The Managing Director of one of Australian Business' successful member companies recently described Australia's efforts at industry policy as "a bathtub with all the taps running, but with the plug out"!

I believe this captures graphically Australia's lack of coherent policies to build our industrial capability and to integrate ourselves into global markets in a way that brings benefits back home to our people.

It's bad enough that we have this policy vacuum. But what's even worse is that vigorous and robust debate on these issues seems to be a "no-go" zone for the bulk of our politicians, commentators and analysts.

I am frankly weary of the sterile stereotyping and the glib sloganeering that substitutes for proper analysis, thorough investigation of alternative options and painstaking and deft policy making.

This is why I did not hesitate when asked to launch this book edited by Rodin Genoff and Roy Green on "Manufacturing Prosperity". Its strength is that it brings together some of Australia's leading manufacturers, economic forecasters, industry analysts and policy experts to explore some new horizons for Australia's industrial future.

You may not agree with the stances taken by some of these authors.

You might even consider some of their views to be clouded by their political philosophy or their industry self-interest.

You may want to suggest alternative priorities for action, both at the enterprise level and by governments, to those reached by the contributors to this book.

You may even wish to question the book's central message that Australia's future prosperity will heavily depend on manufacturing, even in a so-called post-industrial age.

But what is unassailable is that your starting point is a well-argued, informative collection of works where the authors have cogently substantiated their analyses and opinions.

So, we can engage in a decent debate from the platform provided by this new volume of essays on Australia's industry policy.

Be in no doubt that the industry policy debate in Australia is still timely.

It is true that we have witnessed considerable action on the industry policy front over the last few months:

• decisions on tariffs for the auto and TCF industries;
  
  
• the opening of discussions on tax reform;
  
  
• substantial reports and Government responses from Mortimer, Goldsworthy and Stocker on industry assistance, information technology and science respectively; and
  
  
• the December industry policy statement by the Prime Minister, Investing for Growth.
  
  Without a doubt, these represent progress.

Is it enough? Some argue yes, because they believe the policy fundamentals have been addressed. Some argue no, because their preferred solutions have not been fully implemented.

Let me suggest that whatever your view, Australia will be judged on the outcomes we achieve.

For instance, in ten years time, will we be able to show that we are growing more highly skilled, highly paid and productive jobs than low skilled, low wage ones?

Will we be able to say that there are fewer gaps in our production chains than there are today? That Australian industry is producing more of what it consumes, rather than sucking in record numbers of imports and failing to add value to our natural resources?

Will we be able to point to global centres of excellence anchored here in Australia for one or more of the high-growth, clever industries of the future - biotechnology, environmental management, IT and multimedia or others not yet heard of?

Will our trade structure be reversed, so that we will have a large and growing trade surplus in the more innovative, R&D-intensive industries, which are also the fastest growing areas of world trade and those carrying the most productivity benefits?

Will we be recognised for our success in integrating Australian firms into global markets by smart commercialisation of our breakthrough technologies which give us fair go on both risks and rewards?

It is on the answers to these questions that Australia's industry policy of the 1990's will be judged.

Fundamental economic and competitiveness choices still face Australia. These choices were set out clearly in the Australian Business Foundation's study, "The High Road or the Low Road".

We can compete on the basis of innovation, technology, high skills and quality. Or, we can continue down a road of poor skills, limited use of technologies and low wages - a race to the bottom with severe social, as well as economic, consequences.

The key to success seems to be how quick off the mark we are at developing novel and more powerful technologies, commercialising these, marketing new products and services and keeping ahead of the pack, to ensure we capture the greatest gains from innovation.

And yes, industry structure matters, what we make and what we trade matters.

Higher wages and profits come from technology-intensive industries that do not so much compete on price, but on know-how and cleverness.

The real challenge for Australia's industry policy is to work out how we can be better represented in these high growth, highly productive and high return sectors of economic activity.

And, like it or not, Government has a real role to play. It cannot walk away from action on industry policy. No decision in itself is a decision to vacate the driver's seat and let the vehicle go where it will. Not something that our competitors would ever contemplate.

I believe that Government's first action must be in the realm of vision, commitment and leadership. Australia must make up its mind that it wants to pursue a future that will take us further up the "food chain" of cleverness. We must ensure a coherent whole-of-government suite of policies that increase the production and net export of knowledge-intensive goods and services.

Australia's strategic industry policy is unlikely to take the form of big vision statements or forward plans. This does not seem to be our style, no matter what political party is in office.

But may be through a series of incremental actions, demonstration projects and "islands of change" in various portfolio areas and industry sectors we can achieve a strategic Australian industry policy de facto.

The book we are launching today gives us some hints about where these drivers of change might start:-

• programs supporting R&D, innovation and development capital;
  
  
• active, explicit government purchasing policies;
  
  
• investment in infrastructure to boost the pace of economic growth;
  
  
• actions to foster proper linkages between education, research, and training institutions and industry at all levels;
  
  
• support for vigorous but selective investment attraction, export and new market access programs.

But, the task is not one for governments alone - those of us in industry, in the labour movement, in education and in all sectors of the community at large must take the initiative too.

What happens in the boardroom, in the office, on the factory floor, in the schools and in community interest groups can make a difference.

From industry's perspective, the challenge centres on boosting confidence that drives investment and entrepreneurial business behaviour. What John Maynard Keynes called "animal spirits".

These are the elements of the psychology of business operators that take into account all the rational indicators like inflation, interest rates and rates of return, but add that human, "gut-feel" instinct about committing more resources to a business, investing in improved machinery or processes, employing staff, and seeking new markets in the expectation of future gain.

Australia's industry policy settings need to unleash these animal spirits, and create a customised Australian version of competitive advantage which allows us to secure a place for ourselves in global markets.

I endorse the central theme contained in "Manufacturing Prosperity" that an outward-looking, productive, and innovative Australian manufacturing industry is a pre-requisite for our future prosperity.

But, it is a "new manufacturing" of clever, sophisticated enterprises which work with the best of technology and with empowered and skilled employees and managers to offer a fusion of products and services that best meet the needs of diverse customers worldwide.

Therefore it is with great pleasure that I launch the book "Manufacturing Prosperity. Ideas for Industry, Technology & Employment" and congratulate the editors and each and every contributor for their thought-provoking ideas designed to shift Australia's industry policy onto the high road.