WEBVTT 1 00:00:00.000 --> 00:00:01.400 Good afternoon, ladies and gentlemen. 2 00:00:02.140 --> 00:00:03.760 Hello, I'm Sarah Thomas. 3 00:00:03.880 --> 00:00:06.020 I'm from the Department of the Premier and Cabinet. 4 00:00:06.460 --> 00:00:11.540 Welcome to the 2016 Adelaide Festival Ideas 5 00:00:11.540 --> 00:00:15.720 and today's session, Roads to Ruin, Pathways to Prosperity. 6 00:00:16.240 --> 00:00:19.420 I acknowledge that today we're gathered on the traditional country 7 00:00:19.420 --> 00:00:21.760 of the Kaurna people of the Adelaide Plains. 8 00:00:22.160 --> 00:00:24.840 We recognise and respect their cultural heritage, 9 00:00:25.000 --> 00:00:26.780 beliefs and relationship with the land. 10 00:00:26.780 --> 00:00:29.820 We acknowledge that these are of continuing importance 11 00:00:29.820 --> 00:00:31.440 to the Kaurna people living today 12 00:00:31.440 --> 00:00:34.340 and that we respect their elders, past and present. 13 00:00:34.680 --> 00:00:37.620 Now, it gives me great pleasure to introduce our speaker for today, 14 00:00:37.840 --> 00:00:39.020 Professor John Spear. 15 00:00:39.400 --> 00:00:43.380 John is the Director of the Australian Industrial Transformation Institute 16 00:00:43.380 --> 00:00:45.040 at Flinders University. 17 00:00:46.260 --> 00:00:49.660 John has a background in economic, industry and workplace research 18 00:00:49.660 --> 00:00:54.060 and formerly led the Australian Workplace Innovation and Social Research Centre. 19 00:00:54.420 --> 00:00:56.760 John is now establishing the SA9, 20 00:00:56.780 --> 00:00:59.220 node of the Innovative Manufacturing CRC, 21 00:00:59.400 --> 00:01:00.720 linked to the Stretton Centre, 22 00:01:00.980 --> 00:01:03.380 a focal point for building future industries. 23 00:01:03.960 --> 00:01:05.620 Please welcome John Spear. 24 00:01:06.480 --> 00:01:07.000 APPLAUSE 25 00:01:11.860 --> 00:01:13.320 Thanks very much, Sarah. 26 00:01:13.420 --> 00:01:16.420 It's a great pleasure to be here with you this afternoon, 27 00:01:16.540 --> 00:01:17.480 on this beautiful afternoon, 28 00:01:17.680 --> 00:01:19.640 so I really appreciate you coming along 29 00:01:19.640 --> 00:01:21.960 and taking interest in my talk today. 30 00:01:22.660 --> 00:01:25.900 So for the next half an hour, I'll share some reflections, 31 00:01:26.040 --> 00:01:26.760 reflections based... 32 00:01:26.780 --> 00:01:30.140 based on, I suppose, my role as a researcher 33 00:01:30.140 --> 00:01:33.220 and as an interested public intellectual, I suppose, 34 00:01:33.360 --> 00:01:36.000 here in South Australia over the last 30 years. 35 00:01:36.680 --> 00:01:39.820 Can I begin saying thank you to Philip Adams, of course, 36 00:01:39.820 --> 00:01:43.580 who this wonderful Festival of Ideas is dedicated to. 37 00:01:43.800 --> 00:01:46.680 Thank you, Philip, for your wonderful Little Wireless program, 38 00:01:47.140 --> 00:01:48.760 the columns, the iconic films 39 00:01:48.760 --> 00:01:52.140 and for being such a wise and good-humoured bloke, 40 00:01:52.220 --> 00:01:53.660 wherever you are, Philip, tonight. 41 00:01:54.480 --> 00:01:56.020 Can I also take this opportunity 42 00:01:56.020 --> 00:01:56.760 to honour the late Philip Adams, 43 00:01:56.760 --> 00:01:58.600 and to honour another towering figure 44 00:01:58.600 --> 00:02:00.480 in Australian intellectual life, 45 00:02:00.680 --> 00:02:03.140 the great historian and social scientist, 46 00:02:03.340 --> 00:02:04.460 the late Hugh Stretton. 47 00:02:04.960 --> 00:02:06.960 Finally, thanks to the Festival of Ideas 48 00:02:06.960 --> 00:02:08.840 for inviting me to speak today. 49 00:02:09.900 --> 00:02:13.120 As you age, like I am, you become aware of patterns. 50 00:02:13.460 --> 00:02:15.160 History seems to repeat itself 51 00:02:15.160 --> 00:02:19.360 and memories of the causes of past failures fade with time. 52 00:02:20.380 --> 00:02:24.040 Stubbornly held dogmatic views, self-interest and greed 53 00:02:24.040 --> 00:02:26.740 can take us down some roads to ruin. 54 00:02:26.760 --> 00:02:28.940 Well-travelled roads to ruin 55 00:02:28.940 --> 00:02:31.420 have brought us three major global economic crises 56 00:02:31.420 --> 00:02:32.960 in the last three decades. 