Australia’s response to 5 global megatrends
17 Nov 2020
We all know #COVID19 has had far reaching health, social and economic impacts. Business as usual has changed, bringing with it a new normal for #trade and #investment.
Australian exporters have faced considerable loss of air freight, collapse in global demand and loss of major markets, including food and beverage, tourism and international education with Australian exports forecast to fall 10.6 per cent in Q3 2020 relative to the previous year.
Our country also faces a more competitive playing field for foreign direct investment (FDI) attraction, expected to decrease by 40 per cent from $1.54 trillion in 2019 to under $1 trillion; lower than 2005 levels.
On a positive note, the share of Australia’s GDP coming from exports has risen from 12.5 per cent in 1990 to 22 per cent today. It is clear that trade and investment is critical for Australia’s economic recovery. The crisis has accelerated already occurring shifts in the global economy and presents new opportunities for Australian businesses.
Austrade and CSIRO publishes major new analysis
In a report released today by Austrade and CSIRO’s Data61 Trade and Investment Megatrends changes in the global trade and investment landscape post-pandemic are explored. The report presents a set of strategic actions for Australian government and industries to capitalise on.
There are five megatrends reshaping the global trade and investment landscape likely to impact Australian business over the coming months and years:
- A changing economic landscape. In terms of debt-to-GDP ratios, interest rates, unemployment and productivity, the global economic landscape has changed. The next ten years for governments and businesses will be about rebuilding and recovery.
- The digital rebound. Ten years of digital transformation has happened in just a few months. A vast amount of economic activity has shifted from the physical to the virtual world. And it may not all go back. Telework, telehealth, online retail, online education and online entertainment are booming, presenting businesses an opportunity to harness the digital economy.
- Towards resilient supply chains. The global trade freeze saw many companies and countries worldwide unable to source critical goods and services including manufacturers, food and medicine suppliers. As supply chains are rebuilt, buyers will be looking for new, secure and reliable options.
- Closer to home. The COVID-19 shock has been associated with a substantial slow-down in global and domestic travel due to border restrictions and safety concerns. People are taking fewer and shorter flights. Their living and buying patterns are coming closer to home.
- The new normal. The pandemic follows Australia’s worst drought and bushfire season, amidst the emergence of a complex geopolitical landscape. Australia is also facing new forms of escalated cybersecurity risk. However, businesses now have access to greater technological capability than ever before.
Business should face the new normal
Australian businesses can take early and strategic actions to achieve first-mover advantages and accelerate trade and investment to secure Australia’s future.
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