Dig It and Make It

The future global economy relies on what nations can build. Is Australia ready for this?

If you want an example of numbers that are too big to ignore, try PwC’s latest release, Global Data Centre Outlook 2026–50. In the September 2026 report, the firm forecasts that investment in datacentre construction and fit-out from 2026-50 will be somewhere up to US$50 trillion, or $71 trillion in Australian dollars.

The investment is driven by AI uptake and the upgrading of chipsets and processors every four to six years. Twenty-five percent of datacentre investment will be in securing energy supply.

The boom is about things that are invented, developed and built, with a non-stop cycle of improvement and upgrade. It might be that while AI is a software opportunity in the first instance, for Australia our next resources boom may not be dug out of the ground, it could be powered by what we build above it.

Australia has an intrepid business community, but we risk missing this boom. As the world engages in R&D, manufacturing and value-adding resources, Australia seems complacent about the abundance of our resources.

I’ve spent the last few months at events that highlight hydrogen, AI, copper, lubricants, manufacturing and datacentres. Most people discuss these industries separately, and very few are connecting them into a single economic story.

The unifying story is sovereign capability, underpinned by four trends: AI, critical minerals, manufacturing and secure supply chains.

The new gold is not necessarily the cheapest or the most lucrative short-term. It’s the extra value that a nation derives from disparate elements to meet global demand and does so in a way that benefits the national economy.

Australia should be part of this. AI is driving unprecedented demand for datacentres and energy infrastructure and recent industry forecasts describe Australia as having a significant opportunity to become a regional AI infrastructure hub.

This AI boom is primarily about infrastructure which involves building and making things. And as a nation we are well-placed to capitalise. Critical minerals, copper and electrification remain foundational to the AI datacentre build-out – Australia can provide these things on its own terms.

Manufacturing capability is also becoming strategically important. Australia’s share of manufacturing in GDP has slipped over the past 40 years, to now being the lowest in the OECD nations. However, Aussie manufacturing still employs around 900,000 people and focuses on advanced manufacturing.

Manufacturing is a strategic advantage as evidenced by the disruptions of the Ukraine War and Covid, which demonstrated the need to have a strong onshore manufacturing base.

The world’s great economies, United States and China, are locked in a race for manufacturing supremacy, and India, EU, Japan, Korea and Taiwan have their own economic and legal measures to achieve domestic dominance in certain manufacturing sectors. Even Australia has initiatives such as Future Made in Australia.

However, while we produce lithium, rare earths, nickel, copper and cobalt, most of the output is shipped to China for refining. Even copper – which is an integral part of the AI infrastructure build-out canvased by PwC – only sees half of the ore refined in Australia, and one of the refineries is propped up by government. Our energy costs, and therefore processing costs, are too high compared with China at a time when copper has been added to the United States’ critical minerals list.

Sovereign manufacturing dovetails with resilient supply chains. Supply chains have not grabbed the Australian imagination, but they should: look at what a few months of disruption in the Strait of Hormuz created for this country. Or recall shortages of fertiliser and AdBlue during Covid.

The power of secure supply chains, conducted with like-minded nations, is a crucial element of sovereign capability. This was at the heart of the 2021 Indo-Pacific Economic Framework (IPEF) to which Australia is a signatory. It introduced the term ‘friend-shoring’ which was really an argument for supply chains among amicable nations eg. US, India, Australia, Canada, Vietnam, Malaysia, Singapore, Indonesia etc.

Moreover, Australia seems fascinated about AI as a software opportunity, but supply chains deliver actual material goods that can be made into something in Australia. The fact that the IPEF was driven by the US to take strategic chokepoints away from China should give us a clue about the importance of supply chains to our future economy.

Every AI breakthrough ultimately depends on physical infrastructure, which includes datacentres, power generation, cooling systems, mining equipment, transport networks, construction materials and industrial lubricants and greases.

The AI economy is not just a technology story, it’s an industrial story. If we play it right it reinforces sovereign capability which brings in resources, R&D, energy, hi-tech, manufacturing and construction.

The countries that benefit most from the AI boom won’t necessarily be those that build the best AI models. They may be the countries that build the infrastructure, supply chains and manufacturing capability that enable those models to run.

Australia has what the world needs. The question is simple: will we make it here, or buy it back from somewhere else?

Julie Harrison is the CEO of Harrison Manufacturing Company