The disruption of global supply chains caused by the COVID-19 pandemic highlighted the importance of sovereign capability and self-sufficiency built from domestic manufacturing.
Hamish Gamble, Senior Project Officer – Sovereign Capability at the Australian Industrial Transformation Institute spoke with David Bevan on ABC Radio Adelaide (beginning 1:03:00) about the importance of building Australia’s sovereign capability.
The pandemic revealed that Australia’s industrial base is limited in its capacity to supply essential products. This is a result of a diminishing focus on industrial policy, which has led to Australia’s deindustrialisation, and over-reliance on bulk export of raw commodities.
The importance of industrial policy is now recognised as a way to help address societal challenges such as climate change, inequality, and social inclusion.
The National Reconstruction Fund (NRF) is a substantive industrial policy initiative which identifies the need for reindustrialisation, and prioritises key sectors, but more can be done.
A policy environment should be created which encourages industry collaboration in the national interest. This requires:
- the development of a national policy with clear goals for sovereign capability, and sectoral policies to develop key industries, and improve domestic production.
- a comprehensive supply chain analysis of identified priority areas
- stronger contractual obligations with multinational corporations for increased local production and industry participation.
Australia can build domestic production capabilities by using renewable energy sources to power the manufacture of renewable energy components, in turn increasing the supply of renewable energy.
With the adoption of national goals and strategies, steered by an industrial policy, Australia has the potential to be a world leader in carbon zero production of batteries, solar panels, wind turbines, and green hydrogen.