Australia’s economy has expanded for decades on mining and agriculture, yet labour productivity has barely moved. This stagnation threatens living standards and calls for urgent policy action.
Singapore: Prosperity Without Natural Resources
When Singapore gained independence in 1965 it faced high unemployment, scarce resources and a tiny domestic market.
Founding Prime Minister Lee Kuan Yew made the city‑state an investment hub by streamlining approvals, building world‑class infrastructure and coordinating foreign direct investment through the Economic Development Board.
Semiconductor firms such as National Semiconductor, Micron and GlobalFoundries set up operations within weeks, while pharmaceutical giants Pfizer and GSK established major plants.
Today the nation leads in finance, technology and advanced manufacturing, proving that decisive policy can offset a lack of natural resources.
Its political system limits opposition and press freedom, a model Australia need not emulate.
Israel: Innovation Under Pressure
Despite a population of 10 million and persistent security threats, Israel allocates about 7.8 % of GDP to defence, far above Australia’s 2 %.
The Stockholm International Peace Research Institute reports that Israeli R&D spending reached 6.96 % of GDP in 2023, compared with Australia’s 1.69 % in 2023‑24.
Tech giants — including Microsoft, Google, Apple, Intel, Nvidia and Amazon — maintain research centres in Israel, while home‑grown firms such as Check Point, Mobileye and Waze have become global leaders.
Intel’s $15.3 billion acquisition of Mobileye and Google’s $1.1 billion purchase of Waze illustrate the ecosystem’s value.
High‑tech accounts for 17 % of GDP and more than half of exports, according to the Israel Innovation Authority, and defence research has spill‑over benefits for cybersecurity firms like CyberArk.
Australia’s Productivity Problem
The Productivity Commission estimates labour productivity grew only 0.3 % annually between 2015 and 2025, versus 2.5 % in Singapore and 1.7 % in Israel.
Weak productivity growth suppresses real wages, strains public services and erodes living standards.
CSIRO’s Wi‑Fi technology generates strong licensing revenue, yet manufacturing and commercialisation have occurred overseas, highlighting a gap in turning research into local value.
Major tech firms operate in Australia, but most activities focus on sales and services rather than R&D and IP creation.
Turning Wealth Into Future Prosperity
Policymakers must encourage high‑value investment, deepen university‑industry links, upskill workers and remove barriers to innovation.
A culture that rewards ambition, enterprise and risk‑taking is essential to capture more of the economic benefits from Australia’s abundant resources.
The greatest risk is not a shortage of commodities but complacency that can arise from long‑standing prosperity.
Views expressed are those of the author and do not necessarily reflect those of The Epoch Times.
