Innovation in regional Australia, the development of a universal Australian ‘clean’ brand and partnering with global markets are key to unlocking long-term economic growth, according to primary industry leaders interviewed by research institute, State of Play, in partnership with global consulting firm VCI and the University of Western Australia.
The State of Play: Primary Forces report interviewed 19 of Australia’s most innovative industry leaders, including the head of Rio Tinto Iron Ore, the Chairman of AGL, and the CEOs of Western Australia’s Water Corporation, Horizon Power and Synergy.
The report uncovers the strongly held belief that in the era of global uncertainty in international trade, Australia must focus on unlocking economic value from regional centres and integrating with our Asian markets.
The report finds that industry leaders are frustrated with a lack of diversity and openness when dealing with Asia, and despite in mining, agriculture and energy sectors representing over 55% of our exports to the region, the proportion of boards with experience in working in Asian markets was less than 20%.
As consumer expectations in these markets increase, these leaders see a unique opportunity to leverage Australia’s reputation for clean, ethical production of goods.
“There is a huge upside to provenance into China, we haven’t even scratched the surface” says Matt Taylor, CEO of the Western Rock Lobster Council. The lobster industry sees a clean and ethical brand as a key competitive advantage against less reputable competitors in the global fisheries industry.
This brand is driven by the community enforcing a social license to operate, especially in the mining industry.
“Social licence is becoming our greatest disruptor. Understanding what’s happening to our customers and how their expectation of products that buy is changing – this is critical and largely driven by tighter environmental pressures” says Chris Salisbury, CEO of Rio Tinto Iron Ore.
These two competing forces, customer expectations and community-driven social license to operate, are presenting a competitive advantage for Australian industry. To capture that value, regional Australia is fast becoming an incubator for innovation.
“The development of Northern Australia represents the biggest opportunity of our time to build resilient infrastructure to unlock the vast onshore and offshore energy, mineral resources and food opportunities to service the growth Asian markets” says Water Corporation Chairman, Mike Hollet.
This development will require innovation and investment, according to Dr Graeme Stanway, founder and Chairman of State of Play, and a Founding Partner of VCI.
“Most breakthrough innovation occurs where the greatest needs are” he says. “High expectations from both customers and community drives need, which in turn drives the innovation that ensure that Australia remains competitive in the global market”.
Dr Stanway believes that collaboration across industries is crucial in solving shared constraints. “Australian primary industries are facing similar constraints, the most effective way to overcome them is to collaborate and innovate together”.
Graeme Hunt, Chairman of AGL, is also concerned with the lack of cohesion in the approach to Australian economic development.
“We need to agree on points that are critical for growth as a nation”, he says. “The pace of change is so high in technology, you always need to have a foundation that you can rely on that is not going to vary as much as the environment around you.”
As Chairman of Western Australia’s state-wide water utility, Hollet knows well the pressures of regional development.
“We know that water is essential for life as it is fundamental to our economy and the growth and prosperity of our communities across the vast State of Western Australia,” he says.
“Looking at the synergies and integration of water and energy resources, particularly in our remote North West where emerging economic opportunities abound, applying a fit for purpose approach should help lower costs and deliver more environmentally sustainable outcomes.”
To capture the value of regional Australia, the report finds that empowerment of Indigenous peoples as an economic force will be crucial.
“Partnerships that lead to greater self-determination of Aboriginal people will be a key fundamental measure of success,” says Hollet.
Eddy Fry, Chair of Indigenous Business Australia, agrees. “The future of Australia will be very much tied to the long-term planning of Australia’s regions and urban settings”, he says. “This takes into account the future role, accountability and responsibility for the strategic investment direction into Indigenous Australia and its Estate.”
All reports are available to download at www.stateofplay.org