5 years ago, I spoke at the Mumbrella conference on why Australia – “the lucky country” – needs to become “the clever country”. It seems like an opportune moment to take a look at my original content to see what has changed – for better and worse.
At the time I remember being frustrated at Australia’s complacency when it comes to competing on the world stage as an Innovations leader. We seemed to be relying on digging raw materials out of the ground rather than adding value and selling our thinking to the world.
I’m pleased to say that there have been some notable success stories in the last 5 years. Technology business Atlassian has gone from strength to strength and we have seen the emergence of tech unicorns like Canva proving that our thought leadership can match the best in the world.
Despite all this I can’t help but think that we are still slipping behind in a world that is racing ahead. Covid19 increases our need to adapt to the new world economy as we see a dramatic acceleration in ecommerce and virtual working.
So what can we do to ensure the Australian economy is future ready?
1. Double down on technology
Technology is the new gold, that’s why Apple, Google and Amazon are the largest companies in the world. But where is our next Atlassian and how are we using intellectual capital in Australia to commercialise our thinking and applying it to technology?
Since the start of Covid19, Australia Post has facilitated an additional $2.4 billion in e-commerce related deliveries. Overall, we have seen an 80% increase year on year on e-commerce transactions and remote working becoming the new normal. Most organisations are re-thinking the future of work. How can Australia leverage this moment in time? Virtual working, e-commerce, business process efficiency and seamless customer experience(CX) are just a few of the sweet spots.
2. Make China our friend not foe
While our relationship with China is currently at an all time low, there is no denying that the freight train is not about to stop any time soon.
By 2022, it’s predicted that more than 550 million of China’s 730 million urban population will be considered middle class. In comparison, Australia’s 25 million population has 14.5 million middle class which puts the size of market opportunity in context. We’ve seen businesses like A2 milk and Blackmore’s benefit from China’s middle class.
However, the landscape is changing rapidly and there’s a need for Australian business to understand the market, cultural and structural differences in China. E-commerce is the norm for consumer goods in China, meaning channel innovation is ripe for opportunity.
3. Innovative customer experiences
According to a recent CBA report customer factors are the number one driver of Innovation in the Australian market. Building a customer experience with less friction is a key driver for future growth. If you need evidence to prove the value of a seamless customer experience look at Amazon and its ability to lock customers into its eco-system. Amazon Prime demonstrates that a better experience can be achieved online through same day delivery rather than visiting a store. It’s great to see a home-grown company like Kogan emerging in the current climate. In financial services, Afterpay are re-inventing the model with interest free loans and less paperwork. This model serves the customers and the retailers’ interest rather than the financiers.
4. Using our natural assets for sustainability
It’s often been said that we are better placed than most countries in terms of natural resources. We have a huge continent with abundant access to solar and wind powered energy. We are past the tipping point on sustainability with most companies setting ambitious targets over the next few years.
Oxford academic Kate Raworth’s theory on “Doughnut economics” is interesting. She uses the analogy of the circles in a doughnut as the boundaries from which to build a sustainable society. The inner circle represents social boundaries and needs, and the outer circle represents environmental boundaries. How do we reach an optimal point in which we are managing our resources in a sustainable manner while at the same time providing for our society’s needs? Tesla has shown us that we need to think differently, rather than seeing themselves as a car company they see themselves as an alternative energy company that also sells solar batteries and roof tiles. Moreover, their products outperform the traditional alternative. Surely, Australia could play a larger role in sustainable business, it makes environmental sense but is also proving to make good business sense.
5. Big D design
I’m a true believer in the power of innovative design to translate into business success. Apple and Dyson lead the way on product design, Google on usability design and Disney on experience design. Design is not simply about aesthetics – it’s about achieving a competitive point of difference and building shareholder value which we refer to as Big D design.
In recent years McKinsey has developed a design index which demonstrates that companies with a top quartile design index score outperform other companies on growth, revenue and shareholder value. Australia has exceptional design schools and award-winning designers. How can we leverage this further and take Australian companies to the world?
In reality, we are a clever country. We have an education system that is the envy of the world and a history of inventing everything from antibiotics, bionic ears(Cochlear) and wifi. In my original speech, I commented that we have the smarts as a country. We just need to commercialise that thinking and then take it to the world – and that requires better collaboration between the different sectors of the Australian economy. If Universities, banks, entrepreneurial businesses and government join the dots we can be unstoppable.
It’s time for the clever country to become the future country.
Dominic Walsh: Youtube Talk
Breaking China, How Succeed Worlds Second Largest Economy
Commbank Business Insights Report: Unlocking Everyday Innovation (pdf)
Doughnut Growth Economics Book: Economic Model
The Business Value of Design
Kate Raworth: Doughnut
Australia Post Delivers 26 Million