Good morning everyone. Let me first thank you for being here – and give a special mention to the Ngunnawal people – the traditional custodians of the land – on which we are meeting today.
The subject of my talk this morning is the link that exists between business – government – media – and society – and the challenges of trust – technology change and geopolitical turmoil that are effecting us all – wherever we live.
Sometimes the planets align – and I believe we are at such a moment now – when our future security – prosperity and social harmony require changes in culture – behaviour – policy and practice – if we are to thrive in a rapidly changing world.
So – first I want to look at the changing economic environment that has been the backdrop of today’s position.
The degree of economic challenge may vary across the continents – but there is a common thread – spun over three decades – that links us all.
The 80s and 90s chartered the ascendency of business, entrepreneurism and finance. Bankers – became ‘masters of the universe’ – turbocharging global economic growth with a seemingly endless supply of credit – flowing freely through newly deregulated markets – fuelled by ever more complex financial instruments.
It was an era when some became very wealthy – most got a little richer – few felt left out – almost no one complained – right across the developed world.
Business – regulators – politicians – and the people cheered it ever onwards and upwards as the developed world enjoyed the economic and capital growth that the developing world was rapidly generating.
But then it all went horribly wrong – the financial markets collapsed – the pendulum swung – and the heroes of banking became the zeroes of the hour.
And as the wealth spreading ambition of 21st Century globalisation turned to dust, another era emerged – notably in the UK, Europe and the USA.
Austerity for the masses – prosperity for the privileged – not a good recipe for social harmony – with the frightening spectre of life changing automation lurking over the horizon.
And whilst the track record of Australia – now in its 27th year of uninterrupted growth – grew faster than most major economies – it was not unscathed by the challenges of the rest of the world.
The sudden collapse of oil prices – the credit crunch – the shrinking demand for minerals – and the end of the mining boom.
And how this affected the population at large is my second port of call.
Whilst most enjoyed something on the way up – not everyone shared the pain of the pendulum swing – on the way down.
In business everywhere complex executive remuneration schemes – created and authenticated by remuneration consultants – authorised by board committees – self justified by international competition – and – ironically – greater transparency – propelled executive reward packages to new heights.
Meanwhile – the people at the bottom stood still or – at worst – fell backwards – in living standards and prospects.
For the people at large – a line was crossed – and the issue of fairness became a lightning rod for social friction – and political disruption – as the one per cent club looked increasingly estranged from the ninety nine.
And it was here that the media played a vital role as the voice of a disaffected and disillusioned public – exposing social injustices and holding business and government to account – just as it should.
But the flames were also fanned by a new type of media – revolutionised by technology – in the world where the speed of reporting and the competition to file first – not only the facts – but the highest impact version of the facts – became the challenge of ever present social media and 24 hour rolling news.
The ability to publish to a global audience – anytime – anywhere – by anyone – gave rise to a plethora of news and views – blogs and broadcasts.
From unverified – and frequently unreliable sources – and less scrupulous commentators.
Happy to use exaggeration – speculation – or at the extreme – the now famous ‘fake news’.
Making fact – truth – and accuracy increasingly valuable commodities.
Commodities that must be preserved at all costs if the credibility of those that report responsibly – is not to be crushed by those that are reported upon.
And it is here where the planets align – business – government – society – and media – struggling in the face of economic change – political upheaval – and changing technology.
And at the heart of the struggle – trust.
Trust – in business – media and government – a crisis of trust where all involved must acknowledge their shortcomings – modify their behaviours – to recover their reputation.
So – why is this now important – and how can we address the challenges?
The ‘why’ is clear.
The importance of a respected business community – trusted political leaders – and a respectable media industry cannot be overstated.
Each has an essential role to play in ensuring change translates into prosperity and progress – business as a wealth creator – government as a regulator – and the media – as a check and balance that holds both to account.
