NSW industry policy set for new direction: Chanthivong

Justin Hendry

A reset of industry policy will take place in New South Wales to give investors and innovators a “clear signal” of the state’s long-term direction and support mechanisms, according to the state’s new Industry and Innovation minister.

In his first major speech since becoming minister, Anoulack Chanthivong this week outlined his vision for industry policy, which he describes as inextricably linked to addressing productivity concerns.

“The future prosperity of NSW will greatly depend on getting our industry policy settings right,” he told a Committee for Sydney event, adding that productivity growth has been “weak for a long time”.

Mr Chanthivong, who spent almost two years as the shadow minister prior to taking office, said that while the state had all the ingredients – a highly-skilled workforce, established capital markets and world-class institutions – for a strong economy, it needed to “act now” to keep up.

“The international trend towards more active industry policy demands clear signals to industry and investors on the state’s long-term objectives and the approach to get there,” the minister said on Wednesday.

“Providing explicit policy and political direction, including setting incentives will give investors, innovators and industry the certainty they need to deliver sustainable improvements in living standards over the next 20 years and beyond.”

The new policy being worked up, Mr Chanthivong said, would “provide an overarching framework” for measures, adding that it is “more important than ever to have a stable and transparent policy approach to guide the investments we need to diversify and enhance NSW industries”.

He said the federal government’s $15 billion National Reconstruction Fund had set the “national priorities”, many of which “align with and complement the NSW’s priority industry and technology sectors”.

But the state’s difficult Budget position means the government will increasingly focus on where the state has “competitive advantage” and, after establishing “guiding principles”, make sure to continuously improve the effectiveness of its programs.

“To realise the benefits of industry policy in a tight fiscal environment, we must focus on sectors and technologies that promise a shift towards a highly productive, low emissions economy,” he told the event.

“We need to seek out high value-adding activities and diversify into new opportunities by leveraging our strengths, endowments and proximity to key markets, including in the Indo-Pacific region.”

“Crucially, our policy interventions must be closely monitored for effectiveness, and adapted based on evidence.”

Mr Chanthivong said NSW already has “great competitive advantage”, including through its diverse population and “exceptional… intellectual firepower”, though recognizes the significant challenge that lies with the commercialisation of research.

“We trail comparative global economies in patent applications, invention disclosures and licences and we trail the rest of Australia in research commercisalisation income and research grant spending,” he said.

Citing research from the Innovation and Productivity Council, the minister said the state could see a productivity lift worth $150 million per year if there was a lift in the rate of collaboration between small to medium-sized enterprises.

Mr Chanthivong also used his speech to recognise Sydney’s standing in last month’s Startup Genome Global Ecosystem report, which ranked Sydney as a top 20 startup ecosystem – the highest ranking in Oceania.

But there was no mention of the pre-Budget review that paused a handful of industry and innovation grant programs collectively worth more than $250 million, including the popular MVP Ventures program.

On the Modern Manufacturing Strategy, Mr Chanthivong said the Modern Manufacturing Commissioner Lisa Emerson … had consulted with more than 200 members of industry to deliver an “action-focused plan” that would “lift the efficiency, productivity and capability of NSW manufacturing”.

Common challenges raised during the consultation include procurement, supply chain constraints, skill talent, with areas like clean energy and the circular economy identified as opportunity areas for local manufacturers.

InnovationAus.com will host a Capability Papers forum focused on Manufacturing and Energy Transition at the Museum of Sydney on August 15. Join industry and research leaders, together with state and federal ministers for this important discussion by reserving you seat here

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