Australia’s economy is knowledge driven

February 9, 2014

Australia is considered a knowledge-driven economy despite the fact that mining, education and agriculture sectors have been performing well since economic turmoil of early 1990s. Experts define knowledge economy as the one that is chiefly based on the evaluating, production and trading of knowledge. Unquestionably, Oz is a leading innovator in the world in social services, disaster preparedness, healthcare among others. In cities like Sydney, Melbourne, Perth, Canberra and Brisbane a huge number of people are creating solutions designed for Australian market as well as developing and emerging markets based on abstract ideas. A couple of start up companies have over the past five years unveiled online reservation services that have modernized the decades-old process of booking tickets in the country. When it comes to health sector, the country has seen a good number of start up companies help people living with diseases like cancer, diabetes and hypertension to better manage their health conditions and some have successfully designed new implants for knees, breasts and hands and through government funded agencies the implants have become cheaper to manufacture, making different implants affordable. The Australian government has traditionally put in place programs and policies aimed at helping researchers thrive in the country whose future has largely depended on their findings.

In a country where patents and intellectual property rights are fully respected, inventors have been able to protect their ideas with the help of existing laws. And the country produces between 3,000 to 5,000 patents for new technologies annually. If unaware, the benchmark for determining a market’s potential as center for innovation that acts as key driver for knowledge based economy is the number of patents a country produces annually and that acts as a measure used by the international start-up community about its prospects. In Australia, these patents have helped ensure that country’s inventors are protected from unscrupulous entrepreneurs whose work is to cash in on other peoples’ ideas and lawyers are regularly and rigorously used to enforce the origins of these new ideas. The ‘land down under’ embodies the spirit of innovation and lifelong learning that is critical for the country in its hopes of fulfilling the dream of being among the top economies in the world in the less than two decades from now. On just about every count where it matters the most, Australia today is way ahead of other developed economies in producing engineers with your blogger being among those who were churned in the past two decades and scientists.

In terms of investing in research and development, it spends a considerable amount compared to what other countries spend. For Australia to achieve the current levels of success, it has emphasized the importance of educating youngsters who want to learn rather apart from giving them content and knowledge and irrespective of which party is at the helm in Canberra, the country education system has traditionally promoted critical thinking in the end helping produce people who can lead in innovation. Despite continued incomes from natural resources dating back to 19th century during the Melbourne gold rush, Australia has relied with educating its population in driving economic growth in the past, present and future. The country invests heavily in research and development enabling it to produce technologically advanced products that are being sold across the world. Statistics shows that knowledge is now officially one of the primary sources of value and wealth creation in Australia.

The country has a clear pattern of growth in the creation and trade of new knowledge, derived from many sources, including academia where the country ranks among the best in the world, the private sector that been thriving despite the economic recession in other developed countries, research and development labs that are among the finest anywhere in the world and independent think tanks. Research into the knowledge economy has shown that knowledge-based capital, is critical to investment and growth and in Australia, the average annual growth of investment in knowledge based capital for the past forty years has been 1.3 times that of investments in traditional physical capital and that is why the number of scientific documents and journals published in Australia have risen significantly over the past four decades. That is a clear indication that Australia continued improvement of quality of new knowledge has produced more and better “knowledge products.” Australia seized an opportunity to maximize the benefits from an increased knowledge economy in time when other countries were still dilly dallying and has successfully moved away from a crippling reliance on natural resources and now develops technology itself and at the same time supplies the technology industries of other countries with the knowledge they need.

Contador Harrison