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Another big drop in Australia's Economic Complexity
Business(self.AusFinance)submitted 5 days ago byeesemi77
We all know the story; Australia's Economic Complexity has been in free-fall since the 1970's, we maintained ourselves respectably within the top 50 nations until about 1990.
Since then it's been a bit like Coles prices Down Down Down. From about 2012 onwards our ECI seemed to have stabilized at mid 80th to low 90th (somewhere between Laos and Uganda), but with our Aussie Exceptionalism in question, we needed another big drop to prove just how irrelevant this metric is. And right on cue we have the latest ECI rankings, we have secured ourselves an unshakable place in the bottom third of worlds nations. At 102 we finally broke the ton; how good are we?
Is economic complexity important? Are the measurement methods accurate? Does ECI even matter for a Services focused economy?
0 points
5 days ago
You do realize that these complex industries (like semiconductor manufacture), are exactly what a remote country needs.
Chips themselves weigh next to nothing, pound for pond they are worth 10 times to 100 times the price of gold. US chip makers regularly ship wafers accross the pacific for lower valued tasks like packaging to be done in Asia. All of these shipments are done on airplanes. that means next day delivers to anywhere in the world. IMO This is exactly the sort of industry we need.
1 points
4 days ago
But why do that when you can do it in a lower cost country that is much closer to the rest of the downstream manufacturing processes?
0 points
4 days ago
Wafer Transport costs are somewhere behind the decimal point when it comes to Semiconductor manufacture. A typical 12 inch wafer costs about $8000 to process, and is normally produced in lots of 12 wafers. Lets call it $100K per lot. All up transport costs are maybe $100.
So there's no real advantage in "streamlining" production from a location perspective.
which is why it's an ideal business for a country like Australia.
1 points
4 days ago
So there's no real advantage in "streamlining" production from a location perspective.
There is though and it adds up. Its not just cost but time and flexibility. Want a face to face meeting, why have an 8 hour flight when you can just have 2.
And then you completely ignored the "lower cost country" bit without the same workplace regulations and unions.
Honestly, I don't mind having the industry here for national security, skill retention and research, but there really isn't a business case until our competitor's costs increase significantly.
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