Australia can put itself in a position to emerge from the COVID-19 crisis more resilient, with higher productivity growth and with a greater ability to extend opportunities for our businesses and our people.

Much of the responsibility for achieving these outcomes rests with Australia’s private sector. If we can lift business investment, improve the capabilities of our managers and their workforces and increase the readiness of new and existing businesses to innovate, our economy will be well-equipped to grasp domestic and global opportunities and meet future challenges.

Governments and their agencies have critical roles to play in stabilising the marcoeconomy; overseeing strong and appropriately prioritised investment in physical and social infrastructure; ensuring our education and training arrangements are first class; making sure our regulatory regimes are well-considered, well run and efficient; and facilitating strong engagement in the international economy.

While getting these settings right is fundamental, governments can also support businesses’ efforts to improve their operations and become more innovative. In this Industry Development policy paper we put the case for greater, more linked-up and more coherent efforts to lift business capabilities – particularly those of our small and medium-sized enterprises; further facilitation of the accelerated development of high-growth industries and businesses; and encouraging business innovation.

In addition, we emphasise the important roles that governments can play in ameliorating the economic and social costs arising from industry development as existing areas of activity are disrupted in the process of creative destruction.

The COVID-19 experience and the intensification of tensions in the international economy have highlighted vulnerabilities associated with our reliance on global supply chains and has seen an increased interest in building greater resilience to mitigate against these vulnerabilities. Ai Group strongly supports the need to manage these risks and to do so in a way that does not undermine the very strong advantages of our active participation in the global economy.

In some areas – including in areas related to defence and health – a greater degree of economic sovereignty makes sense. But not at any cost. We support ‘smart sovereignty’ over self-reliance and we see the development of strong and competitive domestic industries as fundamental to building greater resilience.

Our policy proposals in the areas of building business capabilities, facilitating the acceleration of high-growth industries and businesses, and encouraging innovation are largely a matter of building on, linking up and giving greater coherence to the wide range of existing initiatives. If these objectives can be pursued with greater inter- and intra-government cooperation, all the better and we encourage all governments and the National Cabinet to get on board in a concerted effort to give greater focus on the development of Australian industries.