57 00:02:33.300 --> 00:02:36.920 Each crisis is a reminder of how ineffectual efforts 58 00:02:36.920 --> 00:02:39.320 to curb the rapaciousness of the global banking 59 00:02:39.320 --> 00:02:41.280 and financial sector have been. 60 00:02:41.680 --> 00:02:45.200 The economic carnage and hardship generated by the GFC 61 00:02:45.200 --> 00:02:47.820 in the United States and Europe 62 00:02:47.820 --> 00:02:50.780 has left deep scars, painful scars. 63 00:02:51.660 --> 00:02:52.760 Chronic unemployment and underemployment 64 00:02:53.280 --> 00:02:55.660 persists in many communities. 65 00:02:56.760 --> 00:02:59.280 The GFC was made worse in many parts of the world 66 00:02:59.280 --> 00:03:02.220 by the imposition of austerity policies, 67 00:03:02.380 --> 00:03:04.680 inflicting suffering upon suffering. 68 00:03:04.820 --> 00:03:08.860 Harsh austerity programs have starved individuals and communities 69 00:03:08.860 --> 00:03:11.200 of the public investment they need 70 00:03:11.200 --> 00:03:13.620 to recover from financial crises. 71 00:03:14.200 --> 00:03:16.660 We were much more fortunate here in Australia. 72 00:03:17.580 --> 00:03:21.820 It was no accident that Australia avoided being plunged 73 00:03:21.820 --> 00:03:23.920 into recession by the GFC. 74 00:03:24.920 --> 00:03:26.320 Early and substantial intervention 75 00:03:26.320 --> 00:03:26.740 by the GFC in the United States and Europe 76 00:03:26.760 --> 00:03:28.480 by the Rudd government played a critical role 77 00:03:28.480 --> 00:03:32.440 in helping to sustain confidence in the banking and financial sector 78 00:03:32.440 --> 00:03:36.140 and bolster consumer and industry confidence. 79 00:03:36.660 --> 00:03:39.440 The stimulus package did what it needed to do, 80 00:03:39.540 --> 00:03:43.720 that is, fill the investment gap that was created by the GFC. 81 00:03:43.800 --> 00:03:47.300 Without it, we would have seen unemployment rise 82 00:03:47.300 --> 00:03:51.580 well above 8% nationally and close to 10% here in South Australia. 83 00:03:51.960 --> 00:03:54.880 We know from this and from our long history 84 00:03:54.880 --> 00:03:56.660 of dealing with global economic crises 85 00:03:56.660 --> 00:03:59.200 that Australia must be willing to intervene 86 00:03:59.200 --> 00:04:02.120 with substantial stimulus rather than austerity measures 87 00:04:02.120 --> 00:04:05.320 if we are to avoid fanning the fires of recession. 88 00:04:06.320 --> 00:04:08.340 While the Rudd government implemented 89 00:04:08.340 --> 00:04:10.500 one of the most successful stimulus packages 90 00:04:10.500 --> 00:04:13.500 in recent history, leadership divisions within Labor 91 00:04:13.500 --> 00:04:15.960 inflicted mortal political wounds, as we all know. 92 00:04:16.860 --> 00:04:19.440 This was enough to ensure victory for Tony Abbott 93 00:04:19.440 --> 00:04:20.680 and the Coalition in 2013. 94 00:04:22.140 --> 00:04:25.120 The 2014 budget that followed was a truly austere one, 95 00:04:25.140 --> 00:04:26.460 as many of you know. 96 00:04:26.660 --> 00:04:29.320 It was much like those imposed on communities in Europe 97 00:04:29.320 --> 00:04:30.300 in the wake of the GFC. 98 00:04:30.800 --> 00:04:32.400 For those with long memories, 99 00:04:32.480 --> 00:04:35.560 the policy prescriptions laid out by the Coalition in 2014 100 00:04:35.560 --> 00:04:36.760 were very familiar ones. 101 00:04:37.180 --> 00:04:39.380 They hark back to the 1980s, 102 00:04:39.380 --> 00:04:41.320 to John Hewson's fightback package 103 00:04:41.320 --> 00:04:44.440 and the detailed neoliberal economic restructuring programs 104 00:04:44.440 --> 00:04:46.100 that were outlined in that. 105 00:04:46.800 --> 00:04:49.300 Inspired by Thatcherism, these were radical attempts 106 00:04:49.300 --> 00:04:53.180 to dismantle Australia's social democratic legacy. 