Innovatia

regions will be presided over by an empowered world government or council of sorts. Regionalisation and globalisation are slow and painful processes, and there have been set- backs to both – take Brexit, for example. But, importantly, Australia is now part of the world’s largest region, the Asia Pacific, in terms of pop- ulation and economic output. Indeed, the larger Asian megaregion (being the Asia Pacific and Indian subcontinent), accounts for two-thirds of Australia’s inbound tourism and immigration and 80% of our goods and services trade, respectively. A tectonic shift is underway in the global econ- omy. The East, which already houses four-fifths of the world’s citizens, has also overtaken the West in GDP terms. Meanwhile, the economic and population pecking order of nations is changing fast, as we see in the following two graphs. In this 21st century, nations with the largest pop- ulations are becoming the largest economies, hav- ing embraced their own Industrial Age and also the Infotronics Age of information and commu- nications technology (ICT) and service industries. This changing world order has enormous impli- cations for our region. Although Australia com- prises 18% of the Asia Pacific’s arable land – sec- ond only to China, which accounts for 54% – we only have just over 2% of the region’s GDP, and only 1% of its total population. So, if we are to be a good neighbour within the Asia Pacific, it is likely that Australia will, eventually, need to accommo- date a larger population – a development will require appropriate infrastructure, a continued policy of peaceful multiculturalism, and innova- tive thinking with regard to the nation’s ecology. It is likely our standard of living (real GDP per capita) will also increase by a factor of three to four times in the process, as has been the case in past

As is the case with all developed economies at present, the quaternary sector (coloured in green in the following graph is currently the fast- est-growing services sector in Australia; although the quinary sector (coloured in blue in the above chart), especially the Health Care and Social Assistance industry, is also growing as a share of the nation’s GDP as we enter the 2020s. Service industries growth is underpinned by ICT, which, as of 2007, is in its second stage – being the Digital Era of fast broadband, big data, artificial intelligence (AI) and analytics. Outsourcing creates new economic ages and industries, although this is not widely under- stood or appreciated. We wouldn’t have had an agriculture industry if households had remained self-sufficient (and inefficient, compared with dedicated farms), for example; nor would we have had a manufacturing industry if house- holds had remained self-sufficient (and, again, inefficient, compared with factories) in preserv- ing food and making clothes and furniture. Both those ages – the Agrarian and Industrial ages – have since been surpassed by our new Infotronics Age, which began in the mid-1960s and is expected to continue to the middle of this century. The current economic age has seen growth primarily in services industries: the result of outsourcing services from households as well as from corporations and overseas countries, as summarised in the below exhibit. It’s awe-inspiring to consider the extraordinary amount of innovation that has already occurred to date. We have industrialised billions of dol- lars of new services to individuals, households, businesses and overseas customers; and we can add to this the innovation that has taken place here and overseas in new enabling utilities.

This outsourcing is now valued at over a tril- lion dollars in revenue; and has created hun- dreds of thousands of businesses over the past half-century, with many more to come in the decades ahead. Of course, being rich in resources, Australia is also seeing new growth cycles in some of our long-existing Agrarian and Industrial Age indus- tries. For example, the mining industry enjoys a new growth cycle around every four decades, while the agriculture industry is expected to enter a new fourth era in the 2020s. However,

centuries (notwithstanding a slow recent decade). Our changing mix of industries At present, and as we progress towards the mid- dle of the century, Australia’s industry mix is very different to that of past centuries, as demon- strated in the below chart.

INNOVATIA

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INNOVATIA

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