Introduction By The Taskforce Chair

What is a Knowledge Nation?

A Knowledge Nation (sometimes called an ‘information society’) is one in which the largest section of the labour force is employed in processing information, broadly defined, which has the capacity to generate knowledge industries, and in which the products of research are directly applied in economic and social activity — health, environment, agriculture, mining and manufacturing, construction and infrastructure, transport, leisure activities, education, media and information.

The terms ‘information society’ or ‘information economy’ (2) were widely used in the 1980s when the transmission of encoded information was recognised as the common factor linking biology, zoology, genetics, biotechnology, computing and telecommunication. Information was seen as a ‘transforming technology’. The ‘Knowledge Nation’ concept is far broader, with its emphasis on cognition and understanding used in a human, social context, rather than concentrating on techniques of transmission, such as information technology, as if they were ends in themselves.

The Knowledge Nation is a unified concept, a new paradigm, which links together:

FIGURE 1: The complex interactions between the elements of the Knowledge Nation

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(2) The term ‘knowledge economy’ was coined in 1969 by the American social scientist Peter Drucker.

The common element is the ability to use knowledge to transform society, the economy and the environment.

Information or knowledge workers have comprised the largest Australian employment sector since 1966. They now number about 40 per cent of workers, far more than manufacturing, construction, agriculture and mining combined. They include people who create, manipulate, store, process and transfer information, working with symbols, or symbolic objects. Increasingly, knowledge workers can be found in all industries, not just those thought of as ‘new’. In fact, more and more, the ‘traditional’ industries — manufacturing, construction, agriculture and mining - require employees to be knowledge workers.

‘Dematerialisation’ or ‘the weightless economy’

Unpalatable though it might seem, Australia has to face up to and understand the concept of ‘dematerialisation’ or ‘the weightless economy’, with all its threats and opportunities. Europe is well aware of its implications, but the Bush Administration in the United States is committed to increasing levels of energy consumption. This is demonstrated by the divergent approaches to the Kyoto Protocol on greenhouse gas emissions. (BP and Shell, both European companies, promote energy efficiency, while Exxon from the United States rejects it.)

The Information Revolution, based on computing and the principle of ‘miniaturisation’, overturned some traditional assumptions in economics. As capacity increases, cost and resource consumption relative to output falls instead of rising, as might have been expected. Unlike coal or wood, information as a raw material is used but not consumed: it is sent, but the sender retains it.

As early as 1988, the OECD drew attention to the phenomenon of ‘dematerialisation’, the prospect that energy, hardware and materials would be a declining share of world trade, and the terms ‘Factor Four’ and ‘Factor Ten’ were coined. Factor Four is a projection that the use of fossil energy will drop by 75 per cent by 2030 and Factor Ten that per capita material requirements will fall by 90 per cent by 2050.

Neither Factor Four nor Factor Ten would involve a reduction in quality of life. Increased efficiency will provide the same outputs, for example in transport or domestic heating, with dramatically reduced inputs. Use of e-mail — as distinct from conventional letter delivery by post — is a familiar illustration of ‘dematerialisation’. So is the World Wide Web — a library with billions of pages that can be accessed from a hand-held terminal. The Google search engine claims access to 1.35 billion pages, equal to 54 kilometres of library shelving.

Australia cannot just play the ‘catch-up’ game. As Dr Robin Batterham, Chief Scientist for the Australian Government, wrote in his recent report The Chance to Change, we cannot just be ‘fast followers’, asserting that if we redouble our efforts in a decade we can be where the Koreans were 20 years ago. We must leapfrog well into the twenty-first century. (3)

(3) The Chance to Change — Final Report, November 2000 p24 http://www.isr.gov.au/science/review/ChanceFinal.pdf

‘Old’ and ‘New’ Economy

One reason for the slide of the Australian dollar to around 50 cents US (see Figure 2) is that we are perceived as having an economy based on the exploitation of raw materials, that is, an ‘old’ economy. The falling dollar was very good for traditional exports (a 25 per cent increase in 2000, the best figure since 1979) and reinforces our dependence. Some industries have old and new characteristics — for example, the mining industry is a major creator of information products.

