Working together to create a more resilient Australia

| February 2, 2021

Ambassador Sinodinos welcomed the opportunity to reconnect with the GAP community and echoed the definition of resilience as the ability to adapt well in the face of adversity, trauma and other sources of stress.

An economist by training, he viewed resilience before 2020 in terms of market flexibility and agility, including Australia’s response to the Asian financial crisis and the resources boom, which saw the accommodation of major economic change without the ‘boom and bust’ policies of the 1980s and 1990s.

However, he thought that the concept of resilience should now be applied in a much broader way to Australia’s people and communities, encompassing the climate as well as economic potential and the nation’s relationship with the USA.

National resilience ultimately relies on making the best use of the talents of every Australian. Barriers to economic participation should be reduced by promoting diversity and inclusion in the workplace and leadership positions in the public and private sectors.

Ambassador Sinodinos called for better recognition of the contribution made by different cultures to modern Australia, including the Indigenous people who have proved sturdy, resilient and adaptable in forging a living from Australia’s harsh and unforgiving environment for 60,000 years.

Diversity and inclusion generate economic benefits, as well as being a public good, and making the most of everyone’s capabilities is ‘a rising tide that lifts all boats’. Australia should also leverage its increasingly multicultural society to maximise the nation’s international influence, and make the most of established and emerging cultural communities to build trade, investment and personal links all over the world.

A more cohesive society will be a more resilient society, and equality of opportunity and social mobility will help address income and wealth disparities which, if left unchecked, can undermine trust in institutions and social unity.

The Ambassador recommended the book Why Nations Fail for further reading. Australian institutions should encourage, rather than inhibit, economic mobility, as offering people hope for a better future gives them a stake in society, increasing their willingness to pull together when required.

Social mobility and economic opportunity in turn depend on access to high-quality education and training. This education should not be too narrow, as personal resilience is a function of many factors, including a happy family life and a sense of self-worth, as well as the skills to manage and adapt to change in the new world of work.

People need to learn how to learn and acquire general knowledge as well as specific occupational skills. These attributes include the ability to think critically in an age of information overload, be creative and empathetic, and develop other soft skills to help them understand and work with others. As one senior businessman noted some years ago, intelligence is ‘IQ plus EQ divided by two’.

These skills and attributes will generate the innovation on which Australia’s future will depend and help diversify its economy and investment opportunities. They will make this country a premier society, arts and culture.

This will further extend Australia’s comparative advantage in science and research, underpinned by a highly educated workforce, excellent institutions of higher learning, and world-class research bodies such as CSIRO, Australia’s Nuclear Science and Technology Organisation, the Institute of Marine Science, and the Australian Space Agency.

Innovation will reduce Australia’s dependence on foreign nations’ demand for our primary goods, and allow us to take charge of our economic destiny by adding value and commanding a premium in global markets by continuous improvement and adaptation to changing tastes and technologies. This in turn will require a culture that rewards risk-taking and entrepreneurship as well as competitive economic policy settings.

Smart manufacturing will create world-leading products in aerospace, food processing and medicine, while a less risk-averse research and commercial sector will translate academic theory into commercial practice more effectively.

Australian tertiary institutions are still more cautious about commercial applications of research than their American peers, but development incentives and co- location and innovation precincts can drive a more commercial mindset in universities and encourage businesses to search for research partners.

Government can drive innovation by underwriting long-term investments in basic research, as Australia’s large-scale science facilities generate the data and ideas that underpin inventions and new applications.

NASA exemplifies this approach in the US, as its research and space activities have generated significant spin-offs in terms of new industries and earth-bound applications. Government can also invest in new and potentially world-beating capabilities such as quantum computing to build on the work of Prof Michelle Simmons AO at the University of NSW.

Government procurement can offer innovative new companies the sales they need to get started, but this will require a greater tolerance for failure, as not every new firm will be a success. Entrepreneurs should not be penalised for failing, if they learn from their mistakes. A risk-based culture within government as well as outside it will support entrepreneurial innovation and create the partnership required to handle climate change and other issues.

Climate change can be viewed as a problematic challenge to legacy industries or an opportunity to create new environmentally friendly goods and services and invest in low emission technologies, electric vehicles and battery storage.

Greater demand for rare-earth batteries will benefit the mining industry, although a lower-carbon economy will have implications for communities which rely on traditional industries and energy production. Australia and other nations have managed such transitions before by empowering ‘rust belt’ communities to deal with change. Communities that own these changes will not be afraid to adapt to new paradigms.

Newcastle and the Hunter Valley faced the end of steelmaking two decades ago, and, once the grieving was done, their communities came together to chart a new economic future by building on local talents and capabilities.

They accepted the inevitability of change, took ownership of the process, and drove their own vision of the future, aided by government support and the University of Newcastle. Regional tertiary institutions like Newcastle and the University of Wollongong are important drivers of local growth and development through their role as hubs for innovation and specialisation to generate comparative advantage.

COVID-19 prompted debate on supply chain vulnerabilities and the need to produce more vital supplies at home or source them from regional allies. Similar concerns were raised in the USA, but this does not require a reversion to self-sufficiency or new trade barriers to protect inefficient local industry.

The solution lies in creating new opportunities with trusted partners, including the USA, in terms of new energy technologies, artificial intelligence (AI), machine learning, quantum computing, hypersonics, aerospace, cyber-security and information warfare.

National resilience is built on personal and community resilience and working with others, including trusted partners abroad, to create a better world.

This is an edited summary of Ambassador Sinodinos’ keynote address presented at the ‘A Vision for Australia 2020’: GAP Virtual Summit on National Resilience.’