Why Australia must become a knowledge society

features-knowledge-economy-200The critical issues that confront our society are not even on the national agenda. While there are a number of currents running through contemporary society that have seismic dimensions, we yet have not even begun tracing them to determine the location of the fault lines.

For a start, here in Australia we are addicted to the so called two-tier economy where the mining industry is enjoying an express ride while the rest of the country is in low gear to reverse. In the meantime, politicians are playing games such as stop the music and revolving doors. Everyone proceeds on the assumption that good old China will pull us all out of the fire.

In management, we have a saying that there are only two types of situations. The first type is uncontrollable and the second is controllable. We know that there is no point in worrying about uncontrollable issues simply because they are beyond our control. Accordingly, we have to concentrate on controllable issues over which we have some influence.

What happens in China is beyond our control, while what happens here in Australia should be within our control. Yet we are besotted with China watchers who keep reassuring us that everything will be okay with our economy.

This might be fine for tomorrow, if by “tomorrow” we literally mean tomorrow, but is it fine for our long term future? Particularly for the younger members of the population and their children? I am not so sure.

We have been hoodwinked into this concept of a global society that depends upon ever increasing trade of goods and services between countries. While we have quite a bit of iron, copper and coal in our backyard, we have plenty to sell in this global community.

However, a couple of startling facts have come to my attention recently. Firstly, in an article in The Age on March 10th, Kermal Dervis, former Vice President of the World Bank, makes the point that the income share of the top 1% of the population of the USA has more than doubled since the late 1970s. This means that there is an aggregation of cash in the hands of the very wealthy, with a diminishing amount in the hands of the majority of the population. As this discrepancy grows, we will find that consumption will decrease because of the diminishing purchasing power of the majority with a consequential lessening of demand for goods and services.

The next issue that attracted me was the statistic that in China, there are seventy million cars to 1.5 billion people whereas in America, there are 80 cars per 100 people. With every person in China pursuing what might be called the “American dream” it would mean that to have the same saturation of motor vehicles as the US, there would be 700 million cars in China. That is not to mention the infrastructure that would have to be constructed to accommodate such a massive density of motor vehicles. There are simply not sufficient traditional resources in the world to support such a development.

Then of course, there are places such as India with another 1.5 billion people wanting their place in the sun.

To feed the expectations of the have nots in China and India, let alone the rest of the world, there are simply not enough resources in the earth, including those here in Australia, to meet these expectations.

Long before the exhaustion of the resources of the earth another constant will emerge and that will be the social unrest as a result of the inequitable distribution of wealth. Purchasing power will be concentrated in the hands of a few, impacting on the ability of the masses to buy their cars and refrigerators. People will demand their place in the sun only to discover that the life style we have enjoyed in Western society cannot be delivered to the new comers on the basis of traditional resources.

One assumption of public policy on both sides of the political spectrum is that China will continue to deliver the goods. But what did I say about controllable and uncontrollable events? China is not an event we can control and yet it is a basic assumption of public policy.

The issue of what we can control here in Australia is not on the National agenda. On the contrary, I see a continual erosion of the resources that need to be devoted to achieving our future and that of our children. Universities are poorly funded and badly administered; the failure of our public education system seems to be systemic with an intensification of sacrifice by parents to send their children to private establishments. Our bureaucracy has become so politicised that it is now dysfunctional and frightfully expensive.

Despite the sound bites of politicians, Australian public debt is zilch. We have one of the soundest economies in the world and the ability to use our financial strength to create new industries that will be able to address the issues that currently confront society. Australia is uniquely placed to become a knowledge society which can devote its intellectual muscle to developing solutions to the resource and social problems that form the fault lines of the future.

If we are to become the knowledge society we need to develop:

  • New sources of energy; new substitute renewable materials to meet the consumption expectations of those currently denied access to our Western life styles;
  • New ideas to address the frightful anger and conflict that results in recurring violence;
  • New ideas about administration to find an answer to the incompetence and failure of our bureaucracy;
  • Find ways in our public discourse to find common ground rather than constantly promote discord and disagreement.

We must elevate these issues to the top of the National debate.

Here in Australia, we do have the ability to control our future and that is by devoting resources to creating a new knowledge society that will be relevant to the enormous questions that are emerging in modern society. This is a huge challenge promising great opportunities, but it is not on the national agenda. Uncontrollable China is our addiction but controllable Australia has become the play thing of uninspired politicians. Until we can get the future of Australia on the national agenda we will continue our dependence upon uncontrollable China. We will also continue to be exposed to the financial mess in the northern hemisphere.

Australia is uniquely placed to become the “go to” country for solutions to the problems confronting society. But sadly, we might miss the bus because of our preoccupation with public policy assumptions over which we have no control, as well as an absence of vision and leadership relevant to the compelling issues of the day.


Louis Coutts is the author of the recently published book “The Six Hour MBA”.


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