Don't just be lucky, be smart

Melbourne Herald Sun, Friday October 5,2012

It's hard work buying gifts when I visit my son. They live in Shanghai. So I go to our shops and find a nice baby toy. Look at the label: "Made in China". Oh, not much point taking something all the way back to where it would have cost half the price.

How about a little dress? "Made in China". You scour Bourke Street looking for something not made in China. It's hard work.

I'm rationalist enough to know that we can't build a fence to keep the foreign goods out. It didn't work in the past, it wouldn't work in the future. But we have to be smart about how to respond. We have to work harder on what we can make, to sell back to China and the other rapidly developing economies around us.

For much of the past decade we've had the luxury of sitting pretty in the shelter of the mining boom. Except that Australia has now had six mining booms since settlement and they all came to a painful end. Already we are receiving worrying signals.

The latest comes from futurist Phil Ruthven who warns us about our "Lucky Country" apathy. Even as we enjoy our high standard of living and safety-net comforts, we have one of the slowest growth rates in our region. Three per cent per annum compared with China's 8 or India's 7 per cent.

Of course they are working from a much lower base, but at these rates, growth comes in leaps and bounds. It would not take many years to find ourselves leap-frogged.

So what added value do we have to sell? Basically, our... selves.

Ruthven points to the industries that he calls "Our New Age". Most of them start between the ears.

Financial services, information technology, education, hospitality and tourism, recreation and culture. All businesses that depend on smart people, much more than machines.

Health care and home doctoring. The boom in outsourcing that will grow with the national broadband network. We even have good starting positions in biotechnology and nanotechnology.

But it's also very easy to screw up. The overseas tertiary education industry was slashed by $2.6 billion between 2009 and 2011 because of stupid racial attacks that were played up overseas to look like the Los Angeles riots. This perceived belief  was backed up by government paranoia that led to over-tightening of visa requirements for visiting students.

A couple of bad moves and suddenly a major export industry is in trouble. Now we have our State Government making a successful attempt to wreck our TAFEs. Much-loved institutions like Prahran College are faced with becoming car parks. Both at federal and state level, budget cutters find education a soft target.

We still have our energy minerals: oil, gas, coal, uranium. But what are we going to do, just bottle them and ship them away, as we have done all along? Or can we use them to add value to the resources we are so enthusiastically digging up? As the raw material values decline, we have to apply our brains to making them  worth more.

Can you believe that it was in 1990 that then Prime Minister Bob Hawke said, "No longer content to be just the lucky country, Australia must become the clever country." How many times since have we heard those words, from how many politicians of all political stripes?

But they're still just nice warm words, with little effort to create a sustained reality. Here we still sit, like lotus-eaters. Grown in China of course.

ray@ebeatty.com