Tag Archives: policy levers

The advanced manufacturing flagship

We have a rich seam of transformative advanced manufacturers in Australia who are not only securing their own future; they are helping to underpin a sustainable Australian economy.

But our future in an uncompromising global economy is precarious. Few decision-makers in OECD countries believe they will remain prosperous without a thriving, high-tech manufacturing sector.

A prosperous Australia depends on supplying higher value solutions to the world – and the recent national focus on science, technology, engineering and mathematics (STEM) education is fundamental to this aspiration.

How can we, as a nation, facilitate this growth? The Federal Government’s Innovation and Science Agenda released last December is the most substantial recognition we have seen that advanced manufacturing is the future face of Australian industry. The agenda pulls a number of policy “levers”, and places unprecedented emphasis on leveraging our research excellence for greater commercial outcomes.

Of all the interventions of governments, however, the defence procurement “lever” obliterates all others.

Manufacturing’s best hope lies in “flagship” projects like Australia’s future submarine and shipbuilding programs. Some economists have estimated the knowledge spillovers from such programs produce multiplier impacts 2–3 times the initial investment. For example, one study estimates the Gripen multi-role combat aircraft project in Sweden generated at least 2.6 times the government investment in terms of additional production, and skills and knowledge transfer. What large national projects can mean for jobs growth, technology diffusion, skills development and market development in the short term is important. What they mean in the longer term is critical.

“The digitisation revolution will be a key enabler for Australian manufacturers to enter the global supply chain – it conquers distance and helps bring ideas into production sooner.”

For the advancement of Australian industry, we must ensure that Australian companies are actively engaged in the high value technology creation and development of large defence contracts. And these companies must be able to sustain their businesses through exports. Denmark and Sweden provide good examples of countries successfully exporting their defence capabilities. If Australia does not do the same, we doom our high value defence manufacturers to the same fate as the automotive sector.

Technological change doesn’t just bring disruption; it also brings opportunity. The digitisation revolution will be a key enabler for Australian manufacturers to enter the global supply chain – it conquers distance and helps bring ideas into production sooner. Digitisation will enable Australian manufacturers to leap ahead of many of our competitor nations.

And embracing the digital age requires greater emphasis on STEM education. In many industries and countries, the most in-demand occupations or specialties did not exist 10 or even five years ago, and the pace of change is set to accelerate. By one popular estimate, 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.

With a thriving advanced manufacturing sector, employing a higher proportion of skilled engineers and scientists and successfully investing in research and development in order to stay at the leading edge in their sectors, we can ensure Australia’s continued prosperity.

John Pollaers, Chairman of the Australian Advanced Manufacturing Council

Read next: Vish Nandlall, Telstra’s Chief Technology Officer, on the skills we really need to be teaching our children.

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