Padraic P. McGuinness, “Will Australia compete?,”
The Australian Financial Review, December 1, 1988, pp. 92-91.
To many Australians the question of how well we survive into the next century, whether Australia will be a dynamic middle power or a declining island falling behind the living standards of the rest of the world, is the main issue facing us.
It certainly was the reason why the Committee for Economic Development of Australia commissioned Ian Marsh, a political science and public administration expert at the Australian Graduate School of Management, to edit a volume of essays under the title Australian Can Compete. This was launched by the Governor of the Reserve Bank, Bob Johnston, yesterday.
The most interesting aspect of this volume is the way in which it represents an important change in how people are thinking about Australia’s economic future. The central issue is not really whether we can compete. Despite the now familiar listings of the failings of the Australian economy, and our policy weaknesses, it is pretty clear that we can compete. The real question is, do we really want to?
When dealing with this question the major issues become not so much those of the classic problems of protectionism, unions, egalitarianism, and so on. Rather it is a matter of whether our managerial culture, our political culture and, finally, our pathetic intellectual-literary culture, can adapt, and the resistance to adaptation which exists.
The most interesting essays in this volume are those that look at our managerial and political culture.
The introductory essay, by Professor Helen Hughes of the Australian National University, is as good a statement of our economic predicament as one could hope for. Professor Hughes is already known as one of the most incisive critics of our economic performance (and as one of the most sensible economists in Australia on issues of international development and other aid).
She points to the fundamental issue in Australia’s competitiveness, the failings of our educational system:
The educational system has not been starved of funds. Since a major revolution in thinking about educational funding in the 1960s, Australian expenditures per child have been among the highest in industrial countries. In spite of this, a ratio of 30 children to a teacher is not considered excessive for five-year-olds in a public kindergarten class. The administrative establishments have grown at the cost of expenditure on more teachers and new teaching aids such as computers. Seniority, not merit, decides promotion.
The solution that Professor Hughes sees is to introduce standard achievement testing for students. If necessary, this could be done by private enterprise, along the lines of the Princeton Testing Service in the USA.
A private enterprise testing service would enable objective testing to be introduced quickly, without interminable wrangling about its content. No test is, of course, perfect. All tests have some biases. Some people do better in examinations than others. Students can be coaches for exams. All these criticisms are valid.
Objective tests are nevertheless useful and usually superior to subjective internal testing practices. Objective tests would enable employers and tertiary institutions to compare students Australia-wide. State education systems could be compared for the first time in Australia. Within States, schools’ and teachers’ performance could be compared.
This would not be everything, but an absolutely essential beginning.
But possibly the central chapter of the book is that by Professor Jeremy Davis, head of the AGSM, on “cultural myths and strategic challenges” for Australian managers.
This makes the incisive criticism of Australian managerial style that it tends to be too private. That is, even if managers make the right decisions they tend to do so in a way that does not involve management (and, indeed, workers) down the line and therefore does not involve their full commitment.
This is a cultural factor which needs to be overcome. Davis criticises the notion that Australian business and government are mediocre, but does concede that they have not been well-adapted to the demands made on them, which are essentially that they come to terms with the peripheral role of Australian in the world economy.
Again, the question is: will our managers be able to make the cultural changes appropriate to, and will Australia be able to accept, an approach where, like Sweden, we accept that we are part of a much larger market?
Davis believes that the “level playing field” of deregulation and aggregate restructuring will not be enough —
To succeed from the periphery, we will have to accept the need to choose a number of potential winners and, having chosen them, to support them to the hilt in the difficult transformation ahead.
But he overlooks another aspect of Australian managerial culture, the tendency to get into bed, financially, with government.
Colin Benjamin looks at the role of traditional Australian values of freedom, fairness and individuality, and how Australians will have to adapt in the new international environment, and abandon insularity.
Drawing on annual surveys by the Roy Morgan research centre for the Ogilvy & Mather futures division, Benjamin points out:
When these results are combined with international values studies comparing patterns of cultural similarity and difference, Australians are seen to be among the most individualistic people in the world. Although we have traditionally believed ourselves to be solidly egalitarian, cultural and values research reveals a more complex reality.
Australians place economic security at the top of their list of goals in life. They put personal freedom above equality, national growth above international poverty, and family and personal interests ahead of any national rhetoric.
These are the aspects of the Australian character that are going to be taken into account in the development of policy, and the managerial approaches that will enable Australian business to perform adequately.
We can compete — are we going to be willing to do so?
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