In the pantheon of big ideas, few have had a bigger impact on everyday human life than Thomas Edison’s light bulb.
Along with a flurry of inventions in the 19th and 20th centuries – like the combustion engine, powered flight, refrigeration, and the production line – Edison’s cheap, affordable artificial light source turned night into day, totally revolutionising the way we live and work.
The result was an historically unprecedented explosion in prosperity.
The reason behind that explosion in shared wealth also happens to be every economist’s favourite party conversation starter: productivity.
Electric light meant more people could spend more time doing productive things, creating more wealth to go around.
Big ideas have been the key to the massive productivity gains – and improvements in living standards – of the past two centuries.
But big ideas don’t roll off a production line, so we can’t just sit around waiting for the next one to drop.
Some economists, like Robert Gordon in the USA, have argued that the revolutionary innovations of the 19th and 20th centuries, and the benefits they created, won’t be repeated anytime soon.
And while the tech revolution of the late 20th century gave us unprecedented computing power and the internet, the improvements in productivity and living standards delivered so far haven’t been anywhere near on the scale of the benefits created by those earlier transformative ideas.
Especially since the Global Financial Crisis in the late “noughties”, productivity gains around the world have been sluggish, and wages have grown far more slowly than we had become accustomed to.
The productivity grind is evident here in NSW too, with our state’s productivity growth – along with investment in productivity-enhancing capital – lagging over the past decade compared to the rest of Australia.
Even with a large share of highly productive industries like financial services and IT, NSW productivity remains below the national average.
In other major NSW industries, like health and professional services, productivity growth has been all but flat.
As the Commonwealth Productivity Commission has said, unless we do something, “mediocrity beckons.”
Well mediocrity is not what our Government is about.
We are here to make NSW the best place anywhere in the world to live, work, run a business and raise a family.
If we are going to keep lifting living standards, tackling productivity is non-negotiable.
Up until now, productivity policy has been dominated by the Commonwealth, with reviews and recommendations piling up over time.
But as the Commonwealth Productivity Commission said in its most recent review, “if anyone level of government has greatest responsibility … it is the States and Territories.”
That’s why our Government is tackling the productivity challenge like never before.
Earlier this year, we announced the first ever NSW Productivity Commission, based on the recommendations from former Premier Nick Greiner’s review of the NSW regulatory framework.
More than just an academic, advisory body, the NSW Commission will pursue practical reform, sitting within Treasury where it will be able to drive a coordinated productivity agenda across the whole of government, focusing on four themes: making it easier to do business; lowering the cost of living; making housing more affordable; and making NSW the easiest place in Australia to move to.
Today we have appointed Peter Achterstraat AM to lead this initiative as the state’s first Productivity Commissioner.
Peter’s breadth of experience in the public and private sectors put him in excellent stead. Having served for 7 years as NSW Auditor General, he knows the workings of Government inside out.
That’s important, because when it comes to lifting productivity, we know that government is part of the problem, and a critical part of the solution is to get the Government’s approach to regulation right.
That means removing barriers to productivity and prosperity that have built up over time, and making sure NSW is best placed to make the most the productivity-enhancing, light bulb moments of the future.
I look forward to working with Peter to develop the Commission’s initial program of work, and the public will also be able to contribute reform ideas via the Commission’s new online portal, at www.productivity.nsw.gov.au.
Ultimately, I have faith that there are more big ideas to come. After all, who knows what’s around the corner, or what unforeseen benefits might arise from the recent tech boom?
What I do know is that our Government will not just wait and hope.
Starting with the NSW Productivity Commission, we will do everything we can to unleash the power of productivity in NSW, to keep improving the lives of everyone who calls our spectacular state home.