Part 2: A worsening skills balance – a key legacy of Australia’s unprecedented prosperity

Part 1 of this series made the case that humanities and social sciences (HASS) and management disciplines are indispensable for the long-term effectiveness of military planning. They greatly complement STEM capabilities and help make military plans more relevant and robust. This second article in the series explores the pervasive antipathy towards these disciplines in the Australian public discourse, and the implications of this for the Australian military.

As was explained in Part 1 of this series, STEM capabilities are best thought of as a ‘necessary but not sufficient condition’ for long-term military effectiveness. Despite this obvious fact, the public discourse in Australia reveals a pronounced, profound imbalance in how it perceives and values these different disciplines. On the one hand, STEM skills are placed on a pedestal as the ‘be all and end all’ of national competitiveness, while HASS skills are treated with particular antipathy and disdain. This is a long-term trend, which transcends political differences, and the recent cuts (in response to the ongoing pandemic crisis) to public funding for HASS university degrees are only the latest example of this thinking.

Within the military as well, the discourse around skills development – with an emphasis on STEM capabilities – indicates that this thinking has percolated down into its own worldview as well. This is to be naturally expected, since the military cannot operate separately from the broader ecosystem within which it is nested. It is to be further expected that it will take its ideological, conceptual and organisational cues from this ecosystem. In this context, two important implications for the military become immediately apparent:

First, the onus is on the military to stand apart from itself and observe how its own thinking is being conditioned by these cues from its enveloping ecosystem. It needs to be able to independently, critically assess the narratives it is imbibing from this system. This is important because these narratives directly determine which issues are seen as problems to begin with, which problems are seen as worth prioritising, and which solutions are seen as desirable/feasible to address those. In other words, they will directly affect the military’s capability evolution over time, as well as the outcomes it could hope to achieve with those capabilities.

Second, it needs to understand the genesis of this thinking. This will not only empower it to evaluate the wider narratives of skills development, it will also prove invaluable in foreseeing its own skills shortages over the next decade or so, and how empowered it would be to alleviate those on its own. In other words, understanding the drivers of this thinking will help it understand the extent of its own dependence on its broader socio-economic system to meet its skills needs in the future.

As it turns out, the pervasive disdain for HASS that has taken deep root within the broader Australian public thinking can be traced to the conditions of the nation’s own economic prosperity.

For the past three decades, if not for much of the past century, Australia’s economic prosperity has been based on an ‘extract and export’ economic model, where growth has been fuelled by low value-adding resources and agricultural exports, rather than by manufacturing and innovation. In fact, the manufacturing sector has been effectively gutted over the last 2-3 decades, and innovation-driven industries are conspicuously scarce in the list of Australia’s top export sectors.

It is also noteworthy that the broad composition of Australia’s exports and imports has remained quite stable over the decades. For example, according to the Reserve Bank of Australia, Australia’s exports to the rest of the world over the last century were dominated by agricultural or resource commodities (gold in the early 1900s and wool up till the mid-1960s). The only significant diversification has been through the exports of tourism and educational services, both of which are also categorised as low value-adding industries.

Consequently, Australia has come to value investments and skills that facilitate a more efficient extraction of resources, rather than their transformation into higher value-added products, or a sustained competitiveness in export markets for such transformed products. This is in stark contrast to most other OECD countries, which are based on an ‘innovate, make and compete model’, and which benefit from higher injections of both public and private funding in their innovation-driven sectors. The composition of Australia’s exports makes it a stand-out amongst the community of developed nations.

A key legacy of the resources boom has been a mentality best described as ‘supply creates its own demand’. Put another way, all that a country needs to do is facilitate stable supply, and markets will arise to absorb that supply and buyers will ‘beat a path to the door’. The need or the ability to compete in global markets would therefore be redundant by default. Such has been Australia’s good fortune thus far, owing to its generous endowments of resources, particularly iron ore and coal (and in the past, gold). These are in high demand globally, and as much and as fast as it can dig these resources out of the ground, it has ready buyers willing to pay top dollars for them.

The main problem with this thinking is that it can work in context of resources that are in demand, but it will never work in context of non-resources industries such as advanced manufacturing, robotics, Artificial Intelligence, renewable energy, and financial technology, etc., where other countries can innovate and compete just as well, if not better.

For these non-resources industries, the ability to produce does not automatically translate into an ability to sell. Both require very different types of skills. The former mainly requires STEM skills. The latter requires additional capabilities required to compete in global markets; capabilities that would be imparted by HASS disciplines such as management studies languages, history, psychology, religious and cultural studies, politics, sociology, politics and economic, etc.

It cannot be over-emphasised that these are also precisely the capabilities that would be needed to deal with the complex military challenges in a socially- and economically-diverse region such as the Indo-Pacific. This is particularly true in an era when Australia can no longer continue to take assurances of great power protection for granted. It will increasingly need to achieve greater self-reliance through its own partnerships and engagements, and take on greater responsibility for its national security outcomes.

Despite this undeniable context and logic, the supply-side thinking continues to pervade policy discourse in Australia. Recent policy decisions, such as the recent cuts to HASS funding, show that Australia is further doubling down on this thinking. This is so even as it faces increasingly tough competition from other economies, which have spent decades developing their innovation, industrial and marketing capabilities, as well as their economic footprint in the Indo-Pacific region. They have made significant investments to expand their trade and economic linkages in the Indo-Pacific region, and to integrate these linkages with their military prerogatives. This is the reality that military planners have to contend with as they seek to create a future-focussed military.

A key lesson to emerge out of the CALFS18 conference was that in the 21st century, preventing conflicts is as important as winning them. This expansion of goals represents a profound paradigm shift in military thinking. Achieving these goals requires skills that are decidedly non-technical and non-military in nature, and acquiring these skills was identified as a strategic priority for militaries in the modern era. The Australian military is no exception. However, its ability to acquire these expanded skills faces a significant constraint that is a direct legacy of Australia’s economic success over the past 3 decades.

What is the Australian military’s Plan B?