Michael Porter finds Australia's competitive position slipping

2nd May 1997

On a trip last month to Sydney, Professor Michael Porter of the Harvard Business School warned that Australia's relative position on the world's competitive ladder would continue to slip because the nation had not made an irrevocable commitment to competition. Professor Porter argued that in Australia, government policy had not yet made the productivity increases required to overtake the gains made by neighboring countries in the region. "I don't believe the nation has adopted the productivity mindset. I think we're still bouncing back and forth here trying to sort out what it is that we really want to do." Professor Porter told the audience of mostly business executives that Australia's infrastructure -- it's ports, education system and transport network -- did not strike him as being world class; these relative inefficiencies provided big impediments to business.

Professor Porter continued that Australia was surrounded by nations that were spending proportionately more on education; this spending would be reflected in time in better economic productivity. "The principle here is that one part of making this nation more profitable is going to be to have a plan and break through in each of these areas -- regulatory environment, physical infrastructure, human resources, science and technology and the availability of capital. All these things have to get better [in Australia]."

Professor Porter said it disturbed him that anyone would ask the question whether Australia should be economically part of Asia as the concept was so self-evident.

Submitted by Dr. Usha C. V. Haley, Academic Advisor to the Asia Pacific Management Forum

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