Dow Chemical’s boss blazes an innovation trail for Australia

West Australian, Perth
March 28, 2016
EDITORIAL

Australian politicians dithering over what will drive our nation's economic growth in a post-mining boom world would be well advised to seek a meeting with the global head of Dow Chemicals.

Speaking at a WestBusiness Leadership Matters event in Perth last week, Darwin-born Andrew Liveris outlined a compelling blueprint on how to transform Australia's economy.

The Michigan-based chairman and chief executive of Dow delivered his message passionately and without hyperbole, drawing parallels between Australia's current situation and that faced by Dow when he took over the reins as boss in 2004.

"The commodities cycle is unkind," he told hundreds of WA business leaders at the breakfast event. "It means booms and busts.

It means tying your fate as a nation to resources that are forever dwindling.

"Relying too much on commodity exports has always been risky. But today ... it is untenable." Mr Liveris' three-step plan for Australia was uncomplicated. "First, we need a smarter energy policy," he said.

"Petrochemicals are not only good for being burned, they serve as the building block for all manner of high-value, high-technology products such as the materials that make your cars and trucks safer but also lighter and more fuel-efficient.

"Second, Australia should create a better business climate that encourages investment. In today's globalised world, countries are competing against each other for business just like companies do. A better business climate is a competitive advantage.

"Finally, we must help create a free and fair international trade environment by opening doors for high-value exports . improving the exchange of goods and ideas . and linking Australian businesses with global value chains and growing markets around the world." This was no thought bubble. Mr Liveris was speaking with the wisdom of hindsight.

"We at Dow know something about the mercilessness of the commodities cycle," he said. "A little more than a decade ago, when I was just settling into my role as CEO, Dow's success was dependent on the cycle.

We were not in control of our own destiny." His solution was to chase high-margin sales through creating advanced materials, not just the chemicals the company had formulated since 1897. Mr Liveris achieved that goal by fostering a culture of innovation that enabled the number of Dow patents to jump sixfold in 10 years.

Prime Minister Malcolm Turnbull and Premier Colin Barnett could do worse than talking to Mr Liveris, a genuine captain of international business, about how they can transform Australia like he changed Dow.