Address to the Australian Retailers Association Leaders' Forum
ED HUSIC, MINISTER FOR INDUSTRY AND SCIENCE: Morning everyone. Thanks Paul. I want to start by acknowledging the traditional owners and pay respects to elders past and present. And obviously Paul Zahra and to Nicole Sheffield as well, thanks for the opportunity to speak today.
I know my title might make you think, "Well what's an Industry Minister doing here?" Or, "Is it that there's an Industry Minister that's got to be responsible for all industries?" I was particularly keen to do this, Paul, because I have thought for a long time about the issue of digital technology and the way it will make the whole country work a whole lot better.
But I've also been very respectful of a number of things. One, I don't think people respect enough the role of retail. And you probably think, "Well he would say that, wouldn't he? He's at an ARA function, he would say that". But for a lot of the things that people depend upon, you deliver and so from my point of view I do very much recognise the pressures that are put on your industry, and given the number of people that you employ in different parts of the country - city, rural, regional - I think one of that.
And two, for many years as a parliamentarian when I've been thinking about digital transformation, I've also very much understood what that has meant for you as a sector. Because for many of you and in many instances the retail model has been about bricks and mortar, whereas digital transformation has been about offering up a different way to get goods, products to people that would cut you out.
The other thing has been too, an expectation that everything would just switch to the online world, when the reality is omni‑channelling and being able to have a combination of bricks and mortar plus a digital offering, this has been really, and particularly in terms of your sector, it has been the way to get that balance right. Because I don't think it will all be a switch to one thing as opposed to another.
What that has meant for you and the reason why I'm here today is because I think about the impact of digital across the broader economy, and as I said in terms of yourselves, and what do we need to do to prepare for it? Not just in terms of being a lot more efficient about how we embrace digital transformation, but thinking through the consequences and impacts of that too. Because obviously with retail being such a huge employer, you switch to one thing where you're offering product purely online, there'll be a person involved in sales or the support and the infrastructure around that that could potentially have an impact.
So getting the balance right and particularly government's thinking about this is really important. And how that translates, for example, we're talking about having 1.2 million Australians employed in tech related jobs by 2030. Not because it's an easy metric to shoot for, it's not. It's going to be hard. But because for a lot of what you want to do in your area where you haven't necessarily thought about the realm of data or data analytics, digital transformation, how you use an app to be able to attract and retain customers and loyalty and support your brands. That takes a lot of work, a lot of talent behind the scenes to make that a reality.
What I'm keen to see as an Industry Minister is that level of skill not just focused in the tech sector but to have that skill available across different sectors, including yours.
I know you're thinking deeply about this. I know you're thinking about the two things I think that were seismic with respect to retail, and to many other businesses. We often go to the pandemic and what that did to speed up digital transformation, and particularly in terms of ensuring that you have people employed and that your companies could still continue to operate through periods of lockdown.
But the other thing that people don't realise, the big thing that transformed the offering, and especially as it was available to retail, is the advent and the greater adoption of Cloud and the fact that, you know, when Steve Jobs stood up in 2007 and said we'd use our phone in many different ways, people questioning, "Why do you need a camera on a phone?", which is kind of like saying, "Why do I need the Internet when I fax?"
But the reality is that evolution that occurred, the way in which new technology was embraced, the fact that you had Cloud, you had apps, you had people thinking of new ways of reaching people, I think that was the big point at which too for a lot of small and medium enterprises, the resistance to digital transformation by those who didn't want to have to put in hardware in their business, they didn't want to worry about the software, they didn't want to worry about cyber, for them, now, being able to have a lot of this done via the Cloud that they could access cheaply via subscription and they didn't have to worry about all that technical stuff, and I hate using the bunny fingers this early in the morning but all the technical stuff, this has provided a platform of further change as well.
