Australia: Horizontal linkages—Positive spillovers through horizontal linkages (Case Study)

Australia has leveraged its vast mineral reserves to drive broad economic growth by fostering horizontal linkages, where innovations developed for the mining sector diffuse into other industries. This process was supported by a National System of Innovation, a highly skilled workforce, and a business-friendly environment rather than strict local content mandates. A key outcome is the growth of the Mining Equipment, Technology and Services (METS) sector, which now contributes nearly 7% of GDP and employs more people than the mining sector itself. The document highlights that these spillovers occurred as a by-product of supporting the overall business environment and upstream linkages, providing a model for other resource-rich nations to achieve structural transformation.

• Australia avoided the 'resource curse' by creating a framework that enabled horizontal linkages, which allowed the mining sector to drive development in other industries such as automakers, chemicals, and industrial equipment.
• The Mining Equipment, Technology and Services (METS) sector has become a major economic driver, contributing nearly 7% of GDP and employing 7% of the Australian labour force, surpassing the employment levels of the mining sector itself.
• Australia's global competitiveness in mining is reinforced by its leadership in mining software, with an estimated 60% of the world's mines utilizing Australian-designed software.
• Government policy did not explicitly target horizontal linkages but instead facilitated them by instituting investor-friendly reforms, supporting a National System of Innovation, and providing R&D incentives.
• The development of the METS sector was accelerated by the 2001 Action Agenda, which provided a framework for collaboration between companies, governments, and research agencies, contributing to a five-fold growth in the sector over 15 years.
• Historically, the Australian government required mines to fund social and physical infrastructure, such as schools and hospitals, though this practice declined in the mid-1980s due to the rise of fly-in/fly-out (FIFO) arrangements.

APA

Dolo, S., & Odendaal, M. (2018). Australia: Horizontal linkages—Positive spillovers through horizontal linkages (Case Study). International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-australia-horizontal-linkages.pdf

Chicago

Dolo, Somine, and Martin Odendaal. Australia: Horizontal linkages—Positive spillovers through horizontal linkages (Case Study). International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-australia-horizontal-linkages.pdf.

Wikipedia

{{cite report |last1=Dolo |first1=Somine |last2=Odendaal |first2=Martin |title=Australia: Horizontal linkages—Positive spillovers through horizontal linkages (Case Study) |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-australia-horizontal-linkages.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dolo2018australia, author = {Dolo, Somine and Odendaal, Martin}, title = {{Australia: Horizontal linkages—Positive spillovers through horizontal linkages (Case Study)}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-australia-horizontal-linkages.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }