Australian economy must adapt to megatrends: CSIRO

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November 17 2020
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To remain competitive in a post-COVID-19 world, Australia will need to make a leap in five key categories, according to a report commissioned by the CSIRO.

Australian economy must adapt to megatrends

In its Global Trade and Investment Megatrends paper co-authored by CSIRO’s Data61 and Austrade, the researchers found five megatrends that are going to reshape global trade and investment over the coming years.

According to Austrade acting deputy CEO, global client services, Sally-Ann Watts, the world has changed during the COVID-19 pandemic, with the Australian economy needing to adjust to succeed in the world.

“A global pandemic has fundamentally changed our world, hastening the global shift to digital services delivery, disrupting supply chains and posing serious challenges for Australia’s tourism and education sectors,” Ms Watts said.

CSIRO estimates that a decade’s worth of digital transformation occurred within the space of a few months and that the digital technology sector is expanding worldwide.

This presents an opportunity to further develop Australia’s data-science capability applied to trade strategies and investment attraction.

Director of CSIRO’s Data61, Jon Whittle, said the momentum of rapid digital transformation through the pandemic must be maintained.

“Data science and technology will be crucial to drive our economic recovery and build our future resilience,” Mr Whittle said.

“Digital technologies, such as artificial intelligence, robotics and data science can help us create new sources of wealth generation for the nation, and shift the dial for Australia on an international level.”

According to the report, the pandemic resulted in global trade and investment contracting sharply, with foreign direct investment forecast to shrink by 40 per cent, against a backdrop of -4.4 per cent economic growth for the current year.

There are signs of recovery; however, the report identifies that the new trade and investment landscape that emerges will have long-term structural shifts.

These shifts provide Australia with the opportunity to grow digitally enabled exports and to use digital technologies to grow all other export categories, according to the report.

“Overall, this megatrend paints a picture of rapid, widespread and deep digital transformation fuelled by the necessity of remote working, learning, shopping, healthcare, communication, entertainment and other activities,” the report said.

“There will also be opportunities for Australian companies to acquire domestic and globally produced digital technologies to improve the efficiency of their operations.”

The report also notes that while Australia, like other nations, was dealing with significant disruption to key industries such as tourism and education, it was also likely to benefit from the “safe-haven effect”.

“While the global trade and investment marketplace will become more competitive, Australia has significant sources of comparative advantage. There’s likely to be a flight from risky to safe assets and supply chains [and] … we have maintained reliable supply chains and a stable economy throughout the crisis.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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