Energy superpower: Perth Selected for Battery Boffin Hub - Essay

For this essay, we picked an article from The Sydney morning herald titled as ‘Energy superpower: Perth selected for battery boffin hub’. The article is written as the news of the federal government investment on a $135 million research center in the city is announced. The author highlights that this investment will help in creating jobs which were already on a high due to the expansions and new opening of mines in Western Australia. This research center will focus on the gaps in the value chain, processing minerals, and development of new battery storage system. With the focus of the WA government set on this battery mineral extraction, this center will give a remarkable result in the industry. The author also shed some light on the opportunity available after the investment is of a testing center to analyze the purity of these minerals (Hastie, 2019). The author here refers to many economic concepts such as comparative advantage, trade, government, labor economics, and theory of production, international trade, investment, and markets. Starting off the article discusses investment in the market where an investment in the center will be used to create future wealth the general business doing cost will have a positive impact in the industry. The author also talks about comparative advantage achievement internationally when the investment will pay off in results of advanced technology, this research center will help Australia to capture a significant portion of the global market of battery rectifying the gaps and building a better value chain and also enjoy the advantages of processing and development of new technology, this will surpass all the other advantages the battery industry has. The research center will also open new doors for trading as a whole either internationally or locally in a smaller magnitude this will result in improving conditions within the industry. Government has taken the primary role in this shift in the industry to develop favorable policy and timely investment. Labor economics will also have an impact from this investment it will increase the demand for specific job roles with the expansion of mines and investment in research for the future battery industries. The theory of production and marketing is also being highlighted in the article that production is based on the quality, ethically sourced and highly efficient processing of the minerals whereas the market is indicating strongly that it has paved way for the global leadership position in the battery. The author has pointed out many economic factors in a summarized article; the concepts used by the author are true in nature due to the concrete information given whereas the predictions of after investment may be affected by variation in results. The author has used these numbers of concepts to reflect the economic viability of the investment, to go deeper into analyzing these let's reflect on the comparative advantage theory to explain whether the article is written efficiently.

Comparative advantage is one of the most important concepts in international trade theory but can be misunderstood easily. The economist Paul Samuelson (a Nobel laureate in economics) was asked to provide meaning full and nontrivial result from economics, he replied with comparative advantage. The concept of comparative advantage can be misunderstood at many stages due to its confusing nature and comparisons with other theories. 

The comparative advantage which is not easy to understand at first is presented with the example of a number by Ricardo which imagined two countries producing two goods, clothes and wine. The first factor of production which varies amongst the countries is the efficiency of labor, and is based on assumptions to obtain the production of the product at a lower opportunity cost as compared to other countries (Saylordotorg.github.io, 2019) The author in this article reflects on a similar pattern as to when the research center will be operational and the gaps will be filled it will give a comparative advantage to Australia in the global battery market. The article consists of all the basic information required with many quotations from important stakeholders, through a negative viewpoint is also highlighted where it reflects that how many reports suggest that manufacture of battery is doubtful and maximum profit can be earned by focusing on materials like lithium hydroxide which attracts a premium price. To further elaborate the decision of not focusing on materials extraction alone is the opportunity cost for the Australian government, The profits which could be generated after investing a resource in another opportunity is known as the opportunity cost which is not recorded in any book but can only be assumed (Econ Lib, 2019). The reports suggest that Australia has world-class resource extraction ability and the cost of not engaging into the pure business of extraction is not the decision taken by the government is focused on building a value chain where from extraction to development they have paved way to make Australia a global battery industry. 

Macroeconomics consists of concepts on how the aggregate economy behaves, it looks at the overall factor of the economy as a whole, it has many models which has relationships between many factors within these factors can help government decide on policies, whereas Microeconomics is the sciences of individual decisions made within the scares resources, it does not explain as to what should result in the market yet it explains what will the market result after certain changes in the condition of the market (Investopedia, 2019). The takeaways from the article on the concept that there is a web of economics concepts in the industry, factors are not isolated yet every factor is connected to other factors to have them evaluated. The initial investment opened up to concepts like labor economics, international trading, etc. To analyze the market and investment opportunity one should not isolate factors and evaluate them it is essential to analyze with the entire sub affecting concepts or models. To have a better understanding of the overall impact any business or action brings to society.