PROGRESS 2050: Toward a prosperous future for all Australians
Australia is at risk of being left out of the new wave of globalisation - the rise of the global production and supply chains.
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World economic production has undergone substantial restructuring as a new wave of globalisation has emerged in the post-"dot com" era. A number of developing economies have risen in prominence both as both producers and as markets. Many businesses and services have rapidly become more globalised.
In both manufacturing and services, the focus of international investment has shifted towards "efficiency seeking". This shift is being driven by competition and the global rationalisation of production. As a result, the production of both goods and services is becoming increasingly fragmented and geographically dispersed. At the same time, an increasing role is played by companies and alliances, large and small, that operate across borders.
As this process continues, the world economy increasingly resembles a series of chains for the production and supply of goods and services - the "global chains" of the report's title.
Perhaps the best-known example of this process is Dell, the computer firm which sells its PCs direct to customers via the Web and the telephone, sourcing parts mainly from Taiwan and China and assembling them in factories spread worldwide from Ireland to Malaysia. But other industries connected into global supply chains range from cars to software to education services such as universities.
The rise of "global chains" raises a very real challenges for Australia. There is a risk that Australia will find it increasingly difficult to link into these global systems - that we will be left out of these global chains.
The Global Chains report has been written for CEDA by Professor John Houghton of Victoria University's Centre for Strategic Economic Studies.
Professor Houghton is an acknowledged international expert on the influence of information technology on production systems, and consults frequently for the OECD.
As part of our Economic Recovery series, CEDA is examines the implications for Australia’s security of supply for goods now and into the future and outlining how Australia should respond to emerging trends, including implications for trade and industry policy.
Read more International affairs May 29, 2016Australia has dropped out of the top 20 most competitive nations, falling to 21 according to the 2017 World Competitiveness survey results. However, it has fared better in a special digital competitiveness ranking coming in at 15.
Read more International affairs April 29, 2012In 2012, Australia slipped six places to 15 in world competitiveness rankings with significant drops in the labour market and international trade competitiveness rankings. Released May 2012.
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