107 00:04:54.600 --> 00:04:55.920 Reflecting back on that time, 108 00:04:56.000 --> 00:04:56.640 even the social democratic legacy of the GFC 109 00:04:56.640 --> 00:04:59.160 and the staunchest advocates of systematic privatisation 110 00:04:59.160 --> 00:05:02.760 and outsourcing are now struggling to point to the benefits of it. 111 00:05:03.580 --> 00:05:06.060 Privatisation of South Australia's electricity industry 112 00:05:06.060 --> 00:05:10.600 was heralded as a driver of greater efficiency and lower cost. 113 00:05:10.960 --> 00:05:13.460 It, along with the national electricity market 114 00:05:13.460 --> 00:05:14.620 within which it operates, 115 00:05:14.920 --> 00:05:17.880 has been a monumental policy failure. 116 00:05:17.980 --> 00:05:19.680 A road to ruin, if you like. 117 00:05:19.940 --> 00:05:22.900 Nevertheless, the privatisation juggernaut rolls on, 118 00:05:22.980 --> 00:05:24.940 propelled by yet another dogmatic report 119 00:05:24.940 --> 00:05:26.060 by the Productivity Commission. 120 00:05:26.640 --> 00:05:30.600 The target this time around is services rather than assets. 121 00:05:30.800 --> 00:05:34.400 Public hospitals, social housing, specialist palliative care 122 00:05:34.400 --> 00:05:37.600 and human services in remote Indigenous communities. 123 00:05:38.040 --> 00:05:41.720 This general approach is well advanced in Britain 124 00:05:41.720 --> 00:05:43.840 and is being implemented already 125 00:05:43.840 --> 00:05:46.980 in very subtle and seductive ways here in Australia. 126 00:05:48.180 --> 00:05:51.060 New financing mechanisms are bypassing 127 00:05:51.060 --> 00:05:54.860 and replacing established public sector providers and NGOs 128 00:05:55.520 --> 00:05:56.620 by directing public sector providers to the GFC. 129 00:05:56.640 --> 00:05:57.540 Funders to consumers. 130 00:05:58.760 --> 00:06:01.680 As alluring as the rhetoric of consumer empowerment 131 00:06:01.680 --> 00:06:03.380 surrounding this might seem, 132 00:06:03.560 --> 00:06:05.480 it amounts to a voucher system 133 00:06:05.480 --> 00:06:08.100 and voucher systems amount to privatisation. 134 00:06:08.540 --> 00:06:11.760 They lead to a deterioration in service quality and choice 135 00:06:11.760 --> 00:06:15.200 and they depress wages and conditions in the sectors affected. 136 00:06:15.580 --> 00:06:18.260 This is a road to ruin. 137 00:06:19.400 --> 00:06:21.660 There are roads to ruin and some roads 138 00:06:21.660 --> 00:06:23.980 that are just too risky to contemplate going down. 139 00:06:24.680 --> 00:06:25.400 And I have to say, 140 00:06:25.400 --> 00:06:27.860 at this particular point in time here in Adelaide, 141 00:06:27.900 --> 00:06:29.720 one of these is nuclear waste storage. 142 00:06:29.980 --> 00:06:33.180 A long-held view is that nations should take responsibility 143 00:06:33.180 --> 00:06:35.980 for their own radioactive waste. 144 00:06:36.280 --> 00:06:39.000 This moral position imposes important disciplines 145 00:06:39.000 --> 00:06:42.600 on how radioactive material is managed and stored. 146 00:06:43.460 --> 00:06:45.580 The prospect of great riches and jobs 147 00:06:45.580 --> 00:06:48.200 flowing from becoming a storehouse for radioactive material 148 00:06:48.200 --> 00:06:50.160 is incredibly seductive 149 00:06:50.160 --> 00:06:51.720 at a time when job losses 150 00:06:51.720 --> 00:06:54.860 in the automotive, mining and steel industries loom large. 151 00:06:55.500 --> 00:06:58.900 But we must guard against seeing the Royal Commission's findings 152 00:06:58.900 --> 00:07:02.780 as the foundation for some kind of nuclear Eldorado. 153 00:07:03.320 --> 00:07:06.020 The economic assumptions made by the Royal Commission 154 00:07:06.020 --> 00:07:08.780 trade off risk for economic benefit 155 00:07:08.780 --> 00:07:11.720 in an unacceptable way. 156 00:07:12.060 --> 00:07:13.960 For example, the proposal involves 157 00:07:13.960 --> 00:07:16.040 above-ground storage of waste 158 00:07:16.040 --> 00:07:17.760 as a means of generating a revenue stream 159 00:07:17.760 --> 00:07:21.860 to fund the costs of the proposed underground facility, 160 00:07:22.040 --> 00:07:23.840 not just for five years, not just for ten years, 161 00:07:23.920 --> 00:07:24.960 but for decades. 162 00:07:26.380 --> 00:07:29.820 This exposes communities to unacceptable risk. 163 00:07:31.320 --> 00:07:34.200 Desperate times must not give way to desperate measures. 