Last week, to remarkably little fanfare, the CSIRO released a fascinating little report looking at Australia’s future.
The report is called Australia 2030: Navigating our uncertain future. It is from CSIRO Futures, the recently formed ‘strategic advisory and foresight arm’ of Australia’s national science agency. It is 65 pages long, well written and attractively formatted, and a very useful document.
The report does not try to predict the future, but looks at a number of possible scenarios and their effect.
Innovation is the answer, it says: “Innovation will be key to driving future productivity growth in established industries, as well as developing new companies and industries based on emerging science and technologies.”
That is exactly what the Prime Minister has been saying. But we have a long way to go. “In 2015, the Global Innovation Index ranked Australia 17th overall in terms of innovation, but 72nd for innovation efficiency.
“In an increasingly interconnected and rapidly changing world, Australia risks being left behind if it fails to innovate.”
Australia 2030 is intended as a practical guide, helping businesses “to better understand the allocation of scarce resources, the underlying assumptions that underpin existing business decisions, and the role that innovation can play in helping businesses strengthen their future.”
It does this by examining global trends and identifying emerging technologies, building scenarios for growth and disruption. It says this will help people “translate business vision into innovation strategy” and “identify skills, capabilities and resources required to succeed” and “create sustainable value from technology.”
This is all good stuff, which makes it even more surprising that the report seems to have fallen into a black hole.
Perhaps this is because of the election campaign. But you’d think someone would have picked up on it, instead of indulging in the trivial point-scoring that has become the main hallmark of this election.
The four scenarios for Australia in 2030 show possible outcomes and the consequences of each. They are based on different combinations of social, economic, environmental and technological drivers.
“Each is purposely extreme, in an attempt to provide a sharp contrast between different potential futures and more clearly illustrate the trade-offs involved.”
- Digital DNA: Australia experiences a dramatic shift towards a digital services and knowledge-driven economy. This is driven by the exponential growth of computing power, an increasingly connected world, and a wide range of new technologies and business models. Australia is stable, wealthy, and heavily connected into global supply chains and trade networks.
- Mining and dining: Australia’s economy benefits from a second wave of the resources boom, driven by growth and urbanisation in developing economies. Minerals, energy and food represent the majority of Australian exports, underpinning wealth generators for the economy.
- Clean and lean: A decoupling of economic growth and environmental sustainability sees consumers seek out healthier lifestyles. Australia works with other advanced economies to address carbon abatement, resource efficiency and sustainability. Economic growth slows temporarily but rebounds with the growth of ‘clean and green’ products and services that fetch a price premium.
- Weathering the storm: Global geopolitical instability increases, driven by climate change and regional conflicts over access to land, food and water. The resultant tensions destabilise trade alliances and disrupt global supply chains, leading to prolonged global economic stagnation. Although demand for Australian food exports remains high, overall trade declines and Australia focuses on rebooting industries to service domestic demand.
The report says that each of the four scenarios opens the door to a number of opportunities for Australia. It examines the effect of each scenario on five key Australian sectors – the same as those identified by the Government through its Industry Growth Centre initiative: food and agriculture, healthcare and pharmaceutical, manufacturing, mining and mining services, and oil, gas and energy.
The analysis applies qualitative ratings to each sector. “For each combination of scenario and sector, growth opportunities exist. While market conditions are never ideal for all companies, those that choose to strategically target opportunity portfolios that provide long-term agility and first mover advantage will be best placed to capture a profitable share of international markets.”
As an exercise in futurism, the CSIRO report is better than most. But only one of its four possible scenarios (‘Weathering the storm’) is in the least bit pessimistic, and even then it sees opportunities.
The report takes us to 2030, which covers four of five federal elections – at the normal rate. We do not see a lot of such long term forecasting from Australian governments, except for hopeful predictions that the budget will one day return to surplus.
‘Navigating our uncertain future’ is a useful and worthwhile document. I suspect that if anyone reads it in 2030 they will be struck by its hopeless optimism and its litany of lost opportunities.
I hope I am wrong, but I am growing more pessimistic (less optimistic, actually), as I grow older, a trend exacerbated by the standard of political debate we are witnessing in the current election campaign.
“After decades of economic growth enabled by market-oriented reforms and driven by strong demand for mineral resources, Australia is now facing an uncertain economic future,” says the report.
“The world is changing rapidly as unprecedented wealth creation is shifting the balance of economic power towards Asia. This presents enormous opportunities for Australia. But to seize these opportunities and ensure continued growth, established industries will need to boost productivity to remain competitive.
“At the same time, it will be critical to develop new industries and new businesses that harness emerging technologies and new business models to create the growth engines of the future. Australia has a limited window to seize these new opportunities. If we don’t, others will.
“Innovation backed by a strong investment in science and technology will be essential to both of these. It will be key to increasing productivity in existing industries through the application of new technologies, such as automation, data analytics and genetics. It will also be critical to developing new industries through the commercialisation of emerging technologies.”
Let us hope it happens …