Building the new economy

Yesterday former Federal treasurer Peter Costello boasted in the Fairfax press about how happy he was that he ignored those urging him at the beginning of the century to encourage investment in new industries and allow Australia to be a clever county.

In October last year, Reserve Bank governor Glenn Stevens made exactly the same points saying “10 years on, though, it does not seem to have been to Australia’s disadvantage not to have built a massive IT production sector.”

Many economists share the politicians “and public servants” views – Fairfax’s economics writer Ross Gittins recently stated, “our future is in mining, not making” which ignores the reality that only 6% of Australian workers work in a volatile industry that is a price taker in an uncertain world.

At the same time, Peter Costello’s views were appearing on the internet, former Hawke Government minister Barry Jones handed down his report on the state of the Australian book industry which has been ravaged by the move to online bookstores like Amazon.

Amazon are one of the companies that Glenn Stevens sneered at in his speech in October last year stating, “Blue-sky valuations were being applied to companies that had not, at that point, earned a single dollar of profit (and many never would).”

This quarter Amazon reported profits of 10 billion dollars, on revenue of $63 billion and the company’s payroll passed the 50,000 mark.

To be fair to Gittins, Costello and Stevens, this dismal view of Australia’s future being a retirement home clinging to the edge of a massive open cut mine is shared throughout Australia’s business and political leaders.

One of the first acts of Kim Carr – the same minister who received Barry Jones’ book industry report – was to cut the Commercial Ready grants program and leave the business plans of hundreds of entrepreneurs and innovators in ruins.

The message from Canberra – and the board rooms of Collins Street and Martin Place – is clear, if you want an active role in developing the world in the 21st century that extends beyond digging stuff up for Chinese and Indian steel mills then you probably don’t have a future in Australia.

For those of us who don’t share that view, that believe Australia has more to offer our kids than jobs driving big trucks, it’s time for us to stand up and start building the industries that will keep this country running when the mining boom comes to an end.

We won’t get any help from Canberra, the banks or established big business incumbents, but someone needs to do it to pay for Peter Costello and Glenn Stevens defined benefit pensions. After all, it doesn’t look like the mining companies are going to stump up the cash.

Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.