For there is equally no doubt – that if that fault line of mistrust becomes a permanent fracture – and the value of business – the credibility of government and the reliability of the media on which society depends – is demeaned – their ability to function for all our benefit – is seriously damaged.
In today’s world – to attract talent – and be accepted by society – organisations are not simply judged by how much money they make – but much more – on how they make money.
Reputation is all – for companies and their bosses – for media and their moguls – for government and its leaders.
Ethics – social purpose – contribution to society – are not optional extras – but key criteria for access to talent, capital, customers and consumers – for the long-term future of any enterprise.
To add to the challenge for all of us – the divisive downside of globalisation is about to be amplified – as the speed of technological change accelerates – intensifying global competition – deepening the gulf.
Machine intelligence replacing previously privileged roles – increasing productivity and efficiency – ultimately providing alternative work – but at a pace that for some – will fail to fill the gap of economic returns or the daily purpose that employment provides.
It is this pace of change that is forcing society to ask old questions with new intensity.
‘Who guards the guardians? – Who are the truth tellers? – When does technological disruption become social destruction? – And is business the creator of wealth for the few or the engine of wealth creation for the many?’
As the National Press Club know more than anyone – it is the responsibility of a free and fair media to pose these questions and provide the public with factual reporting – and informed commentary – reflecting both sides of the argument.
As chairman of one of the world’s largest defence companies – I am clear that it is the responsibility of business leaders to respond with credible answers to these reasonable questions – not just by what we say – but more importantly – what we do.
And – irrespective of geography or political colour – it is the responsibility of government to create a climate where business can thrive and society can benefit – at all levels – from the wealth it creates.
So – why we must tackle these issues is clear – the how – is more difficult.
Political leadership is essential.
Politicians must focus more on national interest than self-interest – to recognise that some things transcend the day to day squabbles of political ideology – where a united front with long lasting commitments – allow planning to take place on key issues – education, infrastructure investment and industrial strategy.
In a rapidly changing world of technology and economics – it has never been more important to address these challenges – and in many parts of the world – never been more difficult to do so.
In the UK – Brexit has created a divided nation and a two party state – not Conservative and Labour – but leavers and remainers.
The Brexit votes may have been cast and counted – but the beliefs live on – in the people – in Parliament – and in the Cabinet.
And adding to the challenges of government in maintaining public trust – has been the evidence of sexual harassment – across all parties – by a few damaging the reputation of the many.
Disunity inside – and mistrust outside – are the parents of dysfunctionality – and the offspring of dysfunctionality is the turbulence that frustrates progress on all fronts – and undermines long-term decision making.
This is in no one’s interest.
In the USA the change of President – and style of Presidency – has left the administration with seats unfilled – and the world now wrestling with changing messages.
And different methods of messaging – all creating occasional confusion and periodic uncertainty – and a challenge to forward planning at home and abroad.
In Australia – the issues are different – a wafer thin majority – transparency issues of origin and citizenship – the debate on same sex marriage – now determined – but all adding to the challenges of government.
It is against this background of political turbulence in the key democracies of the world – that the problems that face their citizens in jobs, living standards and security – are being addressed.
And if we are to manage change in society in the future – we must all intensify our efforts now.
Business must work hand in hand with government to make it happen – and media to be vigilant – in making sure it does.
Funding the needs of society – in an increasingly protectionist global market – will demand much from the wealth creators.
Better behaviour – in how we communicate – recruit and remunerate – whatever the industry – wherever the location.
Greater focus in how we innovate and seek to penetrate new markets.
Adherence to a strict code of ethics regardless of location – and without exception.
Improved productivity in the workplace to hone our competitive edge.
Greater diversity in the workplace to broaden our perspectives and sharpen our strategic thinking.
And last but not least – a deeper commitment to inspiring, training and educating those that work for us today – and the generations that will follow – to ensure they have the skills for employment in the years to come.
And there is no better example – of government, and industry – working in harmony today in pursuit of shared objectives – than here in the defence industry of Australia.
