Growing international trade and migration will change

We will
the structure of economic activity in Australia.
have
we
which
in
specialise more in production activities

services
a Comparative advantage, and buy the goods and
This
that we are less eicient at producing from overseas.
Australian
means there will be winners and losers in the
labour market.

to be a
At the moment, for example, it is a good time

but not such a

mining engineer or construction worker,
however,
Overall,
good time to be amanufacturing worker.
to
we should expect the gains from closer integration

outweigh the losses.

more
Our economy and labour market will perform
that
activities
the
on
strongly for the opportunity to focus
Australia is best suited to, an effect that will
by our proximity to Asia.

be magni ed

AustraIias comparative advantage relative to

Asia is in production activities that are intensive
in highskilled labour, so we need a foundation
for continued specialisation in those areas.

SKILLS. SKILLS. SKILLS

labour
The big question, 1 think, is what the Australian
opportunity
ofthe
market can do to take most advantage
new question,
that the Asian Century presents. This is not a

science. But the

and l dont believe the answer is rocket

reason,
question and answer are important and, for that
worth taking up again.

skills.
Our first strategy should be skills, skills,
is
Asia
to
relative
Australias Comparative advantage
highin
in production activities that are intensive

for continued
skilled labour, so we need a foundation

specialisation in those areas.

as Asian
This will require us to run to stay ahead,
workoftheir
levels
skill
the
nations also seek to increase
suggesting
report
Institute
forces, with a recent Grattan
skill levels
rapid improvement in numeracy and literacy

in Hong Kong, China and Singapore.

highskilled
Maintaining Australias position as a

in higher
country is largely about increasing participation

quality of
education, but it is also about improving the
dem~
with
programs

education particularly through

programs
intervention
early
as
onstrated net benefits, such
to assist children from disadvantaged backgrounds.
to
it can also be about giving new opportunities
Asia,
in
population
of
size
students from Asia. With the
having some
and the higher education systems there still

as in
way to go to allow the same rates of participation

highquality
Australia, it seems there is scope to attract
access to
gain
to
able
not
are
students from Asia who
countries.
university study in their own

students
A largescale scholarship system targeted at

science and
from Asia for graduate level study in

to the
engineering fields would be one idea for adding

students
skilled workforce in both Australia and the

FLEXIBILITY
The second strategy I would suggest is to foster
Century,
exibility and facilitate adjustment. in the Asian

it seems that it will be increasingly important that

Australian workers can be flexible in the locations where

they work, and with whom they work.

mean
More particularly, closer integration is likely to
and
Asia
in
working
time
spending
a higher chance of

working with Asian co-workers. Having this flexibility

would seem to require some proportion ofthe Australian

more
workforce to have Asian language skills but, probably

as well as a
importantly, an awareness of Asian cultures,

workplace.
culture in Australia that values diversity in the
will
I have described how closer integration with Asia

for
be the source of adjustment in the labour market
to these
example, of some job losses. Easing adjustment

in
sorts of changes is not something we have done well
Australia in the past.

Yet it could be a powerful mechanism for generating

of
acceptance of change. Certainly, we have a system

a safety net
welfare income support benets to provide
economy
for those who lose their jobs as the Australian
adjusts to changes in patterns of international trade.
We could, however, do much more to assist those who

economy
are disadvantaged by structural change in the

for
to get back into work through serious programs
re-employment.
re-skilling and providing pathways to

of
[eff Borland is Professor of Economics at University
Melbourne.
2012 Jeff Borland. Posted 20 April 2012.
The Conversation | http://theconversation.edu.au

home countries.

Issues in Society jvolume 350

Australia's Engagement with Asia

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