Australia’s budget and the missed opportunities for a future-building economy

It’s been over 4 years since I wrote my last post about the Australian economy. My last post on this topic discussed why Australian startups have it tough and what Australia needed to do to support startups. While the state of the Aussie startup ecosystem has progressed since then, many of the suggestions I made are still valid and unfulfilled to this day. #Sigh

But beyond that, today I am even more despondent and outraged at the lack of forward-thinking in the budget that was announced this month by the Coalition. From what I could see, the budget was still focussed on a pre-Covid economy, and by that I mean it focussed on the industries we have, not the ones we need in a post-Covid world.

A startup client I was consulting with as the pandemic emerged earlier this year decided to move in a direction they had been thinking about for a while, from a sales-led growth approach to a product-led growth approach. One might think that such turbulent times aren’t ideal to make such a big shift in your business model. But this company knew that their investors would understand that the present circumstances would likely have a reduction in their revenue anyway, so to take this time to make that shift under the cover of a pandemic was the perfect opportunity to do this without the kinds of questions it might elicit from investors during normal times.

The reason I mention this story is because it reminds me of the opportunity we have now as a country in Australia. A few years ago, when Malcolm Turnbull was running for re-election on an innovation agenda, it fell flat with the Australian electorate. Why? They didn’t understand it and didn’t see what the point was. So the coalition put it on the back-burner and it’s been sitting there ever since. But just like my client who had been putting their product-led growth strategy on the back burner until a few months ago, now is the time for Australia to bring its innovation agenda to the forefront. Now is the time when the electorate is crying out for solutions to improve our economic situation and when the Coalition has the support to spend money they wouldn’t normally have during normal times.

Not only that, but because of Australia’s excellent handling of the coronavirus, we now have the bandwidth to focus on building out our industries of the future while most of the remainder of the developed world is still focusing on getting their health systems and economies back on an even keel. To not move into a growth mindset for our country now is negligent at best and at worst is committing Australia to a diminished future and reduced per capita income that will see Australia slide backwards permanently.

Here is where I see the opportunities for Australia to focus on that helps Australia not only retain its place in the developed world, but leapfrog our allies to become a true leader in world economics.

1. Manufacturing Automation.
   Over the last few decades, most manufacturing in the developed world has been outsourced to China. The world has now seen what happens when we rely on outsourcing our supply chains. Yes, Australia should look to bring a lot more manufacturing onshore. The technology now exists that supports doing so at a cheaper price than outsourcing to China. But the real opportunity here is in further developing this manufacturing automation technology and supplying that technology to the rest of the world that will want to liberate their supply chains from the likes of China. Instead of exporting things we pull out of the ground, we should be exporting manufacturing automation technology.
2. Climate Change.
   We need to invest in renewable and anti-climate change technologies to reverse our worsening climate crisis. This industry will only grow exponentially over the coming decades and as (hopefully) a new leader is elected in the United States.
3. Remote Working and its ripple effects.
   The way the world works has changed forever. Many Silicon Valley companies have switched to remote working for good and more companies are likely to follow suit. We need to start thinking now about how that ripples through the whole economy. What will happen to commercial property? How will cities evolve as less people converge on them on a daily basis? How does that impact on transport, private and public? How does this impact on Australians (like me) who work remotely with companies around the world and how can we create an “export” industry from that?
4. Education.
   Tertiary education is one of Australia’s largest “exports”, and hopefully it will rebound in the coming months. But education is forever changed, just like remote working. We need to put some serious thought and investment into how we can develop new forms of education and as more education moves online, we have an opportunity to expand our Total Addressable Market beyond the confines of who would be based in Australia’s domestic landscape and towards the unbounded reaches of the internet. We must also look towards new forms of education that don’t fall into bachelors degrees and are much more targeted and vocationally applicable.
5. Australia as a haven.
   Because Australia has done so well in managing the pandemic, and because there is such turmoil happening in other countries like the United States, Australia is a very attractive place for people looking to get the heck out of dodge. Very entrepreneurial and skilled people are looking for places to go. This is a once-in-a-generation opportunity to attract the kind of talent to Australia that we wouldn’t normally be able to, at least in the kinds of volumes that we need to become a force in the world economy. In short order we will absorb the Australians stranded overseas.
   Our next priority should be skilled labour and entrepreneurs from overseas. This concept is not new. The United States accepted exceptionally skilled Jews looking to escape Europe during WWII. We should think really creatively here — perhaps we can set up quarantine islands that each have industry focuses. One island gathers experts in climate change from around the world. Another island gathers experts in manufacturing automation. Another island is filled with entrepreneurs. Magic will happen when you bring the right people together. It may sound crazy but these are crazy times.
6. Cyber Security.
   Australia has already made significant inroads here but there is a lot further to go here. We need to beef up our education offerings in this area and become the best place in the world to become a cyber security expert.

Those are my thoughts on the opportunities that Australia should be taking advantage of. What are your thoughts? What have I missed?