Why Australia’s productivity needs a passport
Productivity reform is high on the agenda – but this time, it must be different, writes Asialink Business CEO Leigh Howard.
The upcoming Economic Reform Roundtable in Canberra is a rare opportunity to shift the conversation beyond the usual domestic fixes and confront a deeper truth: Australia doesn’t just have a reform gap – it has a perspective gap.
Our global standing is slipping. We’ve fallen from 13th to 18th in the IMD World Competitiveness Rankings, with business efficiency ranking 37th and real GDP per capita at 60th.
Yet the national debate remains stuck on familiar ground: tax policy, skills shortages, regulatory bottlenecks, digital infrastructure and criticism from unions over poor management.
These matter, but they no longer cut it. What’s missing is serious consideration of the international forces shaping our economy and how we stack up against global competitors.
You can’t boost productivity in a trading nation without considering the opportunities and pressures that extend beyond our borders. Nearly half of Australia’s GDP is linked to trade, and one in four Australian jobs relies on it.
You might like
Australia is a globally integrated, services-driven nation that benefits from trade, foreign investment, and international talent flows. We are home to vibrant diaspora communities whose connections, insights, and cultural fluency offer a largely underutilised advantage in international engagement.
Our economic output is shaped not just by how efficiently we operate at home, but by how effectively we connect, compete and collaborate abroad. Yet this global dimension barely registers in most policy conversations.
We talk about skills, but not about how they translate into globally relevant capabilities. Are we equipping our workforce with the knowledge, experience and confidence to operate across cultures, sectors and markets?
We talk about digital transformation, but not digital trade. We discuss business incentives but rarely address how to build the confidence and capability of businesses to scale internationally and grow export income. In short, we focus on supply-side fixes while demand-side opportunities in global markets remain unrealised.
Stay informed, daily
The Roundtable, led by Treasurer Jim Chalmers, has the potential to reshape this conversation. Chalmers has often pointed to the Hawke–Keating era, linking its reforms with the productivity gains Australia saw in the 1990s. That ambition was inseparable from an outward-looking, globally engaged outlook. If this Roundtable is to succeed, it must reflect that view, not by revisiting the past, but by embracing a future where scale, investment and innovation increasingly benefit from international engagement.
That global environment is increasingly being shaped in our own region. The dynamism of Southeast Asia, the scale of China and India, and the rise of cross-Asian digital platforms are transforming how value is created. Global supply chains are shifting, digital ecosystems are expanding, and regional demand is accelerating. This isn’t a theoretical shift; it’s where the customers are, the growth is, and the competition is heading.
Our future productivity gains will depend on how well we position ourselves in this changing regional economy, not just how we rewire the settings at home.
Take services exports. After resources, they are now Australia’s largest export category, and among the most productive. Education, health, tourism, professional services — these sectors depend on deep external engagement to grow.
So too does digital trade, already worth more than $150 billion per year and rising fast. The platforms, payments, data standards and IP protections that support this trade aren’t just technical infrastructure. They are the rails on which economic performance now runs.
Foreign investment matters. It has long enabled productivity growth through infrastructure, technology and knowledge transfer. Are we doing enough to remain attractive, not just safe, to the capital we need?
What businesses need isn’t just more stimulus, but certainty: a regulatory environment that enables growth and strategies to compete globally.
None of this discounts the importance of domestic reform. But a growth agenda that stops at the border overlooks the context in which modern economies succeed.
The real productivity divide isn’t just between action and inaction. It’s a choice between narrow focus and global ambition.
Leigh Howard is CEO of Asialink Business, which is hosted by the University of Melbourne and supported by the Commonwealth Department of Industry, Science and Resources. Leigh has twenty years of experience working in Asia in the private and government sectors.
