Posted: 21 Oct. 2021 5 min. read

Australia remade: a country fit for the age of disruption

In a world where new rules are being created at an ever faster pace, the time is now for Australia to modernise its economy and pursue a more economically sophisticated path to define a resilient and globally competitive post-pandemic future.

A new Deloitte report – Australia remade: a country fit for the age of disruption, the latest in the firm’s Building the Lucky Country series – presents a new way to make sense of change and disruption, and allow policy makers and business leaders to take the necessary steps to pursue growth and shape the future of Australia by becoming more economically sophisticated and sustainable.

The report is based on:

  • The Deloitte Economic Sophistication Index – a new economic lens through which to view the Australian economy compared to others around the world (Australia sits at a less than satisfactory 37th)
  • Future scenarios – how would Australia fare if China turned off or turned down the export tap, or if global momentum for meaningful action on climate change caught Australia off-guard, or if Australia took deliberate action to improve its economic sophistication?
  • Critical ecosystems – areas of opportunity that can spur Australia’s next wave of economic growth
  • A resilience framework – a strategy tool for policy makers and businesses that considers four levers – preparedness, innovation, capabilities and connections – to equip them to become more resilient and adaptable.
Shifting from complicated to sophisticated

The analysis looks to address Australia’s particular complexity challenges:

  1. We’re not as successful an economy as we think we are. While GDP is high, Australia’s economy is not very complex – in fact, it’s quite fragile
  2. We’ve relied on luck and it’s created complacency. Due to the stellar economic run over the past 30 years, too little thought has been given to greater economic diversification, and many opportunities have been missed as a result
  3. We’ve neglected sectors with the greatest future potential. Rather than taking a long-term view, Australia has focused on sectors like mineral resources and agriculture that provided historical wealth
  4. We’re not well connected to the rest of the world. This makes it more challenging to improve economic complexity, especially with the rise of Asia on Australia’s doorstep
  5. We’re at risk of the ‘tyranny of distance’ – again. With the world looking locally for supply chains, Australia is at risk because it isn’t engaging enough in the Asia Pacific region.

Deloitte’s new Deloitte Economic Sophistication Index ranks countries and their economies based on two measures: the value added to the goods and services an economy currently produces; and how well connected the industries that make these products and services are in global supply chains.

Countries that rank high on the Sophistication Index – and Germany sits on top – are those that perform well across both value added and connectedness. Ranked 37th on the other hand, Australia‘s prosperity has come at the cost of investing in and enhancing the productive and adaptable capabilities in its economy.

Critical ecosystems…and unlocking opportunity

A more complex, more sophisticated, economy can deliver genuine opportunity. Our analysis points to seven key ecosystems which will matter for Australia in the years ahead: feeding the world, decarbonising the planet, shaping the future of health, space and related technologies, manufacturing the future, tourism and experiences, and servicing the world’s businesses.

More about the authors

David Rumbens

David Rumbens

Partner, Deloitte Access Economics

David is a macro economist with extensive experience in applied economic and quantitative analysis of the Australian economy, along with considerable experience in labor market analysis.  David is a regular commentator on macroeconomic trends, and prepares a weekly economic briefing newsletter.

Mairead Davis

Mairead Davis

Senior Analyst, Deloitte Access Economics

Mairead joined Deloitte Access Economics in July 2018 after completing a Bachelor of Economics and a Bachelor of Commerce from the University of Queensland. Mairead’s recent work has focused on economic analysis of public policy, particularly in the areas of climate change and innovation.