I can see how this would ensure domestic success, but how does that translate to 'top global firm' status unless the products / features & pricing are significantly superior?
At least in hardware/manufacturing, both South Korea and China have done this with great success thus far.
Yes, I get that. It's basic tariff protectionism. Many countries have done, and continue to, do this.
Here in Australia we've done it for decades, but with no global success.
> The hope then is that in the future ...
I hope that isn't the official strategy. ; |
The stronger financial footing (also achievable via vanilla domestic success sans tarrifs) doesn't necessarily guarantee global success, especially if other nation states are adopting similar fiscal & trade policies ... which it's fair to say they are.
Examples? We have some of the most open markets in the world. We’re one of the only countries the US has a trade surplus with...
There are major Australian companies out there; the Atlassians, BHPs and CSL's of the world. They aren't Samsung by any stretch.
Our management and government are incredibly risk-averse and we follow trends and popular management theories instead of creating them.
I think this is called "dutch disease" by economists: the high wages paid by the dirt-digging (early on) mean that you can't simultaneously be competitive in metal-bashing, which makes it hard to develop other industries.
However, our tariffs were more about protecting jobs than protecting and developing industries. Australia has always been a "taker" when it comes to investment and we are shite at developing our own industries that aren't purely primary (ie extractive like mining or agricultural).
We have some companies today that are global but have nothing to do with tariffs. Atlassian in software, some mining related engineering and services companies.
There are others like CSL which was spun out of government, Brambles/CHEP that again, was spun out of government (CHEP stood for Commonwealth Handling Equipment Pool in WW2).
But our governments are terrible at promoting secondary industry or supporting them. Our R&D grants are complicated and are focused on compliance, not on results.
Australia is the "lucky country" but the full quote is:
"Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise."
I guess the obvious example would be the car industry - mostly cars were just assembled in Australia in the most recent past, but previously there were some designed and built. Tariffs were applied to protect that industry (nominally the jobs associated with same) but despite the Australian car assembly sector basically being zero now, the tariffs still exist. It's almost like it's just a revenue generation scheme.
There's a long history of tariffs and duties within Australia [1] but none of those (to my knowledge) resulted in a thriving multi-national corporation (I'll exclude mining companies as they're primary industries, reliant on the lottery of resource availability rather than any particular commercial skill).
Perhaps Murdoch's News Limited, which undoubtedly obtained government support during its nascent era, but I'm not sure how comparable it is to the Samsung and Hyundais of the world (referring back to GP's claims).
[1] https://en.wikipedia.org/wiki/History_of_tariffs_in_Australi...
At least in Korea. In less successful countries, domestic top dogs were simply protected, and were quite happy to keep making cars from the '50s.
An excellent book on this story is "How Asia Works" by Joe Studwell. (On which I'd be interested to hear any opinions from actual Koreans.)
And thank you - I've added How Asia Works to my reading stack.