Unis power productivity but are being overshadowed in the policy debate

Universities are the engines that power national productivity but without a focus on innovation and training, Australia risks falling behind.

Productivity is one of the main drivers of long-term growth in living standards and therefore is a key economic variable targeted by policy makers.

In November, The University of Queensland’s (UQ) Centre for Efficiency and Productivity Analysis (CEPA) hosted economists from across the world at the Asia Pacific Productivity Conference.

We welcomed academic, industry and government representatives from across Australia, New Zealand, India, Taiwan, Japan, Canada, USA, Spain and China in a discussion of cutting-edge productivity analysis.

This was an examination of productivity drivers, climate constraints, technological stagnation and innovation, sector-specific challenges and methodological advances in productivity analysis.

It was clear productivity concerns are not restricted to Australia. This is a problem that crosses borders, with few clear answers.

At its most basic level, a key driver of productivity is improving workers’ skills and providing workers with better technology.

The two fundamental roles of universities are training the workforce and researching new technologies. These are the building blocks of productivity.

Yet most government debate around productivity has centred on issues including taxation, red tape and increasing wage growth. While these topics are important, focusing on these alone is overlooking the impact of research and teaching.

But the fundamentals of improving productivity are global. The introduction of new technologies and techniques into the workplace is one way to improve labour productivity. Think about the impact of the mechanised assembly line on manufacturing, or computers on communication and data analysis.

But new technology does not need to be as revolutionary as this to have concrete impacts on productivity.

Globally, dairy farm profitability depends on two key factors – price of milk and on-farm productivity. Farmers can’t control the price of milk, feed or fertiliser, so they need to use the resources they have in the most effective ways.  

UQ researchers developed a new methodology to determine if a process was efficient and why it succeeded or failed. This approach separated productivity growth into five key components: technical change, technical efficiency, scale efficiency, input mix and climate effects.  

This research allows farmers, industry and policy makers to see how each factor affected productivity. This has enabled targeted strategies, including adopting specific technologies or management practices, to improve farm performance. This work has been adopted by Dairy Australia as well as several international industry associations.

Similarly, UQ engineering researchers are working to make mine rehabilitation faster and safer using autonomous technologies. Queensland’s mining industry is facing significant mine rehabilitation requirements and a shortage of skilled workers to carry out the work.  

UQ has partnered with Caterpillar and Thiess, supported by ACARP, to develop semi-autonomous bulldozer technology. This technology has been applied across three key areas: mining operations, mined land rehabilitation, and safe stockpile operations.  

Field trials of this technology have demonstrated productivity gains of up to 60 per cent.

Automation not only reduces fuel consumption and emissions, it also improves safety by taking drivers out of the cabs in dangerous environments, offering a sustainable, efficient and scalable solution to Queensland’s mining and rehabilitation challenges. 

But productivity is not just about new ideas. Innovation only delivers value when workers know how to use it effectively.

Universities teach students not just to operate advanced tools, but also to understand the principles behind them. This capability is essential in an economy where automation, AI and digital systems are reshaping processes at speed.

This can include undergraduate and postgraduate study, as well as workforce training, digital skills adoption, and executive and entrepreneur programs.

Productivity gains often come from rethinking how work is done. Higher education fosters this by combining technical knowledge with analytical and critical thinking skills. Without this pipeline of skilled, future-ready professionals, technological progress stalls and productivity growth falters.

For government the message is clear: universities are the beating heart of productivity. Without a pipeline of highly skilled workers, and the development of new technologies and techniques, the nation cannot meet its productivity goals.