The Productivity Commission has released its 5 Year Productivity Inquiry. This report highlights key challenges facing Australian businesses and the decrease in productivity in the last 20 years, particularly in the services sector.
The Productivity Commission discusses preceding productivity-related challenges and proposes avenues for future productivity success via:
- Data, digital technology, and cybersecurity
- Innovation and diffusion of new processes and ideas
- Productivity-friendly business environments, and
- A skilled and educated workforce.
Particular reference is made to technology adoption, as Australia has relatively low levels of uptake of advanced digital technology such as artificial intelligence. The Productivity Commission is hoping that the Australian government will encourage businesses to adopt further digital technologies through revitalised data infrastructure and policy frameworks as well as cybersecurity development. This in turn should have the effect of opening Australia to foreign investment, promoting efficiency, innovation, and diffusion, and bolstering the education of Australia’s human capital and workforce.
The Productivity Commission also lists upcoming challenges to the productivity of Australian businesses. This includes:
- A growing services sector
- An expanding non-market services sector which is heavily regulated and prevents competition
- Climate change impacts and efforts to decarbonise Australia’s economy
- Global political tensions in neighbouring and international regions affecting free trade, capital, and labour agreements, and
- The containing impact of the COVID-19 pandemic on workplace structure and social environments.
The Productivity Commission is intending to release a further series of interim reports discussing the aforementioned avenues for productivity. The final report is scheduled to be released in February 2023. The Productivity Commission is currently inviting interested organisations and individuals to make written submissions in response to the rationale of the interim report by Friday 7 October 2022.
For a full reading of the report, see here.