Failure to Invest in New Tech Damaging Economy, Incomes & Jobs
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Coronavirus recession, not robots, set to take jobs from future workforce
Startling new research from the Centre for Future Work has shown that Australia’s economy is now regressing in its use of new technology, with negative implications for productivity, incomes, and job quality.
The report compiles 8 statistical indicators confirming that the pace of innovation and automation in Australia’s economy has slowed down dramatically in the last decade.
Major findings of the report include:
- Business investment in new machinery (including robots) is weaker than at any point in Australia’s postwar history.
- Business spending on new research and technology has also been falling in Australia, and now ranks well behind the average of other industrial countries (and even some emerging economies, like China).
- The average amount of machinery and equipment used by the typical Australian worker has been declining since 2014, and has since fallen by 6%.
- Because of less automation and innovation, average productivity in Australia’s economy has also been declining for three straight years – also the weakest performance in Australia’s postwar history.
The findings contrast sharply with the common concern that robots and other forms of automation will threaten future job security for Australian workers.
“In fact, the biggest problem is that Australian businesses are not investing nearly enough in new technology, not that they are investing too much,” said Dr. Jim Stanford, author of the report and Economist and Director of the Centre for Future Work.
“The decline in average capital intensity and average productivity in the Australian economy is very unusual, and very concerning, because it suggests a structural regression in our overall economic development.”
“The unprecedented weakness of business investment in new technology does not mean that Australian jobs are somehow safer. To the contrary, the failure of business investment means that even more jobs will be located in low-productivity, low-tech, low-wage industries – with terrible implications for wages and job quality.”
“Business leaders love to complain that Australia’s productivity problems are due to red tape, taxes, and unions. In fact, the evidence is clear that their own failure to invest in new capital and new technology explains the stagnation in productivity. Instead of blaming others for this outcome, business leaders need to look in the mirror.”