The Deputy Governor of the Reserve Bank of Australia, Dr Philip Lowe, is bucking the conservative nature of the RBA when voicing his opinion on where Australia needs to develop in order to survive and thrive amidst a rapid uptake of offshoring of jobs.
If we are going to be paying some of the highest wages in the world, and carrying some of the highest living and business costs in the world, then we cannot afford to be doing work here that can be done elsewhere for one tenth of the price.
Australian businesses need to focus on high value, complex, and highly paying tasks, and use global resourcing to make them more price competitive.
Lower skilled white collar roles are shifting to global labour hubs like the Philippines. This is already happening by the tens of thousands and is transforming SMEs and large businesses alike.
Dr Lowe suggests we need to focus on what we can do better than any other country, so that we are worth what we must charge. This is now the undeniable cost of choosing to be a high cost, high wage country.
“…Australia is going to be a high wages, high-productivity, high-value added economy – that’s where we want to be, that’s where we could be, that’s where we should be.
If we’re going to find ourselves in that position and sustain ourselves there, then people need to be able to take risks, they need to be able to be rewarded for risks and we need to innovate to find new ways of doing things better.
So I think it’s somehow enlivening the entrepreneurial and risk-taking culture, innovation culture, so that we can be the type of country that has high value-added, high wages and high productivity. I think culture’s important.
In my perspective, I think our society is becoming too risk adverse, the way we think about risk has got distorted and we’re not paying enough attention to returns and we’re paying too much attention to risk.
I think if we invest more and more effectively in education, in human capital accumulation and infrastructure, so it’s risk taking, education, infrastructure, they’re the things that are going to help us be a high wage, high productivity, high value added economy.”
Many Australian companies have already successfully gone down the path of outsourcing and offshoring, finding well-trained and talented staff in developing economies. Australian companies are well placed to take advantage of this trend, and as Dr Lowe points out, it sometimes involves taking a calculated risk to realise a whole new world of potential.
Come let me show you what other Australian businesses are doing with their own offshore team, and how they are upskilling their Australian staff, and lowering the cost of support roles. Spend three days in the Philippines with Easy Offshore.
Scott Linden Jones built several businesses in the IT industry since 2002. He is the founding adviser at Easy Offshore, providing offshore educational and implementation services to Australian businesses. In 2012 he authored a book on globalism called The Third Wave.