Queensland, the Smart State

It is almost 10 years since the “Smart State” idea, a major cornerstone of the then freshly elected Beattie Labor Government, was launched. It has since been one of the distinguishing features of the Labor Government.

Economically, “Smart State” initiatives sought to diversify the Queensland economy to a so-called “knowledge” economy.

Increased spending on research and development, education and special research centres underpinned the policy - along with a lot of spinning by effusive Premiers.

It was hoped that the policy would produce high-tech industries. However, there was also a strong political goal within the strategy. It would not only distinguish Labor governments from its predecessors, but also make Coalition governments appear pedestrian given their focus on opening up the resource sector and preoccupation with traditional Queensland agricultural industries. The wider issue is whether the Smart State strategy has been the best use of resources.

After all, Smart State has cost us at least $500 million, of which most funding has gone to academics, universities and new research centres for apparent high-tech and new and emerging technologies (for example, biotechnology).

There has also been a lot of “relabelling” of programs to fit under the Smart State umbrella (for example, education). One strong argument is we should be focusing on our strengths. For instance, 30 per cent of our manufacturing sector is involved in food processing, which given our agricultural economy, makes sense.

Consequently, more funds should have been directed to leveraging greater benefits from this sector.

You only need to look at how important food is becoming in the world economy. The Smart State strategy is all about government spending.

In Queensland, government spending on research and development has long been on par with the rest of Australia, but private sector spending has not. Commercialisation of research and lack of innovative practices in the private sector are the real problems holding Queensland back.

A more deregulatory framework, improved state taxes, and better allocation of government spending on projects that make a difference are seen as more appropriate policy responses. In other words, let's make Queensland have the right competitive environment for business to come here and to make profits.

So 10 years on and what have we got? For one, a lot of happy vice chancellors and academics at a few of our major universities.

But Smart State's success in diversifying the wider economy has been minimal. Queensland's largest export is still coal, and our second largest industry, tourism, is noted for its low skills and low research base. One of the problems is trying to “measure” Smart State industries. The closest we come to it is the so-called “creative” industries sector.

Brisbane, compared to other capital cities, has a lower proportion of people in this sector than the national average. Moreover, in the skills game the Queensland Government itself has highlighted that this state has a less educated and qualified workforce than those interstate. Indeed, Queensland is losing some of its highly skilled workers to other states because of a lack of opportunities here.

Indeed, the real problem with the whole Smart State strategy is that it is too driven by government, too oriented towards glamour areas like biotechnology and so-called “creative industries” and completely misses the point about how to promote industry innovation, increase uptake of innovative practices and promote competitive advantage.

Sadly, we do not really know whether the “Smart State” is just “good politics” or “good policy”.

There has been no independent review of the policy, nor any dedicated and detailed debate in parliament. There has not even been a review by a parliamentary committee. The private sector should be calling for a full review of the Smart State strategy. We have not arrived at the Smart State's destination because it was ill defined in the first place and like the wizard at the end of the yellow brick road, largely illusory.