry sectors to become competitive or maintain a competitive position.
The report emphasises the importance of innovation to drive competitiveness. This may include devising strategy to tap into global growth; moving towards providing high-value, highly differentiated, niche intermediate goods into global supply chains or in segments of the value chain; and effectively applying workforce capabilities to specific jobs and tasks.
An important takeaway for boards from the report is that sectors and organisations need to play to their comparative advantages. Also notable is the strong focus in the report on innovation (a recurring theme in recent business commentary). A "business-as-usual" approach is no longer sufficient. Boards need to focus on innovation in their strategy development, and should also ensure that there are frameworks in place to foster innovation at all levels of their organisations.
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