We’ve heard of ‘Minimum Viable Capability’, but what about a ‘Minimum Viable Industrial Base’?

Over the last three to four decades, Australia’s industrial base has been effectively hollowed out, with the collapse and final closure of Australia’s auto-manufacturing industry in 2017 serving as the most visceral and visible evidence of the nation’s decline and demise as an industrialised nation.

While we do retain a relatively small manufacturing industrial base, with a smattering of hubs scattered across the nation, the once proud history as a manufacturing and industrialised nation has, for all intents and purposes, become little more than a mine, farm and services hub for the world’s fastest-growing economies and powers.

This has seen the nation plunge in the global rankings of “sophisticated” and “complex” economies now falling to 93rd in the world (behind well-known industrial powerhouses like Uganda, Kazakhstan, Trinidad and Tobago and Bosnia and Herzegovina), according to the Harvard Growth Lab’s Country Rankings Country & Product Complexity.

This period of deindustrialisation was driven in large part by the waves of globalisation that began in the late 1970s and then rapidly accelerated during the 1980s and into the 1990s, on the back of the “End of History” thinking championed by US academic Francis Fukuyama, which gradually gave rise to the “knowledge economy”.

Against this backdrop, the “developing world”, spearheaded by rising powers like Deng Xiaoping’s reinvigorated People’s Republic of China, alongside the other “Asian tigers”, embraced the economic opportunities, while domestic consumers across the “developed world” embraced cheaper products and a rapid acceleration of our standards of living.

By now, it is well known that Australia’s economy is a shadow of its former self, with much of the nation’s traditional industrial base now skating along on a subsistence level as the nation rapidly slides towards banana republic territory, as predicted by former Singaporean statesman Lee Kuan Yew in the 1980s.

Now, yes, I hear those voices in the back shouting that Australia has turned a page through initiatives like the Albanese government’s signature “A future made in Australia” policy and mechanisms like the AU$15 billion National Reconstruction Fund (NRF) along with the Defence Industry Development Strategy (DIDS), respectively.

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These policies are just the latest incarnation of previous attempts to build or perhaps rebuild the nation’s industrial base and

Bringing me in a roundabout way to the government’s desire to deliver “Minimum Viable Capability” to the Australian Defence Force as a mechanism for delivering capability to the warfighter rapidly, or as Defence Industry and Capability Delivery Minister Pat Conroy explained, “minimum viable capability we will be more looking at accepting platforms into service at 80 or 85 per cent and then using an iterative upgrade process to get to 100 per cent”.

In turn, this concept of “Minimum Viable Capability” brings me to a concept of “Minimum Viable Industrial Base” and what that looks like for Australia as both the nation and the world speed towards an increasingly unpredictable and volatile future requiring greater industrial capacity, sovereignty and capability.

What makes a Minimum Viable Industrial Base?

Successive Australian governments over the past decade, in particular, have placed increasing emphasis on building national resilience and security through various policy mechanisms, and despite this, now becomes the time to ask what constitutes a “Minimum Viable Industrial Base” for Australia moving forward.

Also, I will ask you to keep in mind the idea of a “Minimum Viable Industrial Base” is an idea that I conceptualised literally yesterday, and I have had little time to properly flesh out, but I strongly believe the idea would benefit from broader input.

At the basis of the idea, from here, I will refer to as MVIB requires a strong foundation, lest we fulfil the prophetic warning of a house built on a foundation of sand; keeping the house metaphor, I will use the various components.

At the core of this foundation are two fundamental inputs to the capability to steal the government parlance: energy and workforce, for without these two factors, any MVIB would fail to take off.

This requires the development of a competitive, ambitious, educated and motivated workforce that is invested in the future of the nation. Equally, it requires access to affordable, resilient, abundant and critically stable energy on a scale previously unseen in Australia.

This brings us to the secondary factors; the next level up that serves as the “slab” of the MVIB house, that is, the areas of Australia’s natural, not comparative advantage, that is, resources, agricultural goods, energy and services.

Affordable, abundant, reliable and stable energy opens up a host of opportunities for Australia to expand up and through the “value-add” chain across the resources, agricultural and energy sectors, from basic refining through to the high-end steel, battery, magnet and rare-earth processing that can and should be done in country.

Energy also provides avenues to open up and expand Australia’s agricultural output and expand further into the “value-add” chain while providing the ability for Australia to expand our agricultural bread baskets (through expanded critical infrastructure investment) in NSW, Victoria, Queensland, and Western Australia and our niche production hubs across the remainder of the country.

Bringing us to the “walls” of our MVIB “house” through next-generation industries like advanced and additive manufacturing, artificial intelligence, quantum computing, biotechnology and a host of other sectors, all of which require a robust, competitive and highly skilled workforce and again, abundant, reliable and stable energy.

Finally, bringing us to the “roof” of the MVIB, and this is the “boring” part of the equation, that being the regulatory environment and tax policy that serve as restrictive and constrictive hand breaks on the prosperity, stability and security of the nation.

By getting the regulatory and tax frameworks “right”, we build on our immense natural advantages and the strengths of our “foundation”, “slab”, and “walls” to build a house that is truly disaster-proof, but flexible enough to weather any economic, political and strategic storm that may come our way.

This “house” then serves to provide generations of young Australians and those across the world and Indo-Pacific, in particular, the opportunity to build their life into the “home” they want and become the masters of their own destiny and, by extension, empower Australia to become the master of its own.

As I said previously, this is a first pass of what constitutes an MVIB, so please, let me know in the comments below what you think needs to be added and how we can expand on the concept of an MVIB to build a truly secure, prosperous, resilient and competitive nation.

Final thoughts

Without sounding like a broken record, it is important to both understand and accept that Australians are going to be asked to confront and accept a number of uncomfortable realities in the coming years.

First and foremost, Australians will have to accept that while the world is increasingly becoming “multipolar”, the Indo-Pacific, in particular, is rapidly becoming the most hotly contested region in the world, and this will fundamentally reshape the position, role and security of the nation.

This period of multipolarity competition has been underpinned by the emerging economic, political, and strategic might of powers like China, India, Pakistan, Thailand, Vietnam, and the established and re-emerging capability of both South Korea and Japan, in particular, are serving to create a hotbed of competition on our doorstep.

Second, both the Australian public and our policymakers will have to accept that without a period of considered effort, investment and reform, or as I like to colloquially refer to it, our “Rocky montage” moment, current and future generations of Australians will be increasingly impoverished, living in a nation pushed around by the region’s now rising powers.

Recognising this array of challenges and opportunities, both the Australian public and its policymakers need to look beyond the myopic lens of short-termism that has traditionally dominated our diplomatic, strategic, and economic policy making since Federation.

Again, as I have said multiple times before, we need to see Australia begin to play the long game to fully capitalise on the opportunities that are transforming the Indo-Pacific.

The most important question now becomes, when will we see a more detailed analysis and response to the challenges and opportunities facing Australia, and when will we see both a narrative and strategy that better helps industry and the Australian public understand the challenges faced and opportunities we have presented before us?

As events continue to unfold throughout the region and China continues to throw its economic, political, and strategic weight around, can Australia afford to remain a secondary power, or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..