164 00:07:34.660 --> 00:07:36.940 We will feel prouder as a community 165 00:07:36.940 --> 00:07:39.060 if we invest in the development of other ventures 166 00:07:39.060 --> 00:07:41.200 like solar thermal energy generation facilities, 167 00:07:41.580 --> 00:07:45.500 hybrid generation and advanced battery storage technologies. 168 00:07:45.780 --> 00:07:47.200 In other words, there are alternatives, 169 00:07:47.380 --> 00:07:50.680 other ways of working through this difficult time we face. 170 00:07:51.820 --> 00:07:54.080 While there's an urgent need to accelerate the growth 171 00:07:54.080 --> 00:07:55.300 of knowledge-intensive industries, 172 00:07:55.400 --> 00:08:01.140 we must put in place sufficient short-term measures 173 00:08:01.140 --> 00:08:03.740 to generate jobs for those who desperately need them, 174 00:08:03.860 --> 00:08:06.400 now and over the years to come. 175 00:08:06.580 --> 00:08:10.020 Fortunately, there is an appreciation of the need for this 176 00:08:10.020 --> 00:08:11.020 within the state government. 177 00:08:11.640 --> 00:08:13.500 But we have a crisis on our hands. 178 00:08:13.620 --> 00:08:15.860 Full-time employment for males in South Australia 179 00:08:15.860 --> 00:08:17.100 is already in recession. 180 00:08:17.320 --> 00:08:19.860 The main drivers of this have been the impact 181 00:08:19.860 --> 00:08:22.000 of the high exchange rate on the competitiveness 182 00:08:22.000 --> 00:08:23.920 of the manufacturing sector, 183 00:08:23.920 --> 00:08:28.120 which of course is a function of the two-speed economy, 184 00:08:28.360 --> 00:08:29.680 a function of the mining boom. 185 00:08:30.100 --> 00:08:34.080 This, along with the cavalier attitude of the Abbott federal government, 186 00:08:34.220 --> 00:08:37.320 led to the closure of our automotive industry, 187 00:08:37.700 --> 00:08:39.900 an industrial calamity, in my view, 188 00:08:39.940 --> 00:08:40.820 that could have been prevented 189 00:08:40.820 --> 00:08:43.340 by a much more judicious national response. 190 00:08:44.020 --> 00:08:46.080 While we can't prevent the auto closure, 191 00:08:46.280 --> 00:08:49.420 we can prevent it plunging thousands of South Australians 192 00:08:50.200 --> 00:08:53.740 into unemployment, underemployment and hardship. 193 00:08:54.500 --> 00:08:56.500 The impact of the closure on South Australia 194 00:08:56.500 --> 00:08:58.440 continues to be underestimated. 195 00:08:58.680 --> 00:09:01.400 While some excellent strategies have been put in place 196 00:09:01.400 --> 00:09:02.860 to support workers and companies, 197 00:09:03.800 --> 00:09:06.720 we don't have a strategy to fill the 2-3 billion, 198 00:09:06.920 --> 00:09:09.900 that is the 2-3 billion per annum investment hole 199 00:09:09.900 --> 00:09:11.640 created by the closure. 200 00:09:12.060 --> 00:09:14.880 While some progress has been made towards this, 201 00:09:14.940 --> 00:09:18.240 it's not enough to prevent unemployment rising sharply, 202 00:09:18.440 --> 00:09:20.000 particularly male unemployment. 203 00:09:20.480 --> 00:09:21.200 Here's why. 204 00:09:21.920 --> 00:09:23.520 While total employment, 205 00:09:23.520 --> 00:09:24.920 in South Australia, is growing, 206 00:09:25.100 --> 00:09:26.700 it masks a number of problems. 207 00:09:27.080 --> 00:09:29.620 Much of the growth, as I think probably most of you know, 208 00:09:29.720 --> 00:09:31.760 is in part-time and casual employment, 209 00:09:31.860 --> 00:09:34.680 and around about a third of those working under these circumstances 210 00:09:34.680 --> 00:09:36.840 would prefer to work more hours. 211 00:09:37.180 --> 00:09:39.040 Higher levels of labour unutilisation 212 00:09:39.040 --> 00:09:41.660 is a problem that both women and men face. 213 00:09:42.120 --> 00:09:44.960 With the closure of the automotive manufacturing industry next year, 214 00:09:45.040 --> 00:09:47.360 this is set to get much worse for men in particular. 215 00:09:48.140 --> 00:09:51.580 Male full-time employment has collapsed in South Australia, 216 00:09:51.620 --> 00:09:52.860 largely as a consequence, 217 00:09:53.520 --> 00:09:56.520 of manufacturing, mining and construction job losses. 