Australians have much to be proud of regarding their country’s economic success. In June, the country broke the developed world’s record for the longest run of uninterrupted growth.
Yet the uncomfortable reality is that Australia is not where it used to be, nor where it could be. According to the IMF’s analysis, Australia’s average growth is almost a full percentage point lower per year than before the global financial crisis; growth in non-mining sectors is weak despite declines in real interest rates; and wage growth has been disappointing. The IMF calls this confluence of factors “symptoms of the new mediocre”. In this light, Australia’s consistent run of growth, while positive, could be seen as fortuitous complacency rather than genuine dynamism.
Perhaps it’s worth remembering that the phrase “the lucky country” was coined by David Horne in 1964 as a kick in the pants to a parochial, regionally disconnected country relying too heavily on natural resources to buttress its quality of life. Given that after decades of global technological growth, over 80% of Australia’s exports by value are minerals, metals, stone, foodstuffs and wood, it might be time to again ask, as Horne did: “Have the conditions that led to so much success also weakened adaptability and slowed down the reflexes of survival?”
The question is apt, because we are currently witnessing the emergence of a range of extraordinary new technologies. Artificial intelligence, distributed ledgers, additive manufacturing and many more herald a range of radical transformations that won’t just affect how we do business. They are also in the process of challenging our identities and institutions, radically altering how we relate to one another, and even raising the question of what it means to be human.
This period of social, economic and political change, marked by the convergence of digital, biological and physical technologies, is what we call the Fourth Industrial Revolution. It represents a huge opportunity for Australia, one that can make use of Australia’s best asset: a highly-educated population.
The Fourth Industrial Revolution is not about simply promoting innovation writ large, or espousing the benefits of digital technology, although both are important. Around the world today, entrepreneurs and organizations are building entirely new systems to create, exchange and distribute value. The opportunity presented by the Fourth Industrial Revolution is to build on digital capabilities and to innovate in ways that can help Australians not just adapt to a new world, but to shape it directly.
Assuming we do take this opportunity: what’s in it for Australia? Faster growth is certainly one outcome. Research by NESTA for the UK found a tight correlation between firm-level innovation and firm growth rates - in effect, a virtuous circle for value-adding enterprises that were willing and able to scale both investment and employment simultaneously. And, while data is scarce, McKinsey reports that adopting recent artificial intelligence approaches such as deep learning leads to higher growth rates, at least for firms fully committed to them.
The prize is large. A recent report from AlphaBeta estimated that Australia could boost its national income by more than $2 trillion between now and 2030 if it doubles investments in automation technologies such as artificial intelligence and robotics. While such a transition will require providing support to millions of workers whose jobs will change, failure to adapt to global trends in automation will result in a less competitive industry and shift stress onto other areas of the economy.
But growth rates are a means, not an end. The GDP numbers reported quarterly by the Reserve Bank are, after all, just a way of keeping score. For Australians to feel that new technologies, new business models and new labour market structures are truly beneficial, they should improve people’s lives in meaningful ways.
So what should Australians do to keep the luck flowing?
First, we need to collaborate better and more often – both across firms and across sectors.
Australia’s Industry Monitor 2016 reports that the level of collaboration between Australian firms is well below the OECD average, while the percentage of Australian firms collaborating with universities and other non-commercial research organisations is among the lowest in the OECD. Meanwhile, trust levels across sectors are low: only 40% of the general public have trust in Australian institutions, according to the Edelman 2017 Barometer, and only 26% of Australians find CEOs to be credible – a drop of 13% on the previous year.
Conversely, Australia’s growing biotech sector contains all the elements for success: highly skilled labour, collaboration with research institutions, robust entrepreneurship, government support, and industry partnerships. Working together across stakeholder groups can be a huge boon for innovation, given that innovation often requires seeking out alternative sets of knowledge and a mixing of institutional and social cultures, emerging from new perspectives on familiar objects and problems.
AusBiotech’s Industry Position Survey 2017 highlights that this last year was the strongest on record, with more than 77% of companies expecting to grow. From investors to policy-makers, collaboration within the biotechnology sector shows that Australia has the right ingredients to make the most of the Fourth Industrial Revolution.
Second, we need to accelerate both the development and adoption of new technologies across Australian businesses, non-profit organizations and the public sector.
One challenge is cutting through both the hype and fear around emerging technologies; demystifying topics like artificial intelligence, for example, to encourage more Australians to have a go and put them to use to solve local challenges.
Having a go means investing in people - not just future generations, but today’s workforce and ourselves. As Australian entrepreneur Jeremy Howard has shown with his non-profit training programme fast.ai, deep-learning approaches are accessible to anyone with a little coding experience and access to low-cost cloud computing services. Atlassian’s Mike Cannon-Brookes has called out the need for more resources in technology training, specifically software engineering, and has highlighted the challenge of having to import almost half of the senior positions in a technology-driven company because of a lack of local expertise.
Finally, and perhaps most importantly, we need a deep and engaging public conversation about what we want from the new technology age.
We are lucky to live at the beginning of the Fourth Industrial Revolution. The opportunity exists to shape our future relationship with technology to be more inclusive, and to enable a fair and sustainable future.
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But this opportunity must be grasped, and requires thinking deeply and discussing broadly what matters most for cultivating a flourishing society and charting a new course for prosperity. We owe it to ourselves to make sure that the Fourth Industrial Revolution not only generates a dynamic economy but also serves the public interest. And as George Megalogenis alluded to in his 2016 Quarterly Essay, we can’t afford to panic at the prospect of describing our shared future.
Here, we can turn again to what Horne saw as the virtues of the Australian public. In the Fourth Industrial Revolution, perhaps even more so than in the 1960s, we should build on the good qualities of Australians: their tolerance, sense of fair play, adaptability, scepticism, courage and talent for improvisation.
It’s good to be lucky. In turbulent times, making our own luck is even better.