Innovation system expert Roy Green says Australia should lean into its trade and research relationships with other middle power nations to mitigate an economic reliance on China, and a strategic and technology dependence on the US.
Australia’s participation in the Horizon Europe research program is an immediate first opportunity, working with like-minded partner countries to collaborate at scale, building more sophisticated industries and joining diverse global supply chains.
In this episode of the Commercial Disco podcast, Professor Green runs a full spectrum of industry policy discussions: from the Strategic Examination of R&D and the Prime Minister’s headland speech on AI, to his support for an export tax on gas and a call for the abolition of the $11 billion diesel fuel tax rebate.
He also suggests strategies for maximising the benefits from the current data centre investment boom, pointing to how a strategic reserve of AI computing power might be used to help underpin local industry and scientific development.
Professor Green, who has ruffled feathers this week with criticism of some SERD recommendations, wants government to build a ten-year industrial strategy that consolidates and restructures incentives within the system.
Australia’s productivity performance is at 60-year lows and the national slide down global economic complexity rankings is well documented.
But Professor Green is optimistic nonetheless about Australia’s prospects and says Industry minister Tim Ayres has taken a methodical route to bringing all parts of the governments industrial ambition together into a coherent plan.
Professor Green was in Europe recently with colleague Dr John Howard from the Acton Institute looking at place-based innovation systems and the industry-led research programs operating through institutions like Fraunhofer and Max Planck in Germany and Catapult in the United Kingdom.
A research paper from that study tour will be made public in September that will focus largely on AI and productivity, and how this can be generated through place-based innovation ecosystems.
“There’s an opportunity here to be grasped, and we don’t have much time to do it,” Professor Green told InnovationAus.com.
“And that opportunity is in turning general purpose AI into industrial AI, by which we mean the application of AI to physical products and systems as a basis for new forms of manufacturing.
“We chose to look at those ecosystems in Europe because Europe is in a not dissimilar position to ourselves,” he said.
“It is squeezed between the behemoths, with the US putting up tariff barriers [and] China subsidising massive export opportunities and prospects for them.
“Where does a place like Europe fit into that context, with the prospect of its car industry – for example – being swallowed up and spat out.”
Do you know more? Contact James Riley via Email.