It is no surprise that Australian manufacturers are strong early responders to the global COVID-19 crisis.

Research into Australian manufacturing shows it is an industry in transformation, not decline, in the face of fundamental structural and technological disruptions.

Manufacturers have demonstrated their ability to re-tool or pivot quickly and to supply vital health and protective equipment and products. The Advanced Manufacturing Growth Centre reported that in less than a week, over 1300 manufacturers had registered their capability to supply essential goods and services to fight COVID-19.

It is plain now that manufacturing matters to Australia, not only for economic self-sufficiency and security, but for the contribution it makes to the resilience and sustainability of the wider economy. 

It is time for a new deal for Australia’s manufacturing policy, one that reflects this renewed recognition of the value of manufacturing and moves beyond the general inaction and disinterest of governments over recent decades.

But first, a cautionary note. A new deal manufacturing policy for Australia should not be a return to past glory days, nor should it be a plan for some idealized future of a manufacturing resurgence. Rather, the new deal must be framed by realism and pragmatism, an innovation in policy that builds on Australian manufacturing’s competitive strengths and redresses its weaknesses and limitations.

Past bail-outs, protection or favoured treatment for manufacturing, based on a diagnosis of Australian manufacturing in terminal decline, should not feature in this new deal. Rather, new manufacturing policy should be built on strength. Manufacturing is valued as an irreplaceable sector of the Australian economy, but one which warrants strategic support to adapt, evolve and grow.

The task is to bolster Australian manufacturing so it can continue and expand its contribution to Australia’s success as a small, open, free market economy, even in times of crisis and volatility.

This means action at the level of the manufacturing firm and its workforce.

The key mission of such manufacturing support is to make it feasible for Australian manufacturers to compete on value, not price, both globally and at home.

This requires fostering the following abilities in manufacturing firms: 

• methods of experimenting with innovative business models;
• access to and absorption of new knowledge, both from customers and researchers;
• organizational learning and capability-building;
• closeness to customers;
• matching new opportunities with capabilities and skills;
• the right people empowered and well-managed;
• a sound radar for new trends, technologies and opportunities;
• processes for managing risks;
• simultaneously managing current business activities, selectively abandoning past activities and exploring ideas for new activities;
• a mindset of willingness to collaborate with other businesses, higher education bodies, government, and other stakeholders.

An opinion piece by Professor Roy Green for the Australian Manufacturing Forum summarises the case for a new deal for Australian manufacturing policy and identifies five important building blocks, including better co-ordination of a national industrial strategy, industry clustering and procurement initiatives. 

Endorsing and drilling down into Roy Green’s commentary, it is useful to define the following priorities for a new deal manufacturing policy.

A fresh approach to Australian manufacturing policy should be driven by the twin imperatives of creating demand and opportunities in lucrative markets, and building the necessary capabilities and skills in a critical mass of Australian manufacturers (not just high tech, high growth firms) to respond imaginatively to this demand.

This banner of ‘demand’ and ‘capability’ can be translated into practical programs such as:

• Voucher schemes which provide an incentive and make it easier for manufacturing businesses to seek external help with acquiring knowledge and solving business problems or undertaking change transformation projects. 
• Procurement programs which are designed to provide manufacturers, often small and medium sized enterprises, with a lead customer to challenge them to find solutions and pull through new knowledge and skills that they can then take to the wider marketplace. 
• Industry or Technology Roadmap projects, which are effectively industry clustering initiatives either for a sector or geographic region, where manufacturing firms and other related interests are brought together to explore the potential of ‘smart specialisation’ initiatives. 
• Shared Learning Programs, often peer learning involving practical and case-based presentations by other manufacturing firms and their leaders, e.g. advanced manufacturing technologies for business performance; business model innovation; design thinking.
• Manufacturing Leadership and Mentoring programs that are industry-led and involve the leadership teams of manufacturing enterprises participating in structured networking and mentoring sessions with credible and experienced manufacturing business leaders.
• Innovation or Maker Spaces provide opportunities for manufacturers to experiment with business innovations in a ‘safe’ space without risking all the resources of the enterprise. Such spaces can be used to retrain workers, trial business ideas, test out business applications of new technologies, and create manufactured products and prototypes.

The current crisis of a global pandemic shows that economic and social goals cannot be separated, action to safeguard both lives and livelihoods are presenting a complex and community-wide challenge. Australia’s manufacturing industry can be part of the solution. A new deal for manufacturing policy in Australia is a significant first step.

REFERENCES:

This is an extract of an article posted by Narelle Kennedy, Managing Director, The Kennedy Company on the Australian Manufacturing Forum LinkedIn group, 20th April 2020, see www.aumanufacturing.com.au

Roy Green, A New Deal for Manufacturing—Five Building Blocks for a New Plan, 14th April 2020, go to https://www.aumanufacturing.com.au/a-new-deal-for-manufacturing-five-building-blocks-for-a-new-plan-by-roy-green