11 Apr 2022

Austrade has released its Why Australia Benchmark Report 2022.

Now in its 22nd year, the report compares Australia’s economy and trade with our global peers. We cover a wide range of measures – economic, social and financial. We analyse new exports like fintech, and staple industries like minerals and agriculture.

The report shows why Australia is a global standout for trade and investment. It also shows that Australia continues to outperform most advanced economies. And it asks ‘why?’

Highlights of the report

The Benchmark Report 2022 is structured around the 5 factors that underpin our global success.

  • A resilient economy
  • Dynamic industries
  • Innovation and skills
  • Global ties
  • Strong foundations.

Our Economics Team has delved into global databases and industry reports. Armed with these insights, we can benchmark Australia’s performance against other major economies in each category.

In this blog, I look at three things in particular: economic resilience, renewable energy and our dynamic tech industry.

A resilient economy that outperforms other advanced economies

Australia’s economy has proved resilient to the COVID-19 pandemic.

Closed borders and targeted lockdowns contained the virus. This did affect vital industries like tourism. However, our exports remained strong in most sectors. This is partially thanks to high commodity prices.

Following a solid rebound of 4.7% in 2021, Australia’s growth rate is expected to remain strong at 4.1% in 2022, according to the International Monetary Fund (IMF). Meanwhile, major tax incentives look set to trigger the strongest boost in business investment since the mining boom.

So, Australia’s economy will continue to outperform. Our GDP is projected to be 6.6% larger by the end of 2022 than in pre-pandemic 2019. This increase over the pre-COVID-19 level is higher than the average for advanced economies (4.2%). (Source: Austrade, Why Australia Benchmark Report 2022, page 7, Expected change in real GDP1, selected economies.)

The IMF forecasts endorse Australia’s economic policy. It says that ‘strong health and economic policies allowed for a quick economic recovery’, and that our recovery was ‘faster than in most advanced economies.’ 

080422-Expected-change-in-real-GDP-selected-economies

 Australia sets new renewables records in 2020

Renewables deliver a fast-growing share of Australian energy production (Source: Austrade, Why Australia Benchmark Report 2022, page 19, Australia’s renewable energy generation volumes and world rankings). They accounted for a record 25% of total electricity generation in 2020.

Australian companies have dramatically increased production of renewable energy since 2010. Wind and solar have overtaken hydro in terms of energy production.

Currently, Australia is the world’s seventh largest producer of solar energy. Innovation in solar energy is attracting major investment. Australia has now the highest wind and solar capacity of any country outside of Europe (804 watts per person). (Source: The Honourable Angus Taylor, Minister for Industry, Energy and Emissions, Australia sets new renewables records in 2020 [media release], Australian Government, 2 February 2021.)

Figure 2: Australia’s renewable energy generation volumes and world rankings, 1980 to 2020

Figure-2-Australia-renewable-energy-generation

 

Notes: CAGR = compound annual growth rate.
Sources: U.S. Energy Information Administration, 2021, International energy statistics; Austrade

Australia’s thriving tech sector

One core strength is Australia’s high-skills, high-talent workforce. This makes us one of the most innovative countries in the world. For example, our scientific institutions rank in the world’s top 1% in 15 individual fields of research – including space science, physics, computer science and clinical medicine.

The result is world-class technology industries. Today, hundreds of Australian tech startups are pioneering amazing new technologies in finance, medicine, education and agriculture.

This has turned the tech sector into an engine of growth. The sector created 65,000 jobs during the pandemic, on top of the 861,000 people it already employed, according to analysis by my colleague, Ashley Brosnan.

Right now, Australia has one of the southern hemisphere’s biggest technology industries. If it were classified as a single industry, it would be the third largest contributor to GDP in Australia – ahead of the health and construction sectors. (Source: Austrade, Why Australia Benchmark Report 2022, page 12, Australia’s real gross value added by industry.)

The tech sector’s economic contribution to GDP has increased 79% since 2016–17 to reach A$167 billion in 2020–21. This equates to around 8.5% of GDP.

This is very good news for Australian trade. Rapid growth in a new industry will help us shift towards a more diversified trade portfolio. It helps our country create new sources of value, and attract more domestic and foreign investment in our technology industries.

Figure 3: The technology sector’s contribution to Australian GDP, A$ billion

Figure-3-The-technology-sector-contribution-Australian-GDP

 

Note: The direct tech sector is defined as internet publishing and broadcasting, telecommunications services, internet service providers, web search portals, data processing services, and computer system design and related services.
Sources: Tech Council of Australia, 2021, The Economic Contribution of Australia’s Tech Sector; Austrade

The 2022 edition also provides snapshots of Australia’s globally significant industries: resources and energy, agribusiness, financial institutions, digital consumer as well as fintech. These industries help us respond effectively to all manner of disruptions.

You can download charts from the Why Australia Benchmark Report 2022 for your presentations and reports.

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