A government and a defence ministry – under the leadership of Marise Payne and Defence Industry Minister – Christopher Pyne – that has decided to make the production of defence equipment a greater sovereign capability.
With a budget commitment of 195 billion dollars over the next ten years.
Equipping Australian nationals with the skills to produce and support the ships – aircraft – and land vehicles of tomorrow – by investing in their training today.
To work in partnership with industry – like BAE Systems – to develop a national capability – to transition from imports to ‘made in Australia’ products.
To build a stronger national defence industry – not only capable of providing Australia’s armed forces with world class equipment – technology and support – but with the potential to compete globally and secure international exports.
To provide quality jobs for an educated young population – sustainable employment – creating wealth at home and a long-term future for the children of the country.
To do this requires a shift in mindset – and approach – on the part of industry and government alike – from transactional acquisition to strategic partnership.
Working together to facilitate the transfer of skills – technology and capability – into Australia – to support local manufacture – procurement – employment – training and investment.
This is the new industrial agenda.
But it is nothing new for BAE Systems – we have a long and proud history of partnership with Australian industry – it’s what we do – we have been in this country for over 60 years – we have built ships – invested in technology – provided aircraft – and serviced the military.
We are a company rooted in Australia – about to be led by an Australian – Gabby Costigan – who served as a Colonel in the Australian Army – and subsequently built a commercial career in the Far East.
She will lead a diverse and skilled Australian workforce – of some 3,000 men and woman – collectively working on more than 35 major defence projects.
From Williamtown in New South Wales – where we sustain Australia’s Hawk MK 127 Lead-In fighter fleet.
To Henderson, in Western Australia – where we support the delivery of an advanced Anti-Ship Missile Defence programme for ANZAC class frigates.
From Melbourne in Victoria where we are producing some of the world’s most significant research on malware and systems vulnerabilities and Nulka – Australia’s largest defence export.
To Adelaide in South Australia where we conduct some of the most advance manufacturing for the world’s largest defence industry programme – the F-35 Lightning II.
We are embedded in the defence of this nation – working with Australian industry and academia [a government to government partnership].
We are on strong foundations – the bedrock of Commonwealth family – the bonds of 5 eyes security – and the deeper engagement of a future post Brexit economy.
Oxford Economics confirms that in 2016 alone – BAE Systems Australia delivered $1.3 billion of economic value – sustained over 7,500 full-time jobs – delivered productivity 40% higher than the national average – spent four times the Australian economy average on R&D and invested $4.5million in training our engineers and technicians.
We are proud of our record and appreciative of the opportunity this country has given our company.
In conclusion – I would say this.
We all have individual challenges at home – but we all share the common challenges of the world at large.
We live in dangerous times – the Russian bear growls a little louder – North Korea threatens adjacent Asian tigers – the deserts of the Gulf heat up with bitter rhetoric and daily conflict – Australian waters are regularly visited by foreign submarines – whilst the Japanese – and their neighbours – warily monitor the growth of man-made islands in the South China Sea.
Tensions bubble beneath the surface everywhere.
And to be clear – we at BAE Systems are committed to working with you in the face of this increasing risk – on land – sea – in the air – and in cyber space.
Only by working together – will business, government, media and society – find unity of purpose – security of borders – harmony of ambition and comfort in partnership.
These are not issues for debate – they are items for action. We cannot rely on government alone to solve the challenges ahead – it is their role to set the climate for success. Only business can deliver the goods – and the media must keep score.
If we are to thrive and defend ourselves – business must respond as an economic priority and social necessity.
And if we in business shoulder these responsibilities the media should remain vigilant in monitoring our progress.
Diligent in celebrating our successes – disciplined in admonishing our failures – committed to the facts – certain of their belief in balance – and determined in their duty to report fairly and accurately.
It is in no one’s interest that the media is marginalised or business or government demonised.
Now more than ever – in support of society and defence of our sovereignty – we all must work together – to be performance driven but always values led.
It is the only way.