Greg Combet outlines three key areas in need of Aussie innovation

The business sector must “lift its game” in contributing to the economic policy debate, according to Industry Minister Greg Combet, who has identified opportunities and challenges for business.

Speaking at the National Press Club in Canberra yesterday, Combet said businesses under pressure during times of “structural change” must become more competitive in order to survive.

“Support should foster investments in capital, skills and innovation,” Combet said.

Combet said while the focus is currently on Asian demand for Australia’s resource exports, economies such as China and India will become major new markets for other exports.

“Australia earned more from providing education, tourism and other services to China last year than from selling coal to that country,” Combet said.

“As Asia grows, its consumers will want to buy more of what Australia has to offer in areas such as energy, water, agriculture, business and financial services, education, tourism, health, and high technology manufactures and services.”

Combet identifies three key areas in need of innovation:

Clean energy

“Pockets of our modern economy have been starved of capital investment, leaving us with ageing technologies, and inefficient energy supply and consumption,” Combet said in his speech.

“The Clean Energy Future package will contribute towards modernising these parts of our industrial base. It will drive investment in cleaner energy, low emissions technologies and energy efficiency.”

“From 2020, all nations face binding obligations to reduce emissions and our major regional trading partners – in particular China and India – will expect us to deliver along with them.”

“We are, after all, the highest per capita emitter of greenhouse gases amongst developed economies. Anyone who thinks we can do nothing is kidding themselves.”

Automotive manufacturing

“Australia’s automotive industry competes on both domestic and export markets [but] the high dollar has eroded motor vehicle exports,” Combet said.

“The reduction in volumes has flow-on effects to the supply chain, given that 80% of its sales are to the domestic motor vehicle producers.”

“There are 46,000 workers directly employed by the sector and 200,000 jobs in total supported by car manufacturing.”

“It trains the engineers, invests in the equipment and technology, and drives the innovations and capabilities which other parts of our manufacturing industry can adopt.”

Combet said the government is considering proposals on the future of Australia’s manufacturing operations.

In considering these proposals, the government will look at how Australia can contribute to the knowledge-intensive end of motor vehicle manufacturing, engineering and design.

Aluminium production

Combet said the aluminium industry in Australia is under extreme pressure, partly because lower international prices have been exacerbated by the higher Australian dollar.

“This is an energy-intensive industry, so the parent companies are looking for clean energy sources in the emerging low-carbon global economy,” he said.

“The future of the aluminium industry lies in lower-carbon production and, if we are to retain a strong industry, we must have a mature economic discussion about the real issues.”