The Revival of Australian Manufacturing
In 1988 my economics teacher spoke of the ‘global economy’. I was either too dopey to understand what that meant, she didn’t really know herself or she had trouble explaining it. Whatever.
To say that we have spent the next 30-odd years – the entirety of my adult life – hurtling toward this notion of an economy with no borders is undeniable. A place where we all do what we are good at and – irrespective of where we live – bring it to the global marketplace and exchange it for currency.
For Australia at least, that has been good. Until now.
The increment in global productivity has resulted in increased living standards. Countries like China have leapt ahead. They are the obvious ones, but not the only ones. Look at Vietnam.
In the same period, Australia has generated untold wealth with years of economic growth. We have ridden the wave created by the rise of Asia. Much of our effort and investment has been directed to the mining and education sectors.
In the meantime, high profile industries like the automobile industry have disappeared from Australian shores. So too, it is now apparent, the manufacture of critical medical supplies including medicines and personal protective equipment.
So, in this global pandemic, we have been caught with our pants down. Not quite in the way that former PM Malcolm Fraser was, but economically. And in my opinion, we will be again. Short memories and all that. But more of that another time.
The question for the time being – is the global COVID-19 pandemic the catalyst for the revival of Australian manufacturing?
The sovereignty of manufacturing and the future of Australian manufacturing.
I recently caught up with Advanced Manufacturing Growth Centre’s (AMGC) National Director of Industry, Michael Sharpe to discuss Australian manufacturing, the sovereignty of manufacturing and where the future of Australian manufacturing is positioned.
Michael highlighted the overwhelmingly positive response by the public to reinvigorating Australian manufacturing, and the ability to pivot that parts of our manufacturing sector have demonstrated. He also welcomed the positive response to AMGC’s COVID-19 Manufacturer Response Register.
The Covid19 manufacturer response register launched in early April 2020. Within two weeks, two thousand manufacturing companies have signed up to offer their capabilities, and manufacturing support to the COVID-19 response. We’ve been able to bring manufacturers together across the nation to support such projects like production of hospital beds and the manufacturing of face-shields. Government support has seen the Australian Army bought in to support certain manufacturing companies to scale up their production of face-masks. It demonstrates there is no time better than now, to show that collaboration is truly a driver for advanced manufacturing.
The Advanced Manufacturing Growth Centre has companies looking at reshoring operations back to Australia from China and other countries, and advanced manufacturing is certainly playing a key role in that because of the digital transformation of businesses, robotics and automation.
The revival of the Australian economy? Manufacturing is going to play a key role.
Industry 4.0 is allowing Australia to have this reshoring capability and boost the manufacturing sector to make high-value goods that we can export to the world.
Australia’s Small Medium Enterprise (SME) manufacturing community is very strong. Other countries that have big manufacturing firms do not necessarily have a rich mixture of SME’s manufacturing, one of our nation’s strength. When we have needed to pivot, we’ve been able to do it very nimbly and effectively.
Manufacturing represents 10% of the Australian workforce (1.3 million people) so it’s significant to the Australian economy and is going to be incredibly significant to the Australian economic recovery, conversations right now are turning to what is on the other side of the pandemic.
We are blessed to have some of the best researchers in the world right here in Australia. A key initiative of the AMGC is to breakdown those barriers between researchers and industry to help with such things as design engineering, right through the value curve, to sales and marketing.
These changes will get our researchers onto the factory floor, working and partnering with industry to develop world-first technologies and world-first products that we can take to the world.
The future for Australian manufacturing is not low-cost production it’s about high value-adding.
Now more than ever before the opportunities are there for Australia. We have this great brand that we all share. It doesn’t matter where in the world you go, Australia is as respected as Aussies. Australia made products are trusted, and if you think about our food production and food manufacturing some of the food that we export to the planet we create great value.
Think about Cochlear, ResiMed and CSR, these great companies that have grown through Australian ingenuity and technology. The future for our nation is not what we make but how we make it. Look at robotic automation, artificial intelligence and the digital world as our new manufacturing platforms.
We have the opportunity right now to grab this momentum and the fact that manufacturing in Australia today is not the manufacturing of our grandfather’s age. Take welding, for example, if you can operate a play station you can operate a robotic welding machine. The AMCG, the Innovative Manufacturing (CRC) and the government have been able to co-invest in projects within industry. Despite recent cutbacks to R&D funding, it would make sense for R&D incentives to become more commonplace post-COVID-19.
Australians are not waiting around though. The best businesses are out there doing it, doing the doing, getting on with their business through innovation and practicalities. To further develop and assist these businesses the AMCG has established the Manufacturing Academy. (https://www.manufacturingacademy.org.au/) This online learning platform is a destination to learn from AMGC members who have or are continuing to transform their businesses. It provides members with research, real stories and insights from the most informed and successful manufacturing minds.
The next generation in manufacturing
This is where the rubber really hits ‘the future of the Australian economy’ road. We had the Prime Minister launch the new space for the Australian Space Agency. We have AMGC members operating in the space sector. Firms like Nicholas Hacko Watches, Australia’s only manufacturer of watches and timepieces, looking to pivot. Their specialized fine precision engineering watch-making equipment can also be used in such things as cube satellites, and other space technologies. So, here’s an example of firms here in Australia that are already pivoting to be part of a growing sector; it’s a pretty exciting time.
Examples like this will get the next generation enthusiastic and considering careers in the manufacturing sector. It is a future driven sector through the early adoption of robotics, automation, artificial intelligence, and remote operations that will ideally be suitable for space. There are not many industries that are as forward-facing as manufacturing.
Building resilience in manufacturing is critical moving forward. It always has been a core belief that Australian businesses will innovate and problem solve. The future-proofing of our manufacturing resilience needs to embracing collaboration, get researchers and industry working together and focus from the start on export.
People trust the Australian made products so how do we leverage that even further?
The global markets trust in brand Australia has a lot to do with the quality of fresh produce that comes out of the agricultural sector. The AMGC is looking at the Circular Economy and how we put recycled goods into the value chain of manufacturing. Examples are emerging in the auto industry (via the Waste Motive initiative), and there is an opportunity for other industries to also develop schemes that encourage recycling.
Firms are already using innovative ways to produce energy at their factories, but this needs to be a much broader discussion. Energy is a massive cost input in the manufacturing process. Traditional sources of power are questionable in providing sufficient quantities for factories themselves, and this highlights the need for infrastructure development. The Inland Rail will link Brisbane to Melbourne via an international airport at Toowoomba. This will see fresh produce picked at Griffith hitting tables in Asia within 24 hours. The knock-on effect of the infrastructure will lead to innovation at many levels of the market. It brings export to our front door.
Michael reiterated that the future of Australian made products is positive. We have a great brand to trade from, there is a focus on greener inputs in the value chain, there are energy and infrastructure developments. These are building the nation’s future today.
If you’re in the manufacturing business or have an interest in Australian manufacturing, I encourage you to become a member of the AMGC (joining is completely free) and to check out the Manufacturing Academy’s resources (also free).
For further information contact BridgePoint Group on 1300 656 141 or email us email@example.com