Resource productivity: four ways Australia can keep the good times rolling

Good times for Australia kept rolling whilst prices and demand for our resources were high. But boom-time is on the wane, manufacturing is squeezed and it is time for a serious where-to-from-here conversation about the nation’s economy.

Sloppily, a focus on productivity slipped off the menu when upsizing and more-of-the-same seemed like the recipe for success. Today’s businesses operate with great uncertainty about the future. Governments and industry must now redouble efforts to plan for new modes of prosperity that improve productivity and decouple resource use from economic growth.

Opportunity knocks for doing more with less. Based on 2014 World Economic Forum estimates we calculate that Australia’s relative share of global economic opportunity derived from smarter use of materials, energy and water could be $26 billion each year by 2025. Recent research from ANU puts this figure even higher.

Australia is the largest material user per person in the Asia Pacific region; we use around 44 tonnes of resources per person each year, almost five times the regional average. So there is good reason to focus on using resources more wisely.

Already our primary trade partners in Europe, China and Japan are pursuing new opportunities to accelerate resource productivity in the circular economy. China’s current five year plan has an entire chapter devoted to implementing a circular economy. Australia needs to act now to ensure it is not left behind.

In a new report launched at the first World Resources Forum Asia-Pacific in Sydney, researchers from the UTS Institute for Sustainable Futures have identified four tangible circular economy opportunities for Australia:

1. Replenish stocks and rethink value

Australia needs to build a productive economy that renews and preserves our stocks of natural capital – things like access to air, water, and soil – rather than degrading them.

As a first step, we should establish a comprehensive system of national environmental accounts. The Australian Bureau of Statistics should also be funded to restart its program of tracking waste, a victim of recent cuts.

Industry needs to rethink the value of resources across multiple use cycles. By moving away from the “take-make-dispose” model and adopting the “take-make-recreate” approach of the circular economy, Australia can transition from being a global leader in primary resource production (like mining) to also being a leader in generating value through resource productivity like closed loop production and the use of idle assets.

2. Design for renewable energy and resource cycles

US$270 billion was invested in renewable energy worldwide last year, highlighting the scale of transition in global energy. Australia has a window of opportunity to lead the expansion of innovation in renewable energy to other sectors such as advanced manufacturing, mining, minerals processing and future transport.

For example, Australia can tap into our abundant solar resources to power energy-intensive mines and minerals processing. Bio-energy or solar thermal power can substitute for diesel generation at remote mining sites, future proofing our existing industries in a world that is outgrowing fossil-fuels. Cheaper renewable energy can also improve viability of the processes of recycling and remanufacturing (making new products from old components).

Encouragingly, energy productivity already features in the 2015 Energy White Paper, the government’s chief energy policy document. Yet many businesses spend more on materials than on energy, so increasing both resource and energy productivity is a double gain.

3. Harness new technology for new modes of production and consumption

New materials and digital technologies, advanced and additive manufacturing, and open innovation are transforming conventional business practices.

For example, 3D-printing and distributed manufacturing could enable the timely replacement of non-durable parts to extend the lifetime of products.

New business models and technologies can change not just the design, production and recycling of products, but the way we think about consumption. The ubiquity of mobile and internet technology is allowing consumers to share products and services – for example, AirBnB and Uber, which are already household names. Using technology to allow access to a product (rather than ownership) can encourage us to use what we need, instead of buying what we don’t.

4. Turn know-how into new networks and markets

Australian industry can seize these opportunities by aligning our vast base of knowledge, skills and technological know-how to provide a competitive advantage for capturing new markets and growing strategic networks.

As a leading provider of advanced services to mining (more than half the software used globally for mining operations was developed here), Australia could apply its knowledge and technologies to new markets in waste and unconventional resources.

Above-ground mining of waste streams represents a new value opportunity. Solving the global problem of e-waste – with a material value of more than A$70 billion globally – would be a lucrative start.

Adapting to a new era of resource productivity requires new collaborations between traditional sectors. By bringing together business, research, technology and policy we can deliver the skills, products and services needed to sustain prosperity at home and in our region.

Nick Florin is Deputy Leader of the Wealth from Waste Cluster which is a collaborative research program led by UTS with CSIRO, UQ, SUT, Monash and Yale. This research program is a part of the Mineral Resources Flagship and supported by the Manufacturing Flagship. He gratefully acknowledge the funding support from the CSIRO Flagship Collaboration Fund.

Damien Giurco receives funding from the Australian Research Council Linkage Scheme, CSIRO Flagship Collaboration Fund for the Mineral Futures and Wealth from Waste Clusters, Telstra, NRMA, NCEDA, Department of Environment, the International Union of Geological Sciences via the Resourcing Future Generations Initiative. He was co-chair of the World Resources Forum Asia-Pacific and serves on the committee of the Australasian Institute of Mining and Metallurgy's Community and Environment Society. Damien works at the Institute for Sustainable Futures, UTS.

The authors are part of the Wealth from Waste Cluster which is a collaborative research program led by UTS with CSIRO, UQ, SUT, Monash and Yale. This research program is a part of the Mineral Resources Flagship and supported by the Manufacturing Flagship. The authors gratefully acknowledge support from the CSIRO Flagship Collaboration Fund.