INTHEBLACK April 2022 - Flipbook - Page 40
F E AT U R E
// B O O S T I N G P R O D U C T I V I T Y
THE 3Ps FRAMEWORK
• Fertility rate
• Mortality rate
• Net overseas
• Participation rate
by age & gender
• Average hours
worked by age
• Domestic prices
• Export prices
• Import prices
PER UNIT OF INPUT
others do business and innovate has a huge impact on
productivity,” she says.
The Australian Government must also work
to enable private companies to make good use of
technology in certain sectors, such as energy and digital
“For example, in Australia, we have a problem with
energy policy, because there is very little certainty for
firms,” she says.
“When you talk to operators on the ground, it’s
causing problems because they might have a renewable
technology that is very efficient, but because the policy
framework isn’t clear, Australia is not in an optimal place
to encourage the private sector to invest and investigate
these new technologies.”
A NEW INDUSTRIAL REVOLUTION?
Productivity is so crucial to a nation’s future fortunes
that Carmignani argues that what is required is a new
The most recent was the IT revolution that began in
the 1960s, he says, but its impact is slowly ebbing.
“Now, that might sound controversial when it appears
that every day you have a new kind of iPhone appearing,
but these new things are evolutionary in nature, not
revolutionary,” he says.
“Productivity is linked to new discoveries, and so I
don’t want to sound pessimistic, but in order to increase
productivity, we need another industrial revolution.”
Where is the next industrial revolution likely to
emerge? “The answer, I believe, is a green technology
40 ITB April 2022
revolution that boosts productivity growth and economic
growth,” Carmignani says. “The first step in this process
is a scientific breakthrough, and then entrepreneurs
see the commercial potential from the discovery you’re
bringing into the economy, and the process takes off.”
It’s important, however, to not try to “pick a winner”
and fund one sector only, Carmignani warns.
“There is a temptation for governments to decide
that the next big wave of innovation will happen in a
particular area,” he says.
“Green technology, for example, could be developed
across a multitude of sectors – it doesn’t need to be solar
panelling or electric cars, it could be in bio-medics.”
Either way, he argues Australia needs to use
government money, via tax exemptions or other forms
of support, to fund ideas tied to specific milestones.
“That way, we can track the extent to which these
ideas grow into real innovation,” he says.
If a new industrial revolution stalls, then there could
be real consequences for the Australian economy.
“You project the current trend over the next two
or three decades, and you go back to zero growth,”
However, there is a positive note to Carmignani’s
“Armageddon-like” scenario of the decline in the IT
revolution, and it is this – this is not the first time that
a wave of industrial revolution has come to an end.
“It happened with the first Industrial Revolution,
and then a second one came along,” he says.
“So, in the past 300 years, we have always been able to,
at some point, generate the next wave of growth.”