218 00:09:56.620 --> 00:09:58.140 It's set to get much worse soon 219 00:09:58.140 --> 00:10:01.380 if we don't boost investment in job-rich projects. 220 00:10:02.060 --> 00:10:04.120 South Australia is likely to go into 2017 221 00:10:04.120 --> 00:10:07.260 with a male unemployment rate of around about 7%. 222 00:10:08.700 --> 00:10:12.080 And full-time employment for males in reverse. 223 00:10:12.200 --> 00:10:15.220 This is a diabolical combination, if you think about it. 224 00:10:15.400 --> 00:10:20.040 After peaking at around about 365,000 full-time jobs in 28, 225 00:10:20.320 --> 00:10:23.500 total male full-time employment is now around about 340,000. 226 00:10:24.900 --> 00:10:27.400 In the middle of the 1990s recession, 227 00:10:27.540 --> 00:10:30.360 it got down to 313,000. 228 00:10:30.380 --> 00:10:32.000 I don't expect it's going to get that bad, 229 00:10:32.180 --> 00:10:35.840 but in the absence of significant compensating investment, 230 00:10:36.060 --> 00:10:37.100 it will get close. 231 00:10:37.580 --> 00:10:39.580 So with full-time employment in reverse 232 00:10:39.580 --> 00:10:41.380 and sustained losses in manufacturing, 233 00:10:41.700 --> 00:10:44.780 job prospects for men with a background in the automotive industry 234 00:10:44.780 --> 00:10:45.820 are deteriorating. 235 00:10:46.440 --> 00:10:48.520 Most of the alternative jobs that are available 236 00:10:48.520 --> 00:10:51.860 are part-time and concentrated in sectors like health and aged care. 237 00:10:52.100 --> 00:10:53.480 This is not an easy job. 238 00:10:53.480 --> 00:10:54.260 There are significant transitions to make 239 00:10:54.260 --> 00:10:57.420 if your life has been spent working in manufacturing or construction. 240 00:10:57.920 --> 00:11:00.720 While significant transitions are being made, 241 00:11:01.560 --> 00:11:04.320 and some people are successfully making that big transition 242 00:11:04.320 --> 00:11:05.760 from one sector to another, 243 00:11:05.920 --> 00:11:10.140 it often requires significant retraining and intensive support. 244 00:11:10.760 --> 00:11:15.180 We need another solution to operate alongside this 245 00:11:15.180 --> 00:11:18.440 to help ensure that the largest possible number of people displaced 246 00:11:18.440 --> 00:11:22.920 from the auto-closure are re-employed as soon as possible 247 00:11:22.920 --> 00:11:23.460 in different sectors. 248 00:11:23.480 --> 00:11:25.200 We need jobs that are well-paid. 249 00:11:26.100 --> 00:11:28.360 There is no shortage of work to be done 250 00:11:28.360 --> 00:11:32.480 in modernising our transport, housing and civic infrastructure. 251 00:11:33.700 --> 00:11:35.360 We are at the end of a recent boom 252 00:11:35.360 --> 00:11:38.900 in engineering and construction projects in South Australia, however. 253 00:11:39.160 --> 00:11:42.100 Major projects like the new RAH are nearly completed 254 00:11:42.100 --> 00:11:45.260 and we don't have sufficiently privately funded projects 255 00:11:45.260 --> 00:11:48.840 coming on stream to maintain recent engineering 256 00:11:48.840 --> 00:11:51.040 and construction industry momentum. 257 00:11:51.380 --> 00:11:53.280 What we don't want is, 258 00:11:53.280 --> 00:11:55.640 for this sector to start contracting at the same time 259 00:11:55.640 --> 00:11:58.060 as the automotive closure occurs. 260 00:11:58.680 --> 00:12:01.020 One bit of good news on the infrastructure front 261 00:12:01.020 --> 00:12:03.140 was the agreement between the Federal and State Government 262 00:12:03.140 --> 00:12:04.980 to fund the Northern Connected Road project, 263 00:12:05.580 --> 00:12:08.300 emblematic, I believe, of a significant thawing 264 00:12:08.300 --> 00:12:10.620 in relations between the two levels of government 265 00:12:10.620 --> 00:12:13.360 since the ascension of Malcolm Turnbull. 266 00:12:13.620 --> 00:12:16.760 We'd had really no assistance from the Commonwealth 267 00:12:16.760 --> 00:12:19.940 to that point for infrastructure projects here in South Australia. 268 00:12:20.640 --> 00:12:22.880 More projects like this need to be funded, 269 00:12:22.880 --> 00:12:26.700 and could be funded relatively cheaply through borrowings, 270 00:12:27.420 --> 00:12:29.680 given how low interest rates are at the moment. 