Now deceased American comedian and actor Robin Williams used to tell a story of being interviewed on a German talk show.  As a guest, Williams was asked why people aren’t funny in Germany?  In reply Williams said, “Did you ever think that you killed all the funny people”. 

A similar response can be offered to the question of why Australia has so little innovation and why small business is in decline.  Did you ever think that Australian governments killed all the innovative businesses?

Every now and then, the Growth Lab at Harvard University prepares the Atlas of Economic Complexity.  The Growth Lab  says their analysis rankings “assess the current state of a country’s productive knowledge, through the Economic Complexity Index (ECI). Countries improve their ECI by increasing the number and complexity of the products they successfully export.

So, what was Australia’s Economic Complexity ranking in 2021?  It was 93rd; bookended between Pakistan at 92 and Uganda at 94.  Even New Zealand came in at 52.  Ten years ago, Australia was ranked 81st. So a ten-spot decline.

Why is this so?  Well, in large part because Australia has become the quarry of the world, exporting lots of unprocessed resources.  Over 56 percent of Australia’s exports in 2021 were of four commodities – iron ore, coal, natural gas, and gold.  Approximately 22 percent was from the export of coal and gas.

Consider some recent market interventions, putting aside the daily assaults on super profits and evil business.  Things like actual price caps on coal and gas.  Threats of rental price caps.  Threats of increases to capital gains taxes.

Every time this complexity study report comes out, it provides a platform for members of the central planning industrial complex to argue for more government money and intervention in markets.  Here are a few samples from a quick internet search:

  • Ed Husic, Minister for Industry and Science, said in August of this year that “Australia’s narrowing industrial base shows the economy can’t be left solely to market forces”.

  • Someone, unnamed, from the University of Sydney said in 2021 that “If (infrastructure) investment of this scale was redirected towards the promotion of advanced manufacturing, enormous possibilities would lie ahead.”

  • Kieran Parker from the Australian Centre for Robotics said in April 2023 that “We believe a comprehensive national investment in robotics research, development and translation, structured in a manner that supports industry adoption would likely have the highest return on investment (ROI) of any such science industry related initiative.”

Could it be, just maybe, that Australia’s low complexity is a consequence of government policy?  Of high taxes, excessive regulation, and incessant market interventions?

Consider some recent market interventions, putting aside the daily assaults on super profits and evil business.  Things like actual price caps on coal and gas.  Threats of rental price caps.  Threats of increases to capital gains taxes.  What about the market design mantra of Treasury Jim Chalmers in his 6,000-word Capitalism After the Crisis essay where he wrote earlier this year that “with coordination and co-investment – recognising that government, business, philanthropic and investor interests and objectives are increasingly aligned and intertwined.”

And of course the recent words of Assistant Treasurer Stephen Jones, who said about the Qantas protection racket that “instead of having two carriers we will design our markets in a way which will make it unsustainable for the existing Australian-based carrier.”

Stephen Jones

Why would anyone in their right mind risk their time and capital to develop a sophisticated and complex business in Australia when all that would happen would be more taxes and regulations?.

Another term for market design is central planning.  And another title for the central planners is commissars.  And we have seen the results: in the Soviet Union, in Cuba, in East Germany, in North Korea. 

So next time you hear some one asking why Australia has low innovation, low business creation, low entrepreneurship, low economic complexity, you might suggest, as Robin William’s did, that maybe it’s because it’s government policy.

Thank you for your support. To help us in our battle to protect liberty and freedom please click here


  1. Dimitri. You are 100% right. 35 years ago I landed South Australia under the business migration program from Hong Kong, and, as a life-long exporter at that time, I visited Austrade a few times, I noticed the business environment and culture in South Australia and Australian are not the same as in Europe and America. Government encouragement of entrepreneurship and subsidies to innovations are very small. Australia made less than New Zealand government’s offer to businesses. 35 years today, Australian government has made little change. . Those smart and innovative Australians have to move overseas in order to fly high and become successful.


Please enter your comment!
Please enter your name here