The prosperity that Australia enjoys today will be challenged in the next decade. Disruptive technology will create fewer but bigger winners and more losers. Business has to increase its risk appetite, discover new ideas, pursue more radical strategies, and take bigger steps. In the face of adversity, Australia must respond.

1. Australia:
Taking Bigger Steps

2. Are Australia’s best days over?
Or ahead of us?
Australia may be the
envy of the world, but
the country needs to
do more to prepare for
the imminent wave of
technology disruptions.
Australia: Taking Bigger Steps

3. Australia: Taking Bigger Steps
GeopoliticalcohesionHighLow
Low HighEconomic growth
Regional
trade
agreements
Commonisation
Addressing climate change
Rise of knowledge economy
Automation and 3D printing
Growth in sharing economy
Globalisation 3.0
Increased prosperity
Dramatic improvements in ICT
Low commodity prices
Polarisation
Rising
inequality
Islandisation
Persistent
macroeconomic
uncertainty
Heightened nationalism
and protectionism
Return of geopolitics
Four economic scenarios could play out on the
world stage
Note: ICT is information and communication technologies.
Source: "From Globalization to Islandization," Global Business Policy Council Perspective, January 2016

4. Australia: Taking Bigger Steps
Which scenario is most likely to unfold?
Trade flow
Capital flow
Globalisation 3.0
Economic
growth
Unemployment
Inequality
Low
Moderate
High
High
High
International
migration
High
Regulatory
convergence
High
Polarisation
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Islandisation
Moderate
High
Low
Low
Low
Low
Low
Commonisation
Low
Low
Moderate
Low
Low
Low
Low
Source: "From Globalization to Islandization," Global Business Policy Council Perspective, January 2016

5. Since 2014, increasing evidence
points to “Islandisation” as the
most likely scenario for Australia:
• Global trade is falling and protectionism is rising
• Many traditional fiscal and monetary policy instruments
are no longer relevant
• Fringe and populist political movements are on the rise
• Geopolitics has returned
• The international system
is under serious strain
Australia: Taking Bigger Steps

6. The lucky country
Australia ranks second after
Switzerland on The Economist’s
where-to-be-born index,
offering the best future
to its newly born citizens.
Can Australia maintain
this position?
Australia: Taking Bigger Steps

7. A formula for
sustained prosperity
Three areas stand out
as critical enablers for
Australian businesses:
• Productivity
• Innovation
• Globalisation
Australia: Taking Bigger Steps

8. Australia: Taking Bigger Steps
Australia’s position does not appear
strong enough to withstand the
centripetal force of Islandisation
Productivity
Singapore
Austria
Finland
Australia
Canada
Spain
Italy
11
12
13
14
15
16
17
Innovation
Canada
France
Australia
Norway
Japan
Belgium
Spain
15
16
17
18
19
20
21
Globalization
Norway
United Kindom
France
Australia
Italy
Poland
Malaysia
12
13
14
15
16
17
18
Source: A.T. Kearney analysis

9. Australia: Taking Bigger Steps
12 disruptive technologies will have profound
implications for Australia’s economic structure
Near term (now)1
Medium term (<5 years) Longer term (>5 years)
Mobile
technology and
applications
Cloud
technology and
applications
Data, applications,
and services stored,
secured, managed,
and accessible
remotely
Connected mobile
devices and
supported
applications
Internet
of Things
Renewable
energy
Systems that
generate electricity
from non-depleting
natural resources
Objects transferring
data to one another
Virtual reality 3D printing
Successive layers
of material formed
under computer
control to create
an object
Simulation of
physical presence
in a real or
imagined world
Blockchain
Mechanism of
storing ledgers
across a network
of connected
computers
Advanced
robotics
Machines with
enhanced senses,
dexterity, and
intelligence
Genomics
Reading and
writing the genome
of organisms,
including humans
Energy storage
Devices that capture
energy produced
at one time for use
at another
Autonomous
vehicles
Driverless or
self-directed
machines
Artificial
intelligence
Computer system
capable of
generating its
own insights
1 Timing of impact defined as when technologies have “crossed the chasm” from early adopter (technology enthusiasts) to the early majority (pragmatists),
Geoffrey A. Moore, Crossing the Chasm, HarperCollins, 1991
Source: A.T. Kearney analysis

10. Australia: Taking Bigger Steps
The industrial impact
It is not a question of if an industry will
be disrupted, but rather when it will be
disrupted, how many technologies will
affect it, and to what degree.

11. Australia: Taking Bigger Steps
No Australian industry is immune to technology disruption
HighImpact: Low
1
Others include construction, wholesale trade, transportation, real estate, and government
2
ABS Cat. No. 5206.0, table 37, Jun 2015
3
ABS Cat. No. 6291.0, table 04 (seasonably adjusted), Nov 2015
Source: A.T. Kearney analysis
Industry
Select disruptive
players
GDP
($Bn)2 Disruptionimpact
Mobiletech
InternetofThings
Cloudtechnology
Renewableenergy
Virtualreality
Blockchain
3Dprinting
Autonomousvehicles
Artificialintelligence
Energystorage
Advancedrobotics
Genomics
Number of
employees
(k)3
Medium term
Disruptors
Near term Longer term
Retail
Health
Manufacturing
Telco and tech
Utilities
Finance
Logistics
Education
Agriculture
Tourism
Others1
Total
Mining
Professional services
Kogan.com, Amazon.com
Scanadu
Stratasys
Tesla, Nest
PiggyBee, FedEx
Khan Academy
Komatsu
WhatsApp, Snapchat, Google
Bitcoin, Nest, Simple
The Climate Corporation
Xero
Airbnb
72
105
100
47
44
141
74
76
139
96
36
39
544
1,512
1,277
1,522
848
223
140
450
609
937
226
1,020
309
823
3,514
11,900
High
Med

12. Australia: Taking Bigger Steps
Defensive crouch
Lower risk, lower growth potential
• Double down on traditional core business
• Structurally insulate from imminent disruptions
• Limit or exit international investments
Global offensive
Higher risk, higher growth potential
• Focus and invest in R&D and innovation
• Take risks and embrace disruptions
• Pursue new international opportunities
2003 World Cup Final
The Wallabies pack down against England; Newspix
1991 World Cup
David Campese, Man of the Tournament; INPHO
What will Australia choose?
Defensive crouch or aggressive offence?
Source: A.T. Kearney analysis

13. Australia: Taking Bigger Steps
Productivity
Discrete, business
unit-led programs
Whole-of-company
mega transformation
Innovation
Australia-focused
innovation
Innovation
for the world
Growth and
globalisation
Smaller, low-risk bets,
proximal markets
Bigger, long-term
investments
Companies must rise to the challenge
and take bigger steps in three key areas
Source: A.T. Kearney analysis

14. Australia: Taking Bigger Steps
Carpe diem, Australia
In the face of future adversity, how will Australian
CEOs and boards respond?
“If we want to change, the change begins with us.”
”If not you, then who? If not now, then when?”

15. For more information about
Australia: Taking Bigger Steps,
please visit:
www.atkearney.com.au/strategy/
australia-taking-bigger-steps
Australia: Taking Bigger Steps