The primitive country?

The same type of reasoning applies to the resources boom. Putting aside the issue of the distribution of the benefits of this boom, it is readily apparent that overreliance on commodity price fuelled terms of trade growth is not sustainable as it exposes Australia to exogenous shocks the avoidance of which was, supposedly, a key policy aim of the gnomes of Canberra.

Given the deregulation of global markets, global commodity price bubbles are a recurring risk. Secondly, the Chinese growth model, which helps to fuel global commodity prices, is not sustainable and one non-trivial reason for this is the level of economic inequality that it fosters in China. Beijing is interested in shifting toward high technology industry because that promotes wages growth and therefore encourages a greater consumption share of GDP.

It might be argued that what is being argued for Australia is a return to the "good old days" of wholesale industry protection. It is argued that this will just protect inefficient rust-belt industries that cannot compete in global markets.

This is a caricature.

What is being argued for is something else entirely. What is proposed is a major national effort by government to have Australia punch above its weight in cutting edge science and technology, which form the basis of industry skewed toward the high end of the manufacturing chain. Compared to its OECD partners, indeed even regional partners, Australia has a poor commitment to science and technology.

China is a major mover in global science as it tries to catch up with the West, given that it is still burdened with the legacy of having missed the scientific revolution. South Korea is another regional country spending big on science and technology. Even Turkey and Iran, which are ruled by Islamists of differing shade and degree, are making major investments in science and technology.

Lee Kuan Yew stated that Australia might become "the poor white trash" of Asia. That dismissal hurt, but we might well end up, on current trends, as the most primitive, if not necessarily the poorest, link in the Asian division of labour.

We can, and must, aspire to be something better and grander.

This even has its implications for national security given our traditional reliance upon achieving security in Asia through high technology weapons and command systems.

We should be spending more on basic science and technological innovation from which the global industries of tomorrow will rise. We should try and retain our best scientific talent rather than have them go overseas to ply their trade for the benefit of others.

We should be investing big in theoretical biology in order to better tap into the emerging biology driven economy of the future. We should be committing ourselves to being at the cutting edge of the ecologically sustainable industries, transport systems and energy sources that are mandatory for the wellbeing of civilisation. The much maligned, and now defunct, Green Car initiative was a positive development toward this end.

We should be trying to do more in quantum computing and in space technology. We should have our best young mathematical talent working on the type of mathematics that will be crucial for the development of basic theoretical science rather than have it increasingly wasted on socially destructive mathematical models of financial "innovation."