271 00:12:29.820 --> 00:12:32.840 Interest rates are at incredibly low levels, 272 00:12:32.860 --> 00:12:36.040 so public debt-funded infrastructure investment 273 00:12:36.040 --> 00:12:37.400 makes a lot of sense. 274 00:12:37.800 --> 00:12:40.200 You couldn't get a better time to borrow than now. 275 00:12:41.400 --> 00:12:44.400 There are other reasons to aggressively stimulate 276 00:12:44.400 --> 00:12:46.180 the South Australian economy at the moment. 277 00:12:46.660 --> 00:12:49.460 As Tim's told us, automation is expected to displace 278 00:12:49.460 --> 00:12:52.520 many routine tasks, and artificial intelligence has the potential 279 00:12:52.520 --> 00:12:52.860 to do so. 280 00:12:52.860 --> 00:12:54.780 We've got to do the same for very complex tasks. 281 00:12:55.280 --> 00:12:57.500 I've got to say, a debate now rages about whether 282 00:12:57.500 --> 00:13:00.980 technologically-induced job creation will be outpaced 283 00:13:00.980 --> 00:13:03.380 by job destruction flowing from automation. 284 00:13:04.120 --> 00:13:06.640 We've long been told that technology will generate 285 00:13:06.640 --> 00:13:09.580 more jobs than it displaces, but automation makes this 286 00:13:09.580 --> 00:13:12.300 less certain, not just automation alone, 287 00:13:12.440 --> 00:13:15.460 but because of the combination of automation 288 00:13:15.460 --> 00:13:19.900 and the great advances in artificial intelligence. 289 00:13:21.160 --> 00:13:22.840 New technologies are fundamentally important, 290 00:13:22.840 --> 00:13:24.120 and they are incredibly challenging in the way we design, 291 00:13:24.300 --> 00:13:26.160 produce and consume goods and services, 292 00:13:26.360 --> 00:13:28.440 the way we live and work. 293 00:13:28.740 --> 00:13:31.900 While early adopters will be rewarded as the flagbearers 294 00:13:31.900 --> 00:13:33.160 of the industries of the future, 295 00:13:33.560 --> 00:13:35.860 laggards will be left behind, 296 00:13:36.200 --> 00:13:38.280 leaving job losses in their wake, unfortunately. 297 00:13:38.780 --> 00:13:41.560 Moreover, routine tasks are said to be highly vulnerable 298 00:13:41.560 --> 00:13:43.660 to automation, with some estimates suggesting 299 00:13:43.660 --> 00:13:46.020 that more than 40% of all jobs are vulnerable 300 00:13:46.020 --> 00:13:48.040 to high levels of automation. 301 00:13:48.340 --> 00:13:48.900 But don't despair. 302 00:13:49.200 --> 00:13:49.900 Don't despair. 303 00:13:49.980 --> 00:13:51.940 Just because a task can be automated 304 00:13:51.940 --> 00:13:52.820 doesn't mean that it's not possible to achieve it. 305 00:13:52.820 --> 00:13:54.340 It doesn't necessarily mean it will be. 306 00:13:54.640 --> 00:13:57.800 The costs and desirability of automation loom large 307 00:13:57.800 --> 00:14:00.420 in any decision to automate it. 308 00:14:00.500 --> 00:14:03.440 So I'm not as pessimistic as the research suggests 309 00:14:03.440 --> 00:14:06.120 in relation to the impact of automation. 310 00:14:06.520 --> 00:14:08.020 While fears about disruption in automation 311 00:14:08.020 --> 00:14:10.500 are not without foundation, they tend to be 312 00:14:10.500 --> 00:14:14.800 technologically deterministic, overestimating both 313 00:14:14.800 --> 00:14:17.020 the pace of change and the relative advantage 314 00:14:17.020 --> 00:14:17.840 of automated solutions. 315 00:14:18.400 --> 00:14:20.360 There's little doubt that the current wave 316 00:14:20.360 --> 00:14:22.720 of technological innovations is truly transforming 317 00:14:22.720 --> 00:14:22.960 the way that we think about automation, 318 00:14:22.960 --> 00:14:25.600 particularly when paired with digital technologies. 319 00:14:26.800 --> 00:14:29.280 We must embrace them and accelerate their uptake 320 00:14:29.280 --> 00:14:32.500 as part of a South Australian industry innovation 321 00:14:32.500 --> 00:14:34.040 and diversification strategy. 322 00:14:34.600 --> 00:14:36.780 To date, our investments in developing and applying 323 00:14:36.780 --> 00:14:39.000 these technologies have been too modest. 