October 7th 2000

  Buy Issue 2593

Articles from this issue:

Editorial: A lesson from the Olympics

Cover Story: Oil: who is blackmailing whom?

Canberra Observed: Freedom of religion or freedom from religion?

The Economy: John Stone's reflections on the declining dollar

Straws in the Wind: Long day's journey into night

The Media

Family: Long-term legacy of divorce


Defence: Regional crises require lift in defence spending

Comment: Globalism and democracy: the challenge ahead

International Affairs: West papua, the next East Timor?

Drugs: Compulsory treatment: Sweden shows the way

Britain: Whitewash over East German espionage in UK

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Editorial: A lesson from the Olympics

by Peter Westmore

News Weekly, October 7, 2000
The Millennium Olympic Games in Sydney have not only showcased Australia and its athletes to the world, but have been a source of immense pride to all Australians, both in the conduct of the event and in the world-class performances of many Australian athletes.

The success of Australia's athletes owes something to the rich sporting environment in Australia, nurtured by both home and school, in which some five million people, about 30 per cent of the country's population, regularly participate in sporting activities, according to a survey by the Australian Bureau of Statistics.

But at the Olympic level, success is largely due to the heavy government expenditure on the Australian Sports Commission and particularly, the Australian Institute of Sport (AIS), which is responsible for the development of sporting talent for the Olympic Games, Commonwealth Games and world championships.

Most of Australia's élite athletes are on AIS scholarships, which are offered to around 600 people annually. The scholarships enable athletes to receive world class coaching, living allowances, and assistance to attend national and international sporting events. During 1997, government funding was also provided to 112 sporting organisations.

Other successful countries have similar programs.

Industry support

If this level of support was necessary to enable Australian athletes to compete at international level, the question must be asked why there is no equivalent assistance given to Australian industries - primary and secondary - which under government policy, must also compete at the international level?

Over the past few weeks, as the value of the Australian dollar has plunged below US54 cents, a number of people - including the Treasurer - have bemoaned the fact that Australia does not have a single international company in the information technology industry.

The Finnish company, Nokia, was even raised as a comparison.

It is instructive to look at what lies behind Nokia's emergence as a global mobile phone company. Its growth was due to three essential elements: the company's own innovative approach to technology, strong government support, and the fact that it was in the right place, at the right time, to benefit from both new technology and the development of the European Common Market.

Finland, a country with a population of just over five million, nevertheless generates 32 per cent of its GDP from industry (compared to just 13 per cent in Australia), due to strong government support, including assistance to new businesses and the National Technology Agency, a government body which provides funds for applied research and development (R&D).

Largely as a result of this, Finland is a net exporter of high tech manufactured goods, in contrast to Australia, which has a trade deficit in manufactured goods approaching $60 billion, almost twice the annual Current Account Deficit.

Nokia was founded in the 1860s as a timber company, and over the following 100 years, grew into a diversified conglomerate, with interests in forestry, chemicals, rubber and the electrical industry.

Its decision to expand into electronics came as semiconductor technology was making its way from the lab into the factory.

In 1967, the electronics division generated just three percent of Nokia's net sales, and provided work for 460 people. Since then, it has concentrated on new telecommunications technology.

In the early 1990s, Nokia made agreements to supply mobile phone networks to nine other European countries. By August 1997, Nokia had supplied these systems to 59 operators in 31 countries.

In 1994, Nokia was the first manufacturer to launch a series of hand-held mobile phones, the Nokia 2100 family, for all major digital standards around the world.

When Finland joined the European Union in 1995, it was able to export to a market of some 300 million people. Nokia has established manufacturing plants around the world, and currently produces over a million mobile phones per month.

Finland is an example of how deliberate policy can assist industries gain "a competitive advantage" as Harvard's Professor Michael Porter describes it, over foreign competitors.

If Australia is to address the underlying cause of the collapse of the Australian dollar - the unsustainable blow-out in the foreign debt - government policy must assist the rebuilding of Australia's manufacturing base, just as Finland has done, instead of allowing more and more Australian-owned industries to collapse or fall into foreign hands.

If it's good enough for the government to provide strong financial support our athletes, why not for far more important purposes: the industries which employ millions of Australians?

- Peter Westmore is National President of the National Civic Council

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