Australia’s continued economic success is at risk unless industries and workers adapt to win business in a highly competitive global marketplace, a new report says.
Changes are happening in demand, as new markets emerge in India and China, while for supply, new communications and manufacturing technologies and cheaper global freight costs are forcing huge changes on industries, the McKinsey Australia report says.
“Australia has no option to delay or avoid what is happening,” the report warns.
“These forces can be either harnessed as opportunities or endured as threats. It depends on the response by Australian governments, business and workers.”
The Business Council of Australia (BCA) commissioned the McKinsey report as part of a campaign to push the government to focus on building capacity in areas where Australia has a competitive advantage.
It identifies lifting Australia’s global competitiveness as the highest priority, with an overall increase in trade needed rather than only an increase in exports.
Australia is the world’s 12th largest economy but the 21st largest trader, McKinsey found, and increasing trade in goods and services was “key to unlocking economic growth for the next era”.
The report also identifies mining, agriculture, education and tourism as the industry sectors with the greatest potential.
Food manufacturing and some advanced manufacturing and global supply chain niches are also areas where Australia has the capacity to be a global winner.
BCA president Catherine Livingstone said Australia has to undertake “a fundamental shift in mindset” to change from a focus on the domestic economy to global trade.
Part of that is a change in industries from producing final products to making high-value intermediate goods and services to feed into a global supply chain, she said.
Another facet is a workforce shift from qualifications and occupations to skills and capabilities, Ms Livingstone said.
Source: Yahoo Finance
