The Australian economy is evolving rapidly, driven by new technology, shifting demographics and changing consumer preferences. Australia has enjoyed 28 uninterrupted years of economic growth. Job creation is high, with 1.2 million new jobs created in the last five years1, unemployment is relatively low at 5.1 per cent2 and the federal Budget is projected to return to surplus next financial year.
We are also facing global economic challenges that will impact Australian businesses and the community more generally. Weak wage growth3, rising costs of living4 and a protracted slowdown in productivity performance are all placing a strain on households and businesses. The department helps to address these challenges by working with key partners across the economy to drive future growth and business capability development. We do this by supporting businesses to innovate and adopt new technologies, encouraging business–research collaborations to develop and share new ideas and helping businesses access new markets.
We are in the midst of a fourth industrial revolution, marked by the transformative technologies associated with digitisation, automation, big data and artificial intelligence. Technology is key to improving the productivity and competitiveness of Australian businesses, and advances in these transformative technologies have the potential to create new jobs, raise incomes, and deliver a better quality of life for all Australians. Australia’s ongoing economic success and standards of living depend on our ability to ethically harness technological advances. Data 61 estimates that improvements to existing industries and growth of new industries could be worth $315 billion to the Australian economy over the next decade.5
As a department, we have a key role in bringing together expertise across the business and research communities to develop and share new tools and technologies.
Science and research will continue to drive advancements in knowledge and improvements in living standards as new discoveries are made and applied, while governments and industry look to scientific knowledge and skills to meet local and national needs. Australian businesses are our major investors in research, spending $16.6 billion in 2015–16 and employing over 70,000 full time equivalent research staff.6 Our challenge is to drive further investment, enabling strong commercial returns from research and encouraging innovation across the economy. To achieve this, business and government must work in partnership with the community. The department supports this by leading and influencing key policy settings, helping to set a vision for the future, and establishing institutional arrangements, rules and regulations.
As technology brings the world closer together, global competition is intensifying. Australia must navigate changing strategic and trade dynamics in the Indo-Pacific and increase our economic security as a core component of our national security. With the growing importance of regional partnerships, the department helps build valuable international networks and supports Australia’s scientific community to showcase our scientific and technological excellence at home and abroad. The department also helps SMEs access export markets to become more globally competitive.
Australia’s globally competitive resources sector underpins much of our prosperity and delivers benefits for our communities, particularly in regional Australia. Together with mining services, the resources sector makes up over 8 per cent of Australia’s economy and generates over $200 billion in exports7 per annum. However, competitive pressures in the resources sector are expected to intensify. Investment attraction, technological development, and the portfolio’s ongoing work to provide an effective and safe regulatory environment will all be critical as we seek to develop new resource projects and expand into new markets.
Ultimately, our ability to take advantage of these global shifts will come down to the skills of our workforce. Improving skills, including supporting basic science, technology, engineering and maths (STEM) skills for all, is fundamental to getting more Australians secure good jobs in a changing economy. By 2040, we expect that Australians will on average acquire 41 per cent of their knowledge and skills after they turn 21, up from 19 per cent today.8 As careers become more diverse and technology opens up new ways of working, we will need to increase our commitment to life-long learning, digital literacy and better business management. Australian businesses, governments and workers will all have an important role to play in this.
1 ABS (2019) Labour Force, April 2019 (cat. no. 6202.0).
2 Ibid. Trend data.
3 ABS (2018) Average Weekly Earnings, Australia (cat. no. 6302.0); and ABS (2018) Consumer Price Index (cat. no. 6401.0)
6 ABS (2017) Business resources devoted to research and experimental development (R&D) (cat. no. 8104.0)