“The only way we’re going to be able to do that is increase productivity and innovation is an important part of productivity.”
Policymakers have had a fraught relationship with such policy blueprints in the years after Malcolm Turnbull’s ‘innovation agenda’, with many startup heavyweights observing governments had been too focused on the budget bottom line instead of longer term investment policies.
Long-term thinking has been high on Mr Howitt’s agenda as Cochlear plots a way out of the pandemic. The crisis has disrupted the Cochlear business in ways outside of management’s control. Shutdowns of elective surgeries across the globe led the company to embark on a $1.1 billion capital raise to ensure liquidity as sales dropped.
Cochlear has already told investors that the pandemic would have a “substantial, short-term” impact on sales. Revenue across the business declined 60 per cent in April and implant sales dropped by 80 per cent.
Mr Howitt said the company’s crisis management procedure lists “global pandemic” as a possible threat.
Cochlear services tens of thousands of Chinese citizens who have its implants and it has increasingly focused on that market, which is showing signs of recovery. The company is currently building a manufacturing facility in Chengdu and Mr Howitt is taking a multi-decade view of trade in the region.
“We take a very long-term perspective when we look at China. Our approach is that we have to support people [customers with implants] there throughout their lifetime,” he said.
He’s also optimistic that the current friction between China and Australia, following the Morrison Government’s push for an international inquiry into the origins of COVID-19, won’t escalate into a full-blown trade war.
“There is a lot we have in common, and the more we focus on what we have in common, that is important.”
““We expect that from time to time there will be strains in the relationship but over the long term we hope it is constructive – and if you look at it over the long term, it has been constructive… if you look at the economic relationship between China and Australia, it has been mutually beneficial.”