So Rudd gave a speech at the NPC rather than the debate with Tony Abbott he originally wanted. Nevertheless, it was a good speech. It places the Chicken Little nonsense from the Opposition in its proper context, looked at where the Australian economy has been, where it is now, and where Rudd sees it going, and wrapping it up into a coherent-sounding story. Much of it is not a new story – Labor politicians have been talking about productivity at least since Whitlam was Opposition Leader. But it’s a pretty good one.
One of Rudd’s seven “broad areas of policy” is one that is very often neglected in Australia’s business-cheerleading business press: the quality of Australian business management:
The BCA itself has recently reported on problems in Australian business productivity, competent project management as well as the most effective use of capital by management.
The future of the productivity agenda therefore does not in any way lie exclusively with the labour market.
In fact some bad industrial outcomes for some major projects can be the result of bad management decisions rather than union hostility.
Business might say this is exclusively a problem for business.
I would argue, as does the BCA, that this is also a problem for the nation.
Rudd went on to point out Australian business’s lack of engagement with Asia, specifically Indonesia, as an example of management failings; I’ll leave that one aside for another time.
But it is worth noting that there is evidence to support the contention that Australia’s business management is not up to “world’s best practice” – something that Australia’s business managers seem all too eager to impose on others. A 2009 study commissioned by the (then) Department of Innovation, Industry, Science and Research compared Australian management practices with a number of other countries. Their conclusion? Overall, Australia’s management standards were significantly inferior to countries including Japan, Germany, the USA, and Sweden, with a “long tail” of firms particularly including smaller and private (particularly family-run) firms exhibiting mediocre management practices. Furthermore, these poor practices were correlated with poorer outcomes on various objective metrics including sales and productivity.
Rudd’s speech was notably quiet on the question of what (aside from encouraging greater Asia literacy amongst our corporate executives) could be done about this poor performance. But the report provides some pointers. The idea of improving management education in Australia should be fairly uncontroversial. But there were other implications that might be less popular on both the left and the right with its veneration of small business. Larger businesses tend to score higher than smaller ones, and multinational businesses scored better than purely domestic ones.
Given that, what might a returned Rudd Labor government actually do in this area? Or is this another case where Rudd can accurately identify a problem but will be himself unable to manage to do anything about it?