324 00:14:39.820 --> 00:14:43.240 Nanotechnology, biotechnology, photonics, 3D printing, 325 00:14:43.420 --> 00:14:46.640 artificial intelligence and simulation are among a suite 326 00:14:46.640 --> 00:14:49.960 of revolutionary technologies transforming our industries 327 00:14:49.960 --> 00:14:51.520 and our workplaces. 328 00:14:51.700 --> 00:14:52.560 The new, 329 00:14:52.720 --> 00:14:54.640 industrial revolution that this heralds 330 00:14:54.640 --> 00:14:57.000 is replete with opportunities, unique opportunities 331 00:14:57.000 --> 00:15:00.480 to build a more diversified, knowledge-based economy 332 00:15:00.480 --> 00:15:03.900 capable of generating rewarding, well-paid 333 00:15:03.900 --> 00:15:05.220 and secure jobs. 334 00:15:06.320 --> 00:15:08.960 The reality is that the capacity of many of our 335 00:15:08.960 --> 00:15:10.720 small and medium-sized companies to absorb 336 00:15:10.720 --> 00:15:13.400 and apply the new technologies is constrained 337 00:15:13.400 --> 00:15:15.200 by a whole range of factors. 338 00:15:15.240 --> 00:15:18.280 Lack of awareness, knowledge, leadership and resources. 339 00:15:19.060 --> 00:15:21.440 Efforts have been made to improve the so-called 340 00:15:21.440 --> 00:15:22.440 absorptive capacity. 341 00:15:22.720 --> 00:15:23.760 We are now a global economy of companies through investments 342 00:15:23.760 --> 00:15:26.540 in workplace innovation and leadership but they have a long way 343 00:15:26.540 --> 00:15:28.220 to go here in South Australia and nationally. 344 00:15:28.540 --> 00:15:30.640 We're not Germany, we're not Sweden, we're not Finland. 345 00:15:31.700 --> 00:15:35.680 We're not at the forefront of the technological revolution. 346 00:15:37.460 --> 00:15:40.240 While radical automation might prove to be a compelling 347 00:15:40.240 --> 00:15:43.200 business proposition for some companies, it will prove 348 00:15:43.200 --> 00:15:45.260 to be a bridge too far for many others. 349 00:15:45.620 --> 00:15:49.260 Some will thrive not on automation but humanization. 350 00:15:49.920 --> 00:15:52.560 That is unleashing the capabilities and creativity of the 351 00:15:52.560 --> 00:15:58.260 their employees through co-design processes that involve the active participation of end users. 352 00:15:58.860 --> 00:16:03.640 While we're witnessing the loss of many routine jobs, thousands of new jobs can be created by 353 00:16:03.640 --> 00:16:10.480 early and deep engagement in what's increasingly become to be known as the fourth industrial 354 00:16:10.480 --> 00:16:15.900 revolution. To realise the benefits of technological disruption, shape it and harness it, 355 00:16:16.000 --> 00:16:22.340 we need to abandon the largely reactive posture to disruption that we've taken here in Australia. 356 00:16:22.560 --> 00:16:26.760 A much deeper understanding of disruptive technologies and their potential applications 357 00:16:26.760 --> 00:16:31.920 in the Australian context is needed. We're not Britain or the United States where much 358 00:16:31.920 --> 00:16:35.940 of the initial research on disruption and automation has been done. 359 00:16:36.940 --> 00:16:42.760 Meanwhile, we have to deal with some more pressing challenges. It's a great national shame that our 360 00:16:43.300 --> 00:16:47.900 automotive manufacturing is on a road to ruin. Other nations have fought hard to retain their 361 00:16:47.900 --> 00:16:52.200 automotive industries in the face of great competitive pressures. Both the US and British 362 00:16:52.200 --> 00:16:52.540 governments have fought hard to retain their automotive industries in the face of great 363 00:16:52.560 --> 00:16:54.800 competitive pressures. Both the US and British governments took a patient approach, enabling their 364 00:16:54.800 --> 00:16:59.360 automotive industries to work through the crises they faced during the GFC. Here in Australia, 365 00:16:59.500 --> 00:17:03.320 the tone of the coalition at the time appeared to be hostile to the industry, 366 00:17:04.000 --> 00:17:10.560 sending all the wrong signals to it. The automotive industry is not our only concern. Imagine the 367 00:17:10.560 --> 00:17:16.240 calamity if the steel industry collapses in Wyala. The nation would lose one of its few remaining 368 00:17:16.240 --> 00:17:22.260 specialist steel makers and the security that comes with being able to manufacture structural steel for 369 00:17:22.260 --> 00:17:27.940 our buildings and infrastructure. Buildings like this one here. Around 22,000 people live in the 370 00:17:27.940 --> 00:17:34.700 steel town of Wyala. One quarter of its 11,000 strong workforce are employed by Arium's steel 371 00:17:34.700 --> 00:17:41.020 manufacturing and mining operations. The livelihood of thousands more depend on their existence. 