Andrew Leigh

E&OE TRANSCRIPT

RADIO INTERVIEW

2GB RADIO MONEY NEWS

MONDAY, 18 NOVEMBER 2019

Subjects: Innovation + Equality; technology and productivity; unions and innovation.

ROSS GREENWOOD: Well, the interesting subject of this is a new book that's come out and this is actually called ‘Innovation + Equality: How to Create a Future That is More Star Trek Than Terminator’. It's by Joshua Gans and also by Andrew Leigh, the Shadow Assistant Minister for Treasury and Charities, who comes on this program on a regular basis to talk about the economy. And he’s with me now. Andrew, many thanks for your time.  

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Always a pleasure to be with you, Ross.

GREENWOOD: Okay. Let's go through this book. It basically goes down on - intellectual property is one of the big things you look at here, about the way in which you create jobs and create value is by creating more intellectual property. And of course that means you're going to have intellectual property, well, either that is capable of being protected or is indeed able to be used for the greater good rather than necessarily being locked up. That's one of your arguments, isn't it?

LEIGH: Absolutely, Ross. Intellectual property laws are enormously important. We use in the book the example of forceps, that were kept secret for hundreds of years because there wasn't a patent system to protect them. We think tens of thousands of lives of mums and babies could have been saved if the inventors of forceps had been able to patent them in 1500, have a monopoly for 20 years and then everyone could begin producing them from 1520. But instead they had secrecy. That doesn't mean that we need the sorts of expansions that we've seen in intellectual property. So for example, Beyonce’s song Bootylicious that she co-wrote in 2001. If Beyonce lives to age 90, it'll be in copyright protection until the year 2141. That's probably as long as anyone needs in order to create the incentives to keep on writing great songs.

GREENWOOD: Is that right? So Beyonce actually has the rights to Bootylicious and therefore her heirs or indeed who she sells it to out to 2141? And of course what you've seen with say David Bowie in the past, when he sold the income stream effectively off his catalogue when he was alive and that made him you know some hundreds of millions of dollars during his life. So you know, this is the real financial manipulation - it can go on, because if you've got a patent over something for such a long period of time.

LEIGH: We argue that copyright protection shouldn't be extended any further. At the moment, it's the life of the author plus 70 years. And as with all of these things, you want to get the balance right. We want to create the incentives to innovate, but without locking up so many ideas that people can't do follow-on innovation-

GREENWOOD: Okay, bring it back one step for me, if that's okay. Bring it back from that point there, innovation, to the point about wages. Where is the correlation, where's the linkage between that and the wages that we pay or indeed about our competitiveness with wages here in Australia today?

LEIGH: Underlying wage growth is productivity gains, and productivity is at its core driven by investments in infrastructure, in human capital, and also technological progress. So technological progress is vital if we’re going to have wages increasing, but we need workers who are ready to do those jobs. That's going to mean in the future that we're going to want better trained teachers, a technical training system that allows people to do lifelong learning, perhaps through things like MOOCs. More people attending university and getting that kind of generalist training that makes them ready for a world in which the one certainty is that change will happen.

GREENWOOD: Okay. Here’s an interesting thing for you. Artificial intelligence over the next 20 and 30 years improving so radically, right now it's a question of not what jobs will be created, but what jobs right now are going to disappear. You mentioned teachers there. One on one teaching is one area that might disappear. I heard just the other day, accountants largely doing a lot of bookkeeping might very well disappear as they are with a lot of the new programs coming out. I mean, there's a range of different professions that could very well disappear. There are others that will emerge, but it's trying to pick the winners and losers out of this that might really determine as to whether you're going to have a job that can have a growing salary or whether you are resigned almost to a job which is really going to have fairly flat salaries over a long time.

LEIGH: You’ve hit the nail on the head, Ross. The difference between us and many other people who talk in this area is it Joshua Gans and I don't think we've got a perfect crystal ball. We think technology is inherently uncertain, and therefore it's important to ensure that workers have generalist skills. We might have thought that the spreadsheet would kill accountancy - in fact, it's reduced the number of narrow bookkeepers, but it's allowed accountants to do a whole lot more jobs that they didn't imagined before. So far driverless cars haven't taken away from the jobs of drivers. Indeed it's possible that truck drivers will continue even in the driverless world to drive the last section of the journey and to be there for loading and unloading. So jobs will change. The challenge is to make sure people are flexible and adaptable, and that we don't have institutions set up that make it hard for workers to switch jobs. Because when workers can't switch jobs, their potential wage gains go down.

GREENWOOD: I remember your prime minister at the time, Julia Gillard, really giving a landmark speech in which she talked about an aspiration for Australia to be a community of highly skilled workers that are also highly paid. I note then coming forward, maybe in the past eight years, that really what you've seen now when we look at the latest wages numbers come out that those with the lowest pay rise in Australia are I.T. workers and people working in the telecommunications industry. So I'm just wondering, a lot of people who banked really if you like their education and their careers on becoming highly skilled I.T. workers or telecoms workers might right now find themselves somewhat disappointed in their choices, simply because they didn't realise at the time that they were sort of driving themselves into or making choices into areas that ultimately became relatively lowly paid in relative terms.               

LEIGH: Australia’s been better at using overseas innovations than creating our own. Only 8 per cent of Australian firms say they produce innovations that are new to the world. That's lower than the figure was in 2013. We don't have very much university collaboration, and that includes in the telecommunications sector that you're talking about, Ross. So we do need to make sure Australia is powering ahead in terms of creating new inventions. We also need to make sure though that we've got the institutions that ensure those gains are fairly shared. One of the striking examples to me is that for the first half century after the Industrial Revolution, you saw the GDP growth and you saw the productivity gains. But you didn’t see the wage gains. So it was only when they put in place the institutions that ensured that workers would get their fair share that wages grew after the Industrial Revolution.

GREENWOOD: Okay. So I come back to you on that front. I come back to you on that front, because what role in unions- because to my mind at least anyway, unions tend to be representing workers that I see were pretty much of the 1970s or the 1980s, not necessarily the workers of the next 20 or 30 years. The relevance of unions inside this new world, the future world that you're looking at now, where do they live? Where do they sit?

LEIGH: They’ve got an important role. Unions have been struggling with this issue as institutions that, as you say, have traditionally organised most within the public service and manufacturing workers. But there's a recognition that we need a collective voice for Uber workers, for people who are doing deliveries for Deliveroo. And that the old notion that we have independent contractors or employees breaks down in a gig economy. So unions are adapting to that, but they’re much weaker force than they were in my childhood. Once there was a time when half the Australian workforce is in a union. Now it's about one in eight. And so in Australia, as in around the world, they're looking to find their new place in the innovation economy.

GREENWOOD: I tell you what, it's a really interesting subject and one that's worth a good conversation, like this one. The new book out, “Innovation + Equality: How to Create a Future That is More Star Trek Than Terminator”, by Joshua Gans and also by the Shadow Assistant Minister for Treasury and Charities Andrew Leigh. And you just wonder whether that might be a blueprint for the Labor Party trying to create a new future for itself as well. Andrew Leigh, I appreciate your time.

LEIGH: Thanks, Ross. Always a pleasure.

ENDS

Authorised by Paul Erickson, ALP, Canberra.