Michael Sainsbury
December 21, 2016

Long-termism is a policy imperative

Trade

Long-termism is a policy imperative

Li Keqiang: The Chinese Premier leading the charge to advanced manufacturing greatness

This week the first trailer for the movie every tech-head has been waiting for popped up. I’m talking about the sequel to the 1982 science fiction classic Blade Runner, which is called Blade Runner: 2049.

It looks like it has stayed true to the original’s futuristic blend of US, Asian and German culture. And this is where the relevance to the tech sector is amped up.

The date of 2049 is apposite, as it is also the target date of China’s long term, three-part 25-year plan to emerge as a technologically bleeding-edge manufacturing giant.

Such long term plans don’t get so much attention in the AHDH attention span of today’s media. Commentary. But it is something we have been mindful of at InnovationAus.com, with our focus on policy and planning.

Not as much is made, these days, of the venerable Five Year Plan in Chine. These have been issued by China’s ruling Communist Party’s like clockwork since it won the civil war against the Nationalists in 1949.

At a distance they appear like an almost quaint relic of China’s mimicking of the Marxist-Leninist model pioneered by the Soviet Union that ultimately helped lead to the Soviet demise.

But that would miss the point. The Chinese like other truly ambitious and forward thinking nations – no matter what you might think of their politics – play a very long game.

Unfortunately this is something is almost completely absent from Australian politics and policy making in the ‘modern’ era.

As China has been ever more entwined in the global economy, the more formal Five Year Plans are not picked over as much as they once were. Private enterprise now accounts for a fair chunk of the world’s second largest economy and in the technology sector.

And the serial stimulus packages that the Chinese government has pumped out since its first massive effort in 2008-2009 to help dodge the worst of the global financial crisis has have garnered far more attention from economists.

The 2016-2020 FYP plan was published in March, but the way these things work is that the meat begins to appear more slowly on the bones of the stark didactic policy statements.

Indeed, the technological centerpiece of the Beijing’s latest long-term blueprint, and the plan within the plan, is beginning to attract plenty of analysis.

Canberra should pay attention

Branded ‘Made in China 2025’ (a bold name given the shoddy implication of the term) is part one of the 25-year manufacturing plan.

To shape their polices and goals China’s technocrats did not turn, as China’s previous successful efforts did, to mimic the strategies of South Korea and Taiwan in particular – and Japan before that – in successful mimicking of existing technology produced at cheaper prices.

Instead, China turned to Germany and its Germany 4.0 project.

China wants to build the big machines that build the little machines. That is where the smarts and long-term success lie. It’s first step, the part that sits inside this.

While looking to Germany looks like a no-brainer – after all, which economy doesn’t want to ape on of the world’s best economies – and the North Asian economies have proven one does not need to reinvent the wheel to be successful.

Innovation can be about process, adaption and application as much as invention.

One does not see much evidence of this happening in Australia – looking to the success of other nations to borrow ideas for long term economic planning – much outside the bureaucratic sphere, where the PM looked to the UK for a digital government blueprint.

The problem for China is that, in the short to medium term, it is starting to run out of time with gathering clouds over its economy and its leadership has been increasingly distracted. But there is nonetheless a long term plan, with very clear goals in place that will over time been hewn more closely to.

And while one should never lose sight of the fact that China remains the world’s largest corporate state, it is a model that is growing in popularity amongst the developing economies in Southeast Asia. And that’s where the competition is now at.

So it may be a case of adapt or die.

There have been reports seeping out from Canberra in the past week that the Prime Minister is actually thinking and planning – two things one couldn’t accuse too many of our recent leaders of doing – about laying out a deeper policy agenda early in the new year.

Hopefully Mr Turnbull – and his Industry, Science and Innovation Minister Greg Hunt – is thinking about where his agile and innovative technology policy will head to next.

As InnovationAus.com has noted, the National Innovation and Science Agenda is a rare policy success for the Prime Minister, but it is time for some longer term planning.

While China’s carefully thought-out long-term technology related policies are an opportunity for Australian entrepreneurs and companies, as noted above Australia is also in longer-term competition with other nations.

And it’s not that we don’t know how to do this, having lapped the world in mining success by using technology and innovation to become the lowest cost producer of our biggest exports iron ore and coal, despite having much higher wages than many competitors

As China had done, perhaps its worthwhile looking at Germany as an exemplar in the western world, along with other northern European nations.

But wherever Australia wants to look for good and proven policy ideas – and how to make long term plans, the time to start is overdue.

If we don’t, then by 2049 it will be way too late.

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