The Australian economy has entered unchartered territory and needs a bigger, more engaged workforce in order to grow, according to Westpac’s Australian Financial Services chief executive Brian Hartzer.
Addressing the Trans-Tasman Business Circle in Sydney today, Hartzer explained how the rise of China and India, evolution of the mining sector, aftermath of the GFC, ageing population and new technology were converging to “materially impact on Australian growth”.
Hartzer – who was educated in the US and is widely tipped eventually to succeed Gail Kelly as Westpac Group CEO – had three recommendations for improving productivity: a bigger workforce; more fulfilling jobs; and better access to work opportunities.
On the first point, he noted that Australians viewed the job market differently from people in the US, Asia and Europe, translating top “a rather equivocal view of immigration”.
Here’s what he said:
[There is in Australia] the belief that economic opportunity is limited – like a cake where the more you slice it, the smaller each piece must be.
This translates to a very rigid view of how a “job” must be defined, how it is scoped and how it’s paid. It also leads to a rather equivocal view of immigration.
The truth, of course, is that more people working and contributing to the economy actually means more opportunity (and more cake!) for everyone.
So it should be the objective of business, policy makers, organised labour, and the media to remove barriers to work.
Hartzer called for more flexible workplaces and better access to child care and disability support to help people re-enter or remain in the workforce.
He added that Australia needed “a more enlightened national view of immigration”, especially as the economy transitioned from relying heavily on the resources sector to more knowledge-based sectors.
I recognise this is a politically charged topic. But if we are to grow, compete successfully, and reach our national potential, we simply must increase the size of our skilled workforce.
According to the Economist magazine, 40% of the US Fortune 500 companies were founded by immigrants or their children, as were 7 out of 10 of the world’s most valuable brands.
And in Silicon Valley, 40% of startups have an immigrant founder (including Google, Ebay, Facebook, Yahoo, and arguably Apple, since Steve Jobs’ father was a Syrian immigrant.
And where would Australia be without entrepreneurs like Frank Lowy, Harry Triguboff and Victor Smorgon, or world-renowned research biologist Sir Gus Nossal, the late heart specialist Dr Victor Chang, and the inventor of spray-on-skin, Dr Fiona Wood?
My point is that skilled immigration and innovation are connected.
And there is increasing evidence that for our economy to grow — and for Australia to develop alternatives to the resources sector — we need innovation industries.
That’s because technology companies, advanced manufacturing, biotech, and so-called traded services — like law, consulting and architecture — employ higher-paid people from whom a larger share of earnings flows back into the community through their consumption of local services such as home renovation, house -keeping and hair-dressing.
In short, you need a source of fresh money to drive the economy, and skilled knowledge workers provide that drive.
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