So having the human capital, having that 1.2 million of skilled up people in tech within our economy and deploying them in different sectors and transforming the way businesses operate, giving them a much bigger pathway or longer pathway for growth and operating, this in my mind is the thing that we need to encourage, not obviously ‑ I mean you have already recognised and valued this, but there are a lot of other sectors and a lot of other businesses that don't think as deeply about these issues as yours. But we need to be able to show how retail in particular, with the pressures that this has put on your operation, how you have evolved and how you can be a case study in many respects for others about how the inner section of innovation, digital transformation and your own transformation sector, is very important.
As I said, a lot of you are thinking about it. I noted David Jones CEO Scott Fyfe in the Fin Review last year talking about the importance of data capture and analytics to the business. Spoke about being more than what a store is offering to the customer and what it offers to the wider community. So the use of data, thinking outside the square, all very important examples of innovation, and businesses being flexible to be able to adapt quickly to that, really important.
As I said, retail being a strong innovator and I respect the fact that the sector has been a strong innovator in the use of tech and data to improve customer satisfaction, driving down costs. Really a crucial element to longer term success, some in which are adopting virtual and augmented reality, though I still think virtual reality's got a bit to go because everyone ‑ well if virtual reality was going to be as big as what it was, we'd still be wearing Google glass and that's an itchy thing for them, but it isn't around any more and part of it is because of the complexity or the way in which there's a resistance or friction point in using it.
Purchasing data to understand consumer patterns and behaviour; AI and big data enabling analysis of consumer spending behaviour; software for inventory management. And again, seeing some of the stuff, particularly in the States when I visited quite a lot, seeing places or firms that you'd be familiar with now but back in 2014 when I saw them in San Francisco, with Square suggesting that they could put into it what we once had as a headphone jack, being able to have that module in there to allow for smaller businesses to swipe a credit card and have that sit in their systems on the Cloud, to be able to manage inventory and potentially determine how working capital could be extended to them.
It's now in many instances being embraced by platforms like MYOB and Xero, but again this whole thing around Cloud‑based software as a service and thinking through about how to change the back end of your operations - really, really important.
From our point of view, I've said as a new government we're thinking about the human capital side. The 1.2 million that we reckon could be deployed in terms of tech-related work and the way that it makes your operations more efficient means there needs to be a lot of investment in people. So, for instance, we're opening up 465,000 TAFE fee-free places to try and encourage people to get in and meet the skills requirements that you need.
The other thing I've been very conscious of too in the broader economy, and I've spoken up as an Industry Minister, is bringing people in. So we train local, we train our own, but for the business that is are under the pump and can't find people, having more people come into the economy through a skilled migration pathway that actually works for the nation. That is, it's not just about bringing in effectively guest workers, these are people that will build the country longer-term. And for anyone who is a kid of migrants, you'll get that straight away like I do, having parents that have been able to set up here, make a contribution to the economy and make a longer term commitment to the country is really important.
So we've been reforming the skilled migration pathway to make sure we've got more people in the economy. Because ultimately too you're competing to get talent, and the harder it is for the broader economy to get the skills in to meet its needs means that effectively parts of the economy are cannibalising each other for the available labour, or whatever is available, to be put to work. So we needed to address that as well.
And longer term our other thing that I'm really pushing for is the establishment of National Reconstruction Fund, 15 billion in capital to help in priority areas, grow the sector, grow the economy and give us a long‑term pathway, not just for opportunity but for jobs and building the health of the wider economy.
And again, if that economy is not healthy and working as it should, you feel that. You're at the front line of feeling that when discretionary spending decisions are being made, and I very much respect the impact of that on you.
What I did want to say is, again, thinking a lot around the way in which technology and digital, and particularly yourselves as being able to demonstrate that when you apply your minds to it, you think through the impacts, you think through the consequences of that and you can see a longer term future is really important.
And so, as I said, I was very keen to make sure I was here today. I'm very grateful for the chance to speak. But importantly, I am very grateful to you all for what you do in improving the quality of people's lives. People do value a lot about what you're doing and we want to make sure you keep doing more of it and at a greater scale.
So thanks again for your time.