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Technology will be at the heart of new industries

Editorial
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Australia is fortunate to have a perfect solution for some of the challenges facing manufacturing. It’s just that the ones wielding power are unwilling to act in the interests of our industry.

We’re referring to liquefied natural gas (LNG) and the great promise it holds. Manufacturers around the country are grappling with increasing energy costs while we sit on one of the world’s largest LNG supplies.

In 2013, research from Manufacturing Australia reported almost 200,000 Australian jobs could be lost and up to $28 billion in economic value wiped out if federal and state governments fail to intervene to ensure competitively priced gas remains available for Australian manufacturers.

The alternative is indeed scary: a loss of 12 per cent of manufacturing value and 9 per cent of manufacturing jobs caused directly by the shortage of LNG and the price rises that will inevitably result.

Other gas-rich countries, such as the US, are taking concrete steps to ensure that their abundandant energy resources are an asset not a liability.  Why can’t Australia do the same?

Western Australia alone seems to have the right idea as the state government reserves 15 percent of gas resources from each LNG venture to supply domestic users. However, even in WA, LNG makers have a loophole – floating LNG is exempt from this proviso. And there are a couple of large FLNG ventures off the WA coast.

It’s time for politicians of all shades to demonstrate the required degree of farsightedness before public opinion forces change upon them.

One of the interesting personalities to recently visit our shores was the renowned futurecaster Michio Kaku. His prediction? Countries that do not better harness their intellectual assets and focus on ­science-based industries would suffer great poverty.

His belief is that new jobs will be created only by new industries powered by technology-led intelligence and connectivity.

What’s interesting is that the drivers for change will not necessarily be large companies.

Recent research from PwC suggests that transforming Australia’s SME laggards to leaders in their use of technology could increase the country’s GDP by nearly $6 billion, increase real wages by 0.5 percent and raise revenue in the economy by $11 billion.

Between 2010 and 2012, those SMEs that were regarded as leaders in the adoption of technology increased revenues 15 percentage points faster and created jobs at twice the rate of less progressive firms. A key reason is that the latest wave of technological advances such as mobile communications, cloud computing and social media are giving SMEs access to capability that was previously only affordable to large corporates.

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