MANUFACTURING IN AUSTRALIA – A DYING ART?

Australia is in a unique position.

The classic argument centres on the principle that within Australia the manufacturing sector is unable to achieve economies of scale in mass-production like we see in India and China. Indeed this places doubt on the future of manufacturing in this southern land. Can manufacturing continue and perhaps more pertinent to the argument, can manufacturing be profitable.

There has been a steady decline in the manufacturing sector in Australia since the 1970’s. Professor Jeff Borland of the University of Melbourne has found that over the past four decades up to 400,000 jobs have been lost within the sector which paints a grim picture for manufacturing. However, not all is bad news.

Large companies like Boeing and BAE Systems have been able to achieve both innovative and profitable results through the manufacturing of highly technical products for both the commercial aviation and defence sectors in Australia. For example, Boeing Australia has been able to generate approximately $400 million dollars in export revenue for Australia and continues to place Australia at the centre of its global supply chain for the Boeing 787 Dreamliner. With this a polarization of the argument is apparent – we are not able to achieve economies of scale whilst at the same time we are able to compliment the global supply chain of high value products.

So, where to for Australian manufacturing?

The future for Australian manufacturing lies in finding a balance – what is meant here is that we must leave low cost manufacturing to those that can achieve economies of scale (like Tata in India), whilst at the same time leaving research and development to those who can afford it (like Apple in the USA). Australia must become an intermediary; its role centres around being a link in the global supply chain for large global players. We have a serious competitive advantage in high skilled manufacturing with a largely skilled workforce. Australia presents itself as an attractive prospect for companies seeking stability and effective manufacturing of the ‘difficult to manufacture.’ We should not try imitate other nations, Australia is unique, and with this our manufacturing industry has a unique place in the global business landscape.