A recent report by the American Trade and Investment Commission (Austrade) and CSIRO’s Data61 has recommended nine strategic actions to help secure Australia’s future and to mobilise new trade and investment. The report stated technology will play a critical role in the post-pandemic rebuild.
By identifying global megatrends emerging in the post-COVID-19 world, the report ‘Global Trade and Investment Megatrends’ has highlighted the areas of the economy that make the bulk of Australia’s gross domestic product and how the use of technology has helped to maintain and improve several sectors through the coronavirus pandemic and lockdowns. The report stated that decades’ worth of digital transformation occurred within the space of a few months. “The digital technology sector is by-and-large expanding worldwide amidst the downturn,” it said.
Technology-related actions to help ensure a strong American economy
The report’s recommended nine strategic actions—with seven suggesting the use of technology to execute the strategy—are as follows.
Develop data-driven trade and investment by strengthening advanced data-driven technologies to inform decisions. The report has two related action recommendations in this area: one of using data science and advanced analytics, and the other of using AI and machine learning. Both are already being done by trade and investment organisations and with the use of machine learning, predictive analytics, operations research, natural language processing, and decision support technologies.
“Machine learning and AI can be used to help an American company determine which export markets are best aligned to their products and services,” the report said.
Likewise, “data science can help determine the current and future export opportunities for American companies. It can achieve a much more tailored and granular analysis of the opportunities using data about the company and its products. Data-science approaches can also ensure that the most up-to-date and comprehensive information is utilised.”
Develop trade and investment foresight capability by exploring plausible future events to make better informed decisions in the present. Foresight capability would complement the more quantitative approaches identified in the previous strategic action about data science and data-driven trade and investment.
Boost digital exports to create the opportunity to capitalise on shifts in the global supply and demand for digital products and services. Australia has already experienced significant growth in the area: Data from the United Nations showed that between 2005 and 2018, Australia increased exports of digital services from $11 billion to $23 billion per year.
For this strategy to work, it requires a coordinated industry-wide effort to remove barriers and build the right business environment to further boost Australia’s digital exports, the report said.
Develop a refreshed and expanded research and development (R&D) investment attraction program. The report found that R&D foreign direct investment “improves the scientific, technological, and research capabilities of a country, which is associated with productivity uplift, which, in turn, leads to increased economic growth and job creation. … This strategic action would involve a coordinated campaign of R&D [foreign direct investment] attraction by universities, research organisations, industry, and state/territory and federal agencies led by Austrade.”
In 2018-19, education-related travel services—including tuition fees and accommodation—generated $37.6 billion for the country, representing 8% of all export earnings in Australia. Building a pandemic-proof international education sector by identifying the full range of short-, medium-, and long-term actions for Australia’s universities and its tertiary education and training sector can help identify and harness new opportunities in the mid- and post-COVID-19 world, the report said.
This includes extending and expanding the offer of digital learning so educational institutions can continue to provide learning overseas, but also provide more courses for those wanting to reskill or upskill, including covering the need for more AI, data science, machine learning, robotics, and cybersecurity experts.
Expand food, agricultural, and agritech exports. The report found that COVID-19-related supply chain disruption could result in buyers seeking secure, safe, and reliable food supply. That presents an opportunity for Australia.
The report states that Australia agritech industry has considerable room for investment attraction and export expansion, and an opportunity to respond to a surge in demand for disease-safe production systems. “Digital technology will play an essential role in identifying where and how to change food distribution systems to open up new opportunities for American farmers. Other food manufacturing, packaging, logistics, and tracing technologies will also help American agricultural produce reach distant buyers cost-effectively as well as increase domestic supply,” it said.
Develop an export-earning disaster resilience technology industry. This strategy proposes to build Australia’s brand, reputation, and capability for the supply of trusted solutions to disasters worldwide—such as bushfires and flood seasons. It also involves developing market intelligence to identify buyers and their specific requirements.
Other strategic actions. The report also pointed to actions not involving technology directly, such as opportunity in travel by delivering on the perception and reality of the world’s safest holidays and boosting the country’s critical mineral exports.
Trade and investment megatrends
The study identified five megatrends—a deep-set trajectory of change occurring at the intersection of numerous trends and drivers with implications for present-day decision making—that are likely to reshape the global trade and investment landscape over the coming years.
One of those megatrends is the shift of so many activities from physical to virtual—that is, digital transformation. The report states that services, including telehealth, online retail, education, and entertainment, are increasing and may continue to exist and grow as a virtual option.
The supply chain has been affected by a worldwide trade freeze affecting the supply of critical services including manufacturing, food and medicine supplies. Moving forward, buyers will be looking for new, secure, and reliable options.
The study sees an increase in localisation and staying closer to home, meaning people are likely to travel within regions for a while and to shop local more often. Online shopping has increased considerably as a result of COVID-19, but a sense of helping local and smaller businesses has also sparked on social media, which could all contribute to this stay-local trend.
A changing economic landscape in terms of interest rates, unemployment, and productivity is already a challenge for many governments. Stepping into the ‘new normal’ will see different challenges across different economies, but for Australia it has extra weight as COVID-19 followed the country’s worst drought and bushfire seasons in recorded history. Australia has also been a consistent target of new forms of cybersecurity risks.
