Executive Summary WA Context
Western Australia is in a sustained period of expansion, driven by robust demand for products and services. Successful economic and public health management through the pandemic has enabled business to continue its recovery almost without pause, while the global recovery and the accelerating green energy transition is driving demand for WA’s primary production sectors – mining, natural gas, agriculture and forestry. The good news is tempered in the medium term due to growing geopolitical instability. These are raising barriers to trade and limiting the flow of products to Australia’s trading partners. Trade in these inputs may require some realignment to ensure diversity of supply and economic resilience. These issues and high oil and gas prices may also accelerate new energy development to decouple reliance on outside markets. Western Australia has the good fortune to have options for adaptation, growth and diversification due to an abundance of primary materials. The WA Government’s study of the comparative advantages and structural challenges affecting WA’s regional growth and diversification identifies markets with significant potential value for investors.1 These prospects broadly fall into the categories of: 1. Major infrastructure projects that improve the business and cost of living fundamentals, removing barriers to investment and growth across regional WA; and 2. Diversification opportunities that deliver
Of the two, realising diversification opportunities is the more straightforward. State and Commonwealth industrial development policies, grant schemes and incentives support industry- driven diversification investments. This process is industry rather than project focused, open to a range of projects and builds on what already exists. A good example of this is the focus on leveraging a wealth of battery minerals to develop innovative energy storage technologies capable of serving resource industries that operate in isolated locations. WA has demonstrated expertise in operating sophisticated mining and defence equipment in remote regions. The State has strong competitive advantages in this market, including domestic demand that underwrites workforce development and innovation processes necessary to develop products and services for export. Similar opportunities exist in the accommodation sector, where modular construction methods with embedded microgrid and telecommunications infrastructure can deliver new housing and community amenities at the pace needed to address acute shortages that present during resource sector growth cycles, with the flexibility needed to redeploy units as the construction phase slows.2 The Government study identified the following sectors as offering the greatest potential for diversifying the economies of WA’s regions: 3 • Technology and Advanced Manufacturing
was identified as offering the greatest diversity of opportunities with growth potential, due to a changing mix of comparative advantages across the regions and the relative lack of existing proponents in these categories.
value to WA’s existing internationally competitive industries that also have export potential.
1 Hausmann, R., et al., 2021. Economic Complexity Report for Western Australia. Copy at - www.tinyurl.com/yk4vt5d6 2 Hausmann, R., et al., 2021. Economic Complexity Report for Western Australia. Copy at - www.tinyurl.com/yk4vt5d6 3 Harvard policy recommendations
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