If Only We Could Export Our Minds As Fast As Our Minerals

Last Updated May 26, 2010 5:38 PM EDT

Aussies know we're lucky to have a big country rich in minerals close enough to the world's fastest growing economies, but when it comes to service industries we're a net importer. How can that be? Don't we enjoy world class education and a land of unending opportunity? Surely we should be selling more services than we need.
So let's look a little closer at the figures. Almost two thirds of our service exports come from tourism. If we take that out of the equation then we exported $20.2 billion in services last year, but we imported 50 percent more (again without the travel). The gap has doubled over the last ten years. Have we become so complacent about our primary industries that we just don't focus on services anymore?

When it comes to intellectual property rights we make less than a quarter of the $3.6 billion we spend (primarily in software and trademark use). The net export position on IP rights has mushroomed over the last ten years, which is a worry in a nation that was once proud of its entrepreneurial spirit. What there is is exported from NSW (40 percent), Victoria (34 percent) and Queensland (21 percent) --- only 4 percent comes from the rest of the country.

International Trade in Services
I'm extracting this data from the ABS International Trade in Services data. A big slug of the import and export total comes from "other" business services --- which includes management consulting, where we export as much as well sell (around $3.4 billion), and technical/trade-related services, where we buy-in $4.3 billion in advice, but export just $3 billion.

There's no doubt Australia has participated more in the trade of services over the last decade but we haven't won from the experience. The National Broadband Network is being touted as positioning us for the ensuing information age. You can see now how becoming a net exporter of services, particularly in IP, finance and consulting, is a big challenge or, more optimistically, one huge opportunity.

It's something to think about for when the mineral boom ends, but how do we turn the situation around?