As a Melbourne Business School (MBS) student, attending ESOC has been a rewarding learning experience. It has afforded me the opportunity to see how theories and concepts I have learnt within a University environment can be applied in practice.
Today, we are living in an age marked by unprecedented shifts in the global economy and society, such as the rise of Trump, vast economic growth in Asia, innovations in technology and climate change. These dynamic changes in the global environment yield significant challenges for individuals, businesses and governments. Moreover, factors such as automation, the loss of low-skilled jobs and rising inequality disrupt the status quo. In Australia alone, we are witnessing extraordinary changes in the economy and society, such as the death of the automotive manufacturing industry and the growing debate surrounding consumer data usage by the public and private sector. However, despite these challenges, new opportunities and industries are arising through smarter energy initiatives and fostering technological innovations that contribute to increasing economic growth and prosperity in Australia.
Co-hosted by the Melbourne Institute and The Australian Newspaper, the Economic and Social Outlook Conference (ESOC) 2017 provides a forum for prominent politicians, academics, media, and industry to engage in discussion and debate surrounding public policy and research findings. A prominent theme discussed amongst the panels: Cities and Productivity, New Directions in Public Policy and Innovations in the Workplace, was focused around how effective public policy can facilitate the development of ideas and solutions to foster employment, increases in productivity and economic growth.
Cities and Productivity
Moderated by Professor Allan Fels AO (Professorial Fellow, The University of Melbourne), the “Cities and Productivity” Panel was comprised of speakers:
- The Hon. Angus Taylor MP (Assistant Minister for Cities and Digital Transformation)
- Professor John Haisken-DeNew (Professorial Research Fellow, Melbourne Institute, Applied Economic & Social Research, The University of Melbourne), and
- Ms. Sarah Hill (Chief Executive Officer, Greater Sydney Commission)
Productivity gains, realised by raising output per worker to increase living standards, are vital to the economy as they maximise use of scarce resources- capital and labour. This panel delivered to attendees’ practical and implementable solutions to substantive issues facing Australians today, such as the elimination of the automotive manufacturing industry in South Australia and Victoria, and the development of multiple employment hubs across central and greater Sydney.
Professor Haisken-DeNew’s research findings propose a viable solution to structural unemployment resulting from the closure of the automotive manufacturing sector in Australia. Haisken-DeNew suggests that the base level skills required by auto workers in their present professions serve to be transferrable to the “Smarter Energy” industry with minor additional reskilling qualifications required. Smarter Energy refers to the use of renewable energy sources such as lithium-ion (LiON) batteries, solar and wind. The adoption of renewable energy as a means for electricity distribution has been proven in Toronto, Canada. Toronto Hydro is trialling energy storage devices via LiON batteries storing 15kw hours of energy aimed at supplementing consumer needs during peak hours. More importantly, Haisken-DeNew’s research uncovered that individuals employed in this Smarter Energy industry were former auto workers who were made redundant during Canada’s elimination of the vehicle manufacturing sector. Thus, he believes sustainable energy initiatives such as Toronto Hydro can be replicated in Australia, with positive effects on employment rates, productivity and economic growth, as well as environmental benefits.
Similarly, increasing productivity is central to the goals of the Greater Sydney Commission, which they plan on realising through the development of the “Three Cities” approach. Eponymously named after the Italian physicist, Marchetti’s constant pertains to the ideal average one-way commute time of 30 minutes for an individual. However, few cities in the world have realised this rule, and Sydney is no exception. The population of Sydney is projected to grow from 4.5 million to 8 million by 2056, and there is increasing demand for housing and need for better infrastructure. Consequently, the Commission is coordinating urban planning with the aspiration of creating three 30-minute cities with individual work districts: the established Eastern City (Sydney CBD), Central City (Greater Parramatta) and the Western City (Greater Sydney and home to the new airport). This polycentric approach to city planning serves to maximise productivity, sustainability and liveability for the Sydney population as it continues to expand in the future.
New Directions in Public Policy
The “New Directions in Public Policy” Panel was comprised of speakers:
- Professor Mark Wooden (Professorial Research Fellow and Director, HILDA Survey, Melbourne Institute, Applied Economic & Social Research, The University of Melbourne)
- Dr. Alex King (Director, Behavioural Insights, NSW Department of Premier and Cabinet)
- Dr. Yi-Ping Tseng (Senior Research Fellow, Melbourne Institute, Applied Economic & Social Research, The University of Melbourne)
This panel revolved around debates concerning the cultivation and use of big data, which encompasses administrative, transactional, surveys, social media and networking information, the advantages of data linkage and the critical issues surrounding data sensitivity regarding consumer behaviour in both the private and public sector.
A key takeaway from this panel pertain to data linkage. Linking data includes combining pieces of information such as an individual’s Centrelink payments to their tax payments. Data linkage is a critical means in developing more effective public policies as they become evidence based, and not simply built upon assumptions. Conversely, assumptions-based public policy has been proven time and time again to be ineffective in both time and money. This can be demonstrated through the “Scared Straight” program implemented in the United States of America (USA). The “Scared Straight” initiative was aimed at deterring at-risk teenagers and juvenile delinquents from engaging in criminal behaviour by exposing them to adult inmates serving prison sentences. Despite the popularity of the program, this assumption-based policy proved ineffective, and furthermore increased the odds that exposed youths would engage in criminal offenses in the future.
Innovations in the Workplace
Chaired by Ms. Dee McGrath (Managing Partner, IBM Global Business Service, Australia and New Zealand), the “Innovations in the Workplace” Panel was comprised of speakers:
- Mr. Mark Cully (Chief Economist, Economic and Analytical Service Division, Department of Industry, Innovation and Science)
- Professor Paul Jensen (Deputy Dean, Faculty of Business and Economics, The University of Melbourne)
- Ms. Lisa Gropp (Chief Economist, Business Council of Australia)
A common sentiment in many countries, not only in Australia is that there is plentiful good idea generation, but difficulties in commercialising innovations. Innovation in the workplace is a means for increasing productivity in Australia, creating new job opportunities improving business performance and profitability. Per the Oslo Manual, innovation active firms are businesses that have undertaken any innovative activity or process regardless of the stage of development or abandonment during the period of reference.
At present, productivity levels in Australia relative to the USA are far behind the productivity frontier. Speaker Mr. Cully proposed several methods to foster an environment to not only generate innovative ideas, but also to commercialise them. These include: ensuring firms performing best in Australia can perform better, raising productivity of all businesses through the encouragement of innovation, encouraging businesses to improve performance (e.g. hiring business advisors for underperformers, and enhancing competition to drive out underperforming firms.