372 00:17:41.300 --> 00:17:46.020 If closure of the steelworks and mothballing of the mining operations occurred in that city, 373 00:17:46.120 --> 00:17:51.920 it would face the prospect of both an exodus and a vicious cycle of decline. The stakes are 374 00:17:51.920 --> 00:17:56.620 extraordinarily high. With the exception of a major expansion of mining at Olympic Dam, 375 00:17:56.760 --> 00:18:02.680 there are few prospects on the horizon capable of filling the investment and jobs hole created by 376 00:18:02.680 --> 00:18:08.080 the collapse of the steel industry. Recalling the federal government's response to the threatened 377 00:18:08.080 --> 00:18:12.180 closure of the auto manufacturing industry in Australia, it's been hard to entertain the 378 00:18:12.180 --> 00:18:16.840 prospect that the government would actually provide substantial or any assistance to the 379 00:18:16.840 --> 00:18:21.680 ailing steel industry. With the stakes so high, the federal government eventually abandoned its 380 00:18:21.680 --> 00:18:21.900 hand in the fight against the steel industry. The steel industry is a state of the art. It's a state of the art. 381 00:18:26.520 --> 00:18:28.740 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 382 00:18:29.140 --> 00:18:32.220 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 383 00:18:32.220 --> 00:18:36.000 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 384 00:18:36.000 --> 00:18:39.680 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 385 00:18:39.720 --> 00:18:42.060 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 386 00:18:42.120 --> 00:18:50.180 It's a state of the art. It's a state of the art. It's a state of the art. It's a state of the art. 387 00:18:50.180 --> 00:18:54.880 reclaim what governments do well in our collective interest and reject the idea that we must 388 00:18:54.880 --> 00:19:00.900 systematically abandon the role for government in the provision of goods and services and in 389 00:19:00.900 --> 00:19:05.820 economic development leadership. History tells us that the retreat from intelligent public 390 00:19:05.820 --> 00:19:11.140 intervention is a road to ruin. In his Whitlam letter, the great Don Dunstan said, we intervene 391 00:19:11.140 --> 00:19:16.920 or we sink. What did he mean by that? He knew, like many others of his generation, that powerful 392 00:19:16.920 --> 00:19:22.760 forces operate in capitalism to generate great concentrations of wealth and power. Periodically, 393 00:19:22.760 --> 00:19:27.980 these processes of accumulation are punctuated by deep economic crises when the model implodes, 394 00:19:28.000 --> 00:19:33.620 creating great hardship and mass unemployment, just like we saw in the global financial crisis. 395 00:19:34.680 --> 00:19:40.480 Social democratic movements in the 20th century responded to this, challenging the legitimacy of 396 00:19:40.480 --> 00:19:46.640 laissez-faire capitalism and offering an alternative worldview that acknowledges that in the real world, 397 00:19:46.920 --> 00:19:53.560 we live in a mixed economy, where the public and private sectors interact in complex ways. Both 398 00:19:53.560 --> 00:19:58.860 sectors contribute to the wealth and well-being of nations, companies, communities, individuals, 399 00:19:59.040 --> 00:20:05.980 and households. Essential to the function of a fair society is a democratic interventionist 400 00:20:05.980 --> 00:20:10.700 government. Through the institutions of government, we seek to rise above self-interest and 401 00:20:10.700 --> 00:20:16.660