Australia is going through a transitional period, moving, rather slowly, from the old economy towards the new economy. Most of the entrants in the BRW Rich 200 list (18 May 2001) are firmly in the old economy.

A Knowledge Nation will create stronger linkages between old and new elements in the Australian economy (see Table 1).

Unlike, say, Sweden, with its familiar brand names (Volvo, Saab, Scania, Bofors, L. M. Ericsson, Hasselbad, Husqvana, Orrefors, Atlas Copco) or Finland (Nokia, Kone), Australia suffers from a serious ‘inventory problem’, the lack of internationally recognised brand name goods and services for which there is high and rising demand. Foster’s and Qantas are among the few on the list. In world economy rankings, Australia is number 13, but runs the risk of being overtaken by nations with far smaller populations which offer high value added products.

We have to overcome the crippling mindset that repeats the mantra: ‘But Australia is only a small economy’. Smallness has not inhibited the Swedes, the Dutch, the Finns or the Israelis.

Linkages and a National Inventory (Cadastre)

Members of the Taskforce agree that Australia is largely an information society already, but we need to go further to become a Knowledge Nation. To achieve this, we must overcome some passive, immature and under-performing elements by improving linkages.

We have invested in a very strong infrastructure but the results are often disappointing. It is as if we had trained pilots for the air force, but had no planes for them to fly, or trained teachers, doctors and nurses but forgot about schools, hospitals and the resources to run them well. Universities, chronically starved of funds, are forced to get out the begging bowl or rely on short-term contract work, a situation that may transform them from communities of scholars to trading corporations. This funding crisis is moving universities away from long-term research that extends the bounds of knowledge and may have valuable but unexpected effects, towards sponsored, product oriented research, limited by the sponsor’s business aims.

FIGURE 2: Exchange Rates: US–Australian Dollar 1970–2001

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TABLE 1: Characteristics of the new and old economies

Many of Australia’s senior biotechnologists are now working in California— probably more than are working here. In effect, we have handed California a free gift of human resources. We are capable of educating people to the highest international level, but cannot provide career structures for them. (If California were an independent nation it would have the world’s fifth largest economy.)

Super-specialisation within our research organisations discourages collaboration and may have contributed to the phenomenon of the disappearing public intellectual.

Much of our knowledge-generating activity leads to information being locked in silos, and there is little encouragement to use it collaboratively. Competition for external funding means universities may see each other as competitors rather than collaborators, just as it is leading to rivalry between faculties in the same institution.

Our knowledge base is strong, but our linkages are very weak, a factor compounded by the dispersed population (with electronic communication compensating only marginally for this factor).

The Knowledge Nation concept emphasises linkages. Having a national inventory or knowledge bank — a cadastre — and making it available for public and private use would help us to understand how interdependent all sectors of our economy are, and act accordingly. We face serious environmental problems, made worse by a stubborn refusal to examine the extent of environmental damage, confusing long-term and short-term issues and exaggerating the differences between the advocates of ‘environmental’ issues and the agricultural and mining industries. We must emphasise how much they have in common. The economy is a wholly owned subsidiary of the environment. The environment is the totality of all there is in our world — the planet itself, soil, air, water, biota and minerals.

Some States have effective environmental registers; others do not. Creating national inventories of water, soil, wetlands, fishing, grazing areas and forests must be among the highest priorities for the Knowledge Nation, and be seen as an essential investment, not a cost.

A central pre-condition for being an effective Knowledge Nation is having an adequate knowledge base, which can then form the basis of public debate, community understanding, policy formulation and appropriate action by Commonwealth, State and Territory Governments.

Much of this material has already been collected by State Governments or by Commonwealth authorities such as the National Land and Water Resources Audit. However, the availability and quality of information is extremely variable. Some governments are extremely systematic in collecting data; others are not. As a result, it is difficult to make well informed decisions, for example, about the long-term viability of the fishing industry, dairying, beef cattle, forestry, and rice and cotton growing. Political sensitivity inhibits frank disclosure.

