A further slowing in growth
The effects of COVID-19 will be felt for years and cut across all prisms of life as we know it. What does Australia’s National Outlook look like now?
Last year, CSIRO released the landmark Australian National Outlook 2019 (ANO) report, which outlined a vision for Australia in 2060 with prosperous and globally competitive industries, inclusive and enabling communities, and sustainable natural endowments. The ANO combined input from over 50 senior business leaders with CSIRO’s research and modelling to identify five major, generational shifts Australia will need to undergo to achieve this vision. It also outlined six significant challenges Australia will face along the way.
The COVID- 19 pandemic and the devastating bushfires of last summer have put many of these challenges into greater focus. With Australia in its first recession in 30 years, now is a good time to revisit the key findings of the ANO and look at how Australian businesses can put them into action.
For example, modelling in the ANO showed how investments in science and technology can spur economic growth by boosting productivity in established industries and creating new industries based on emerging technologies. In the report’s ‘Outlook Vision’ scenario, GDP per capita is as much as 36% higher in 2060 than the base case, with around threequarters of the difference attributable to technology investments.
In the past six months, we’ve seen first-hand how science, technology and innovation can help address urgent challenges. In response to COVID-19, we’ve seen leaps forward in our national adoption of innovative digital services like telehealth, the mass movement to digitise our workforce, and the rise of agile manufacturing to scale up vaccines and the production of critical products like face masks. Now we have an opportunity to build on that momentum by accelerating our investment in science and technology to boost our economic recovery and build long-term resilience and sustainable growth.
In a recently released report, CSIRO outlined 16 near-term opportunities for investment in science and technology across six key sectors of the Australian economy: food and agribusiness, energy, mining, healthcare, manufacturing and digital. These opportunities could all contribute to Australia’s economic recovery from COVID-19. The report also identifies longer-term opportunities that could help our industries build resilience against the next big shock.
The ANO highlighted the risk that a changing climate would contribute to more extreme weather events, including extended periods of drought and longer bushfire seasons. Although we are past the point of eliminating this risk, we can minimise its impact by reducing greenhouse gas emissions to keep the global average temperature increase below 2 degrees Celsius.
We now have an opportunity to reboot our economy through a ”green recovery”. Modelling in the ANO showed that Australia can achieve net zero emissions by 2050, while still experiencing strong economic growth. There are three main levers we can pull to achieve this: increasing our energy productivity, decarbonising electricity generation, and investing in opportunities for low-emissions energy export. Advances in science and technology will underpin each of these levers. For example, hydrogen (or other energy carriers like ammonia) could be a lucrative new export opportunity for Australia that utilises our world-leading renewable energy resources (sun and wind). This could be particularly important considering that global demand for thermal coal could decline by as much as 70% by 2060 if the world takes serious action to mitigate the impact of climate change.
This year has demonstrated that the challenges we face are not just abstract ideas; they have tangible impacts on our prosperity and wellbeing. This is our wake-up call to take the bold action needed to secure a prosperous future for Australia. What do business leaders need to do to address these challenges and capitalise on new opportunities?
1. Invest in science and technology to gain a competitive advantage in the COVID-19 recovery
The current pandemic and preceding bushfires showcase the important role of science and technology to solve our greatest challenges. Technology also plays an important role in creating competitive advantage in existing industries by boosting productivity and enabling new products and services. Furthermore, evidence suggests that large firms that invest more in R&D and prioritise intangibles perform better than firms that prioritise dividends.
2. Invest in workforce skills and capability development
These same technologies that are reshaping existing industries and creating new ones are also changing the skills that will be needed in the workforce of tomorrow. Businesses can invest more in the skills and capabilities of their workforce to ensure they are globally competitive, prepared for the technology-enabled jobs of the future, and adaptable to future shocks and disruptions.
3. Collaborate for greater impact
COVID-19 has highlighted how collaboration between businesses and with government can lead to rapid innovation, particularly for challenges and opportunities that are too large for any one organisation to tackle alone. Government, research and industry need to continue to work together to leverage their strengths for greater economic, environmental and social well-being.
As Australia’s innovation catalyst, CSIRO works with both large businesses and SMEs to help them identify science and technology-based opportunities and translate them into value for customers and shareholders. These opportunities will be critical to Australia’s economic recovery from COVID-19, and to our long-term prosperity.
This article was first published in our Corporate & Institutional magazine ‘Beyond 2020: Creating opportunities”. Read more articles from the magazine, below.
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