"We need to choose the battlefields of natural competitive advantage and seek out and put in place the enablers that will make those battlefields the most competitive for Australia," he said.
"Those Australian organisations that are trying to combat the emergence of globalisation - and inevitability of globalisation - can't rely on the tools of the past."
Mr Connolly said in a globalised world Australia cannot say it is constrained by the tyranny of distance.
"Actually the risk in my eyes is that Australia hasn't really embraced the inevitability of globalisation," he said.
"To compete successfully you need to select your field and be globally best, not just nationally.
"We need to find our place in specific industries; we cannot be all things to all people with the scale we have."
Mr Connolly said China's competitive advantage is not cheap labour but scale and speed.
Australia's labour rates are not as big an issue as our deteriorated infrastructure and lack of modernisation, he said.
Australia is also impeded by factors including negative conversations from Australia's leadership community which fuels a lack of entrepreneurial confidence and colours the perceptions globally, he said.
"We need urgently to focus on areas of international competitiveness, remove impediments and put enablers in place from government, business and education institutions to all have a role in this new focus," he said.
The only way for Australia to be successful is by continuously being competitive, he said.
Victoria University, Centre for Strategic Economic Studies Director, Professor Bruce Rasmussen said: "Despite the decline in GSP (Gross State Product) share, the Victorian economy seems to be in better shape than it is given credit for by some economists and commentators in the media."
"I think in the medium term the Toyota decision to cease manufacturing from 2016 will undoubtedly have a serious effect on the Victorian economy," he said.
"Although these recent events are important, I think they need to be seen in the long-term trend of the Victorian economy and not be allowed to overshadow some of the real growth opportunities."
Professor Rasmussen said that the structure of the Victorian economy has shifted with 50,000 jobs lost in manufacturing since 2004 but had gained 112,000 in health, 80,000 in professional services and 67,000 in education.
"Despite disadvantages as a non-resource state, Victoria has emerged in reasonable shape with its continuing transition to a modern, knowledge-based services economy," he said.
However, Professor Rasmussen said Victorian firms have been slow to take advantage of the immense demand for imported services from developing Asian countries.
"We have yet to develop - with one or two exceptions - much of an export focus in the supply of these services," he said.
"The poor local export performance has been exacerbated by the high dollar but much of the explanation resides in non-price factors."
The Australian Financial Review, Melbourne Bureau Chief, Mat Dunckley said the State Government has accumulated surpluses of about $6 billion and thinks "they're ready to at last commit to some pretty serious spending."
"The key question is whether all that spending in an election year and all those promises will be enough to shake the perception that the government hasn't done enough," he said.
On the other hand, the Victorian Opposition Leader Daniel Andrews is not publically well known and the Labor Party is still suffering from a brand damage issue from what happened in Canberra, he said.
Commenting on the redistribution of electoral boundaries in Victoria, Mr Dunckley said the new boundaries appear to favour the Liberals.
"What has happened is that Labor has had more seats taken off it notionally than the Liberals," he said.
"So the number of seats has mostly moved in favour of the Liberals but the swing that is needed has come in quite a long way."
While Mr Dunckley would not predict who would win the state election, he did predict the result of the upper house.
"One thing I would predict with some certainty is that I think the upper house contest should be closely watched by anybody with an interest in what happens in Parliament," he said.
"I think the Greens are almost dead-set certain to get the balance of power."
Justin Fabo, Head of Australian Economics, Corporate and Commercial, ANZ Banking Group
Malcolm Farr, National Political Editor, news.com.au
Peter Harris AO, Chairman, Productivity Commission
The Hon. Mark Vaile AO, Chairman, Whitehaven Coal and former Deputy Prime Minister
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