We have the technical competence, for example, with remote sensing by satellite, to conduct comprehensive surveys, to apply uniform standards and to encourage all governments to make this information accessible online, or in other published forms, generally as a public good, but charging consumers where this is justifiable. Material of extraordinary quality is held in some State offices already, but is not released for fear that the reality will generate controversy. So the truth is locked away.

The term cadastre, used to describe William the Conqueror’s Domesday Book — a record of a detailed survey of the lands of England — could be revived as a means of distinguishing comprehensive State of the Nation reports that apply uniform standards and help make the concept of a Knowledge Nation a reality.

The cost would be modest (80 per cent of the work is already done); the benefit to the nation would be enormous.

Creating and updating the cadastre should be on the agenda for meetings of the Council of Australian Governments (CoAG), with emphasis on sharing knowledge, sharing costs and sharing benefits, for the medium and long term.

National Information and Population Policies (and The Third Age)

A national information policy will guarantee access and equity in securing knowledge as a public good, and set out the boundaries between commercial values and privacy. This will be especially important for women, ethnic minorities, people living in remote areas, and Aborigines and Torres Strait Islander peoples. Strengthening the Australian Broadcasting Corporation, the Bureau of Meteorology and CSIRO must be among the highest priorities for a Knowledge Nation.

We should adopt a national population policy, encouraging a national, rational debate about Australia’s carrying capacity, and the implications for resource use, relying on an adequate database drawn from the cadastre, distinguishing population policy (inevitably long term) from immigration practice (decisions made year by year).

People are living much longer and with a shorter working lifetime. There are 2.3 million Australians who are retired but remain fit and capable — a significantly underused resource. A Knowledge Nation will recognise the significance of the ‘Third Age’, a growing demographic category and one that made such a major contribution, as volunteers, to the success of the Sydney Olympics.

Time budgeting and self-management of time will be central to lifelong education in a Knowledge Nation. Time is the medium in which we live: the only irreplaceable resource. Using it effectively involves setting priorities. Capacity to manage time is the major distinction between those who exercise power and those on whom it is imposed. This is a particularly significant matter for many young people who were marginalised by lack of formal education and find self-definition difficult.

Changing the culture: we have no option

Overcoming obstacles to become an effective Knowledge Nation will require leadership from government, dedication from our institutions and effort from the whole community.

It will require changing the culture. But we have no option. Time is running out.

After the Sydney 2000 Olympics, Bob Hawke pointed out how Australians had focused their efforts and co-ordinated their activities to make a success of the Games. It is a powerful illustration of what can be achieved with a national will. Even more significant was the role of the Australian Institute of Sport, which, with bipartisan support, was able to turn Bronze Medal achievers into Gold Medal winners. It took heavy investment, discipline and a strategy— and years of dedicated effort. The result was something that Australians understand and support.

Australia now faces a situation far more significant than the Olympic Games and we need to adopt a similar strategy. The challenges will be far greater, the competition far stronger, the investment cost far higher — and the penalties for failure more serious.

Significantly, the success of the Sydney Olympics did not lead to a period of basking in the euphoria of victory. Instead, it helped to focus attention and stimulate national debate on issues such as reconciliation and, unexpectedly, science. It illustrated the need for Australians to excel in things other than sport.

The central question for all radical or reformist parties ought to be: ‘Apart from the economic agenda, what are human beings capable of? Do we aim at the highest common factor or the lowest common denominator?’

Can we realise, as Abraham Lincoln so memorably put it, ‘The better angels of our nature?

The technological revolution and transformation to a Knowledge Nation must be seen as an enlargement of human capacity, not a replacement. Many of our traditional supporters may find the idea intimidating and it will be our task to explain and explain and explain.

We must not confuse data with information, information with knowledge, knowledge with wisdom.

A Knowledge Nation will break down barriers. It will be inclusive, closing the disturbing gaps between the cities and the bush and between elitist and populist opinion with courage — arguing for a fresh vision of life, an updating of Ben Chifley’s ‘light on the hill’ for the twenty-first century.