Living in Australia and observing the rest of the world through the media, I’ve felt that while the rest of the world has been tightening its belt and trying to become more efficient, Aussies have been blissfully unaware they are going in the other direction.
Life styles and living conditions remain pleasant, wages have been going up, and there is little desire within business and government to really address productivity.
It’s also evident that while Australians are embracing technology at home, business is slow or indifferent about investing in digital change.
Put together, its clear that Australia needs some fundamental game changers to sort itself out and get to a point where business is happy to invest in technology to drive productivity
I was unsurprised to see statistics released before Christmas by the US Bureau of Labor Statistics showing that Australia has indeed become a high cost, low productive country.
Of the 19 countries the US BLS studied between 2010 and 2011, Australia experienced:
Austerity measures in many other developed countries have forced through productivity improvements.
Australians by contrast have been living in a relatively comfortable economy with rising wages and a strengthening dollar that has bought them more. Why strive for productivity for no apparent need, especially when the sun seems to keep shining everyday?
Australian businesses are technology followers, not pioneers. This is somewhat at odds with its consumers who, despite some infrastructure constraints, are relatively quick adopters of new technology (Australia for example has one of the highest penetrations of smart mobile devices).
Conservative business leaders continuously defer to what is working well in the US or UK before they consider investment (and I think for the historical reasons mentioned below, it generally is just these two countries). We have no national technology champions that provide the inspiration to challenge this mindset.
Australia is also has no digital economic cluster to speak of. While few countries can match Silicon Valley, the UK at least has Cambridge and Old Street, China has Zhonngguancun in Beijing, and Israel has Silicon Wadi around Tel Aviv. Such clusters not only foster innovation, they are also a visual demonstration to other businesses that technology can be harnessed.
I’ve been reading assessments of Australian culture by far smarter people than me and it strikes me that long held cultural beliefs are behind the low appetite to back new technology and address productivity
Australian industrial and commercial structures also provide few incentives for technology led productivity.
The controversial words of Donald Horne from the 1960s book ‘The Lucky Country’ unfortunately still have meaning.
“Australia is a lucky country mainly run by second rate people who share its luck”.
The sad reality is that many of Australia’s business and political leaders have limited vision, low ambition and low appetite for risk compared to counterparts other countries. Julia Gillard (prime minister) and Tony Abbot (opposition leader) seem to only trade in mediocrity and few of the Australian C-suite managers I’ve met seem inspirational.
Low quality political leadership is reinforced through the short 3 year election cycle that provides no opportunity for governments to make the hard choices that will be unpopular in the short term but benefit productivity in the long term.
The general level of digital ambition among Australian businesses remains relatively low in the apparent absence of inspirational digital business leaders and limited awareness of Australian companies with proven digital track records.
Technology, digital communications and a strong currency have combined in the last three years to break down Australia’s geographical isolation and expose its businesses to the genuine global competition
I think Services are likely to be the next sector exposed to technology led competition as lower cost international providers crack the challenge of delivering a high quality service from overseas.
Embracing change means tackling productivity before being are forced to and adopting the attitude to technology investment that international competitors have.
Australia has potentially more to gain from technology and communications led productivity than most countries. Its high labour cost and dispersed population mean that the impact from more efficient processes and reduced physical transportation should be greater.
But as a nation we need some game changers to break through embedded structures and cultural obstacles.
Here are the game changers I would like to see