Pericles,

In other words, I am asking what countries have been the most innovative, did government help them, and did the host country hold on to most of the production?

I think of Nokia, Apple, and so on, but wonder where they are all made.

I know more is made from the sale of the US rather than where it is produced, but how many purchases are bought on debt, and how much employment is created from the industry in the country that came up with the idea.

I don't know the answers, but would like to find out.

Chris Lewis,

There is an organization called Ausinnovation that regularly carries out surveys regards innovation in Australia.

http://www.ausinnovation.org/

It repeatedly finds that “user feedback” provides the greatest boost for development of a product.

EG. If the user wants the product cheaper, lighter, stronger and in the colour blue, then this provides the impetus for the manufacturer to make the product cheaper, lighter, stronger and in the colour blue.

Without user feedback, then the manufacturer doesn’t know what to do to make the product more competitive in the market place.

It also finds that government programs or aid packages don’t really help that much, because the manufacturer is still not getting any feedback, which is the most important thing.

Sounds logical enough, but the greatest problem now in this country as I see it is inertia, and the mentality that import is always best.

This is most clearly seen with government departments and education systems, that import nearly everything. They have no interest in spending taxpayer money on local products, and automatically buy imported goods on just about every occasion.

Percilles has suggested sacking, but that simply puts these people into the dole queue and everyone has to pay to retrain them and get them back into the workforce.

I would suggest instead using them to stimulate innovation. Government employees and members of the education system have to be forced to buy local products AND TO SUPPLY FEEDBACK to the manufacturer. This stimulates local innovation.

Failure to do this, and government departments and schools and universities should simply have their taxpayer funding reduced.

If members of government departments and members of the education system continue to import and provide no feedback even with reduced funding, then the sackings take place.

Thanks vanna,

more food for thought.

I am constantly weighing up the pros and cons of freer trade, and I am finding it very hard to know what is right or wrong.

I am now working on an article where i want to discuss freer trade in terms of success and failure from an Australian perspective, but one which covers a number of policy domains.

My gut feeling, however, is that Western countries will again shift the balance between production and consumption which means inevitably that something will have to be done about imports.

When I finish the article, in time, i will put forward a short piece on OLO where I can test my thoughts with you, pericles and others.

Chris Lewis,
Australia desperately needs to be thinking about the bigger picture, and articles such as yours are very necessary.

I would think that free trade has to be combined with a number of other initiatives. Reduction in tariffs has to be combined with stimulating local manufacture.

It is easy for governments to take off tariffs, but a little more difficult to stimulate local manufacture.

So our governments have taken off tarrifs, and taxpayer money now goes to governments, it then goes to government departments and education systems, and then the money goes straight offshore.

Local manufacturing has actually declined with free trade and reduction of tarrifs, because there weren’t other initiatives put into place to stimulate local manufacture.

*And find a way to help Banks lend to start-ups, where mortgaging the family home isn't a prerequisite.*

The problem with that Pericles, is that a banks role is to minimise
risk, not maximise it. If somebody does not believe in their own
idea enough to mortgage the house, is it really such a great idea?

The American solve it with venture capital, which is a big industry
in the US. Google, Facebook, Twitter, you name it, all started
by university students backed by venture capital.

I am not sure how the American tax office treats venture capital,
but the fact that the wealthy are so eager to invest in new ideas
in the US, suggests to me that there would be benefical tax
aspects, wether the idea succeeds or fails.

So my first suggestion would be to examine the US venture capital
industry, to understand why their wealthy are so keen to back
new ventures, unlike our own. What are the tax implications
in each country, as they surely play a role in all this

Yabby,
I think you will find that there are a very large number of start up companies in the US that fail.

If the ratio of start up companies that fail/ start up companies that succeed is too great, then the banks and eventually the economy fail.

The US also heavily subsides its agricultural industries.

The trick is to reduce tarrifs while stimulating local manufacturing AT THE SAME TIME, which is what our governments have not done.

There will never be much gains at all in this country if taxpayer funding continuously goes offshore, by handing it over to government departments and schools and universities who spend the lot on imports, which is sending the money offshore.

That has been occurring for decades, it has not stimulated innovation or local manufacturing, and now we are totally dependant on what we can dig out of the ground, and without value adding.