Innovatia

When we look at the latest available rankings of economic complexity, developed by Harvard’s Center for International Development, they show that despite Australia’s high standard of living we still have much work to do to transition into a more knowledge-based, high-value-add- ing economy. The centre’s Atlas of Economic Complexity ranked Australia 87th globally – the lowest of all developed economies and lower than many developing countries. Since 1996, when the country was ranked 57th globally for economic complexity, it has dropped 30 places. In its analysis, Harvard University concludes that “compared to a decade prior, Australia’s econo- my has become less complex, driven by a lack of diversification of exports”.

It is therefore important that the economic challenges we face are recognised and tackled through leadership in long-term and visionary policy reforms. Industry has a role to play in in- forming and engaging with all sides of politics on these challenges. There is much work to be done to transition and advance our economy because, quite sim- ply, we haven’t kept pace with the develop- ment in complexity and technological trans- formation of other countries. The Harvard data confirm that. We must lift our economic productivity and competitiveness and invest more in skills and talent. These long-term pol- icy shifts will position us to capitalise on the next wave of economic growth that is with- in our grasp. Australia’s geographic position within Asia provides us with an opportunity that other countries around the world would love to have. Australia’s other comparative advantages must be exploited to the greatest extent pos- sible. Key policy recommendations we believe supported the case for broader economic re- forms were outlined in the AIC’s Roadmap to Recovery policy paper, released in June 2020. “There is much work to be done to transition and advance our economy, because, quite simply, we haven’t kept pace with the development in complexity and technological transformation of other countries.”

Capital needed in an innovation nation The former Chief Executive of the Australian Investment Council, Yasser El-Ansary , notes that Australia is at an important crossroads, with capital demands not being met locally. E xpanding the investment pipeline and con- tinuing to support the transformative pow- er of innovation and technology must form

the central pillars of a more dynamic and agile Australian economy over the decades ahead. Jobs and industries rely on a steady flow of domestic and offshore capital to support invest- ment into businesses across all sectors of the economy. Australia’s demand for capital contin- ues to be greater than domestic supply and, as a result, the nation continues to be a net import- er of capital. Private capital firms play a vitally important role in attracting both domestic and offshore investment capital, which ultimately flows into job-creating businesses. The private sector, working in partnership with government, can be a powerful driver for inno- vation and technology-based transformation across the economy. To achieve that, we must use policy to support early-stage businesses in realising their potential across all of the key sec- tors of our economy.

INNOVATIA

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INNOVATIA

| Policy & Economics

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