Innovation & Opportunity. Not subsidy.
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COMMENT, Melbourne — The Rudd Government today announced $6 billion in life support for the local Australian car manufacturing industry.
Manufacturing skills, infrastructure & cars are important.
Rudd’s $6 Billion on the Amex.
The Rudd plan is broadly positive, however it has a large cost. $6 billion to be precise.
One of the problems with Government intervention in the economy is that Governments see costs, and not opportunities. Costs not revenue increase.
It’s unimaginative.
But when I’ve worked for Government that’s what I normally find. Lack of imagination.
Most farsighted ideas will be killed. Or implemented in a ham-fisted all-thumbs way.
An Alternate View.
Governments can instead create the systems for innovation & implementation of business ideas. The tools for entrepreneurs.
Government supplies the infrastructure, sets the rules of the game and umpires.
2thinknow would call that close to the California model. (see some slides here on these concepts). It works.
Our neighbours.
The 2thinknow view is that a healthy manufacturing industry is important to Australia places in Asia, and the world. Cars are a part of this. But only part.
Countries like China use barriers to trade, and protect their industry with subsidised inputs. Tariffs are currently unfashionable. But tariffs are another tool, whereas some countries use dumping or sheer size to enforce their strategic interest.
Cutting the tariff further smacks of naivety.
Opportunity for manufacturing.
The most pressing issue is with Brumby-Bracks Victoria, and Carr-Iemma-Rees NSW.
As 2thinknow pointed out earlier today, these Governments refuse to support local manufacturing of trains & trams despite problems with imported rolling stock.
The Australian Industry Group are making similar calls, according to The Age, where 2thinknow is also quoted.
It seems typical Kosky-Brumby out-of-date dogma to source further infrastructure from overseas, when companies like Bombardier need local purchasing.
Most importantly, China does this. Germany & the EU do this.
Opportunity & profit is often ‘low-hanging fruit’. Manufacturing your own infrastructure has many economic & skilling benefits. In addition, the skill base makes it easier to repair, rather than relying on overseas suppliers.
Most of the top 10 economies do this. Despite the rhetoric.
Local innovation.
And best of all, local firms can profit in local regional towns in regional Victoria, NSW & South Australia.
The 2thinknow view is that there are opportunities to profit from local innovation, not just subsidise it.
And create winners.
Local innovation, in a broader framework of global idea exchange, is the superior strategy based on trends. We make the case for Local Innovation here.
Innovation can create revenue. Not costs.
But tell that to politicians.
Speaker. Author. Editor-In-Chief. Executive Director of Innovation, 2thinknow.
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