The urgent need for a “coherent industrial portfolio”

A top priority for Anthony Albanese’s new Labor government will be to build a cohesive and ‘joint’ industrial portfolio, according to innovation system expert and Port of Newcastle chairman Professor Roy Green.

A key to unlocking the pressing economic challenges facing the nation would be to rethink and revitalize Australia’s outdated industrial structure, Prof Green said.

The portfolio model that Mr Albanese set up in his shadow ministry was not a framework that would effectively address the challenges of Australia’s ailing innovation system.

Mr. Albanese, who should be sworn in as Prime Minister on Monday morning, had split the portfolio in two in the opposition.

Chairman of the Port of Newcastle and Professor Emeritus Roy Green

Deputy Labor leader Richard Marles had been appointed shadow minister for national reconstruction, jobs, skills and small business as well as science minister, while Ed Husic was shadow minister for industry and development. ‘innovation. And large parts of the research system fell under Shadow Education Minister Tanya Plibersek.

Professor Green urged the new government to look to successful international models to effectively join the different elements of the research and innovation ecosystem.

“The key is to first recognize the urgency of the challenge, the main economic components of which are sluggish productivity, stagnating wages and the enormous task of energy transition,” Professor Green told .

“And the common thread connecting all of these problems is our outdated industrial structure.”

“What I hope to see in the first 100 days is more detail on the strategy by which we meet this challenge. A very important part of this is how we revitalize our research and innovation system in this country, which has been left to languish for at least 10 years and probably more.

“Because during the commodity boom, our revenues were supported by high commodity prices and high terms of trade, while the other source of revenue – which is productivity – experienced a structural decline. .

“The big challenge is to solve these problems and to give an idea of ​​what the framework with which they will be approached will look like.

“This task is more than urgent. It should have been launched 20 years ago when we had the chance to do so and use the huge benefits of our commodity boom to support our future economy.

While it’s unclear what the structure of the industry’s broad portfolio would look like, Prof Green said Mr Albanese should look to a structure that combines elements of the national reconstruction fund, industry and innovation, science and research in a coherent portfolio.

“One thing I would say is that there are good examples around the world of how to build a joint portfolio that takes on the challenge of research and innovation,” he said.

A good example abroad would be the role and responsibilities of the Department of Business Innovation and Skills in the UK, which has recently added elements of energy policy.

The danger of having different parts of the innovation system separated across different portfolios meant that different ministers ended up pursuing their own isolated initiatives under their different ministers.

A senior minister and one or more junior ministers in a joint portfolio made more sense, he said. Mr Albanese is expected to announce his shadow ministry early next week.

While Australia’s commodities boom had been largely wasted, Prof Green said it was not too late to start redirecting the windfall from that boom into building future industries.

“During the commodity boom we have had, our revenues have been supported by high commodity prices and high terms of trade, while the other source of revenue – which is productivity – has experienced a structural decline,” Professor Green said.

Although there was a general consensus that the nation cannot rely on commodity prices forever, the industry portfolio had nonetheless been a low priority for more than a year. decade.

“The imperative for successive governments was to consider how to use the enormous windfall of the commodities boom to invest in the industries, technologies and skills of the future,” Professor Green said.

“Overall, we failed to do that, and we certainly failed compared to other countries that had tackled the same issues,” he said.

“The main and most striking international example is Norway, with its enormous oil and gas resources. He used the mechanism of a resource rent tax, not at 40%, not 20%, but 76%, to support the creation of the largest sovereign wealth fund in the world, which can now be channeled to their future research and innovation infrastructure. and therefore create jobs – high value-added, well-paid jobs – for future generations of Norwegians.

“We wasted this opportunity.

“But we can still act and act quickly to ensure that we reverse the process of the continuous shrinking of our commercial and industrial structure and pursue greater diversification which requires investments in industries which present a greater intensity of research and development. innovation,” Professor Green said.

Do you know more? Contact James Riley by email.

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