Australian manufacturing is neither extinct nor critically endangered, but it will never return to its former shape, the Assistant Minister for Industry, Innovation and Science, Craig Laundy, has told the Future of Manufacturing Forum at UTS Business School.
“Manufacturing absolutely has a future – but it’s a different future,” he told the forum at UTS Business School.
Rather than mass production of finished products, the modern Australian manufacturer would be a provider of high-value components into global supply chains, Mr Laundy said.
This was already happening to an extent, with globally competitive Australian firms using advanced manufacturing techniques to supply components to multinationals, such as Boeing and its Dreamliner project, he said
But more could be done “to seize the opportunities disruption has to offer, to gain niches in global supply chains and global production”.
“This includes opportunities for greater integration of Industry 4.0 methods … in other words, a shift from labour-intensive and low-value production to high-value-added manufacturing and the use of digital technologies to enable this.”
Greater collaboration between researchers and industry was also vital.
Despite the “doom and gloom” headlines, the reality was that in the past year manufacturing generated $100 billion in export income, just behind the $117 million generated by mining. It accounts for 6 per cent of GDP and 7 per cent of employment, he said.
'The choice is not whether to make things,
but what things to make'
The Shadow Assistant Minister for Manufacturing and Science, Nick Champion, told the forum “the choice is not whether to make things, but what things to make”.
The role of government was to foster an environment that allowed manufacturing to survive and prosper, he added. “Critically, [government] must be predictable, stable and consultative in its approach.”
Some of the key questions government and the sector needed to address together were: How do we take advantage of growing populations and rising prosperity around the world, particularly in Asia? How do we use the transition to a lower-carbon economy as an opportunity for invest and efficiency rather than as a threat? How do we climb the value chain in an era of low-cost imports? Where are the opportunities to drive capital investment in our manufacturing industries?
“A future Labor government will back manufacturing in and work with industry to answer questions like these,” he said.
With government the biggest customer in many markets, procurement policy was also important and should be about fostering capability, not just driving costs down.
The Dean of UTS Business School, Professor Roy Green, told the forum that the innovation message needed to be better communicated – it was not just about start-ups but also about innovation inside existing businesses, as a source of new jobs and growth, he said. Small start-ups could not transform the economy on their own.
International panellist Professor Rodney Brooks, of MIT and Rethink Robotics, addressed the way that robotics and artificial intelligence could provide incremental value, quickly, for manufacturers, while Professor Graham Wren from Strathclyde University outlined the need for industry, academics and government to collaborate.
'We have to look beyond the factory'
Professor Jan Godsell, from the Warwick Manufacturing Group in the UK, told delegates: “We have a once in a lifetime opportunity to harness the potential of bringing together our physical systems with our cyber systems… We are on the advent of the cyber-physical age.”
The circular economy and the sharing economy were also important trends, she said.
“It is time for you to think… how can you create the next generation of business model that will support your business? Because we have to look beyond the factory… what's going on in these little boxes.
“The real opportunity of the cyber-physical age is to connect different entities from all around the world.”
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