Supporting Industry 4.0 growth in Australia

Australian Industry Group chief executive Innes Willox. Photo credit: Ai Group.

Ai Group is leading an Industry 4.0 forum, which looks at the challenges, benefits and future of technology in Australia.

Industry 4.0 is not just for the “big end of town”, explains Australian Industry Group (Ai Group) chief executive Innes Willox. Helping businesses small and large adopt Industry 4.0 to benefit them and the greater Australian economy, is something Willox and other members of the Industry 4.0 Advanced Manufacturing Forum take seriously.

“While some manufacturers are progressing well with the uptake of new technologies, others are still grappling with the Industry 4.0 concept and its potential.

“The increasing frequency of reports of skills shortages relating to the adoption of Industry 4.0 approaches suggests that current capacity is constrained. But more encouragingly, it also points to an increased pace of adoption and further diffusion of Industry 4.0 beyond early adopters,” said Willox.

READ: Ai Group gets funding for Industry 4.0 apprenticeship program

To grow the number of manufacturers, and other companies in Australia, adopting the latest technology, the forum, also known as I4AMF, is working with the leader of Industry 4.0, Germany. In September 2018, Ai Group took charge of a collaborative forum of industry leaders and organisations to support Australian industry transformation.

I4AMF is the successor of the Prime Minister’s Industry 4.0 Taskforce, which formalised information sharing and collaboration between Australia and Germany on Industry 4.0. In April 2017, the Prime Minister’s taskforce signed a cooperation agreement with Germany’s Plattform Industrie 4.0, making Australia one of only five countries with cooperative agreements with Germany at the time.

Having followed on from the taskforce, I4AMF is a platform for influential players in Australia’s manufacturing sector to improve Industry 4.0 capabilities in Australia for all. The forum promotes collaboration between government and industry in both countries on Industry 4.0, including initiating a collaborative approach to the development of global Industry 4.0 standards.

The forum executive council consists of Willox, Siemens Australia and New Zealand chairman Jeff Connolly, Engineers Australia national president Trish White, and Advanced Manufacturing Growth Centre managing director Jens Goennemann.

Challenges faced by businesses

Ai Group hears from both end users and suppliers experiencing challenges in developing and implementing a real business case that focusses on digital technologies. “This is harder where skills or knowledge of industry 4.0 are thin,” said Willox.

Constraints identified by Ai Group members include not having the time to assess digital technologies to know what’s relevant to them and what the benefits may be. As well as, not knowing where to start or what others are doing to determine the benchmark. Additionally, members are concerned about the speed of change making it hard to keep up and adapt, even for innovative manufacturers.

The results of Ai Group’s recent Workforce Development Needs survey indicated that 62 per cent of respondents to the survey believe a lack of leadership and management skills is having a high impact on the business.

“Not only are employers experiencing greater challenges finding the skills they need, but for the first time, shortages were reported for key Industry 4.0 skills of business automation, big data and artificial intelligence solutions,” said Willox.

The survey underscores the importance of leadership and management capability for successful business transition to the digital economy, he said. “As businesses adapt to new technologies and the changed conditions under which business is done, they are facing new demands on their workforce capabilities and cultures. It is evident from our report that employers are prioritising managers for digital skills training followed by technicians and trade workers, professionals, and administration staff.”

Survey participants indicated that employers are still experiencing difficulties recruiting employees with science, technology, engineering, and mathematics (STEM) skills – particularly technicians, trades workers and professionals. At 52 per cent, the percentage of employers intending to increase expenditure on training in 2018 was the highest since Ai Group began the survey in 2012. Employers also expressed high levels of satisfaction with the digital capabilities of recruited school leavers from all education and training sectors.

Willox said that rapid and extensive changes in the nature of work resulting from Industry 4.0 are creating concern about jobs being at risk from digital disruption. “This is intensifying as the share of routine process jobs in our economy declines and while employment requiring non-routine cognitive skills, and to a lesser extent non-routine manual skills, has grown.”

Goals and successes

Some recent analysis casts a more positive light on concerns of job loss and disruption. The Mapping Australia Workforce Change report suggests that areas of employment experiencing faster change in tasks are less likely to experience higher rates of job loss.

The report indicated that on average, Australian jobs have experienced a 9.3 per cent change in tasks over the past five years – this includes introduction of new tasks and a reallocation of workers’ time across existing tasks. Jobs that involved the most task-level changes were the most secure. Lower skill jobs experienced less change in tasks than higher skilled jobs.

“We can infer from this that by adapting jobs to new technologies and processes, businesses and workers may be able to avoid job losses and closures,” said Willox.

“Key to accelerating the diffusion of Industry 4.0 is ensuring there is a sufficient and growing supply of appropriately skilled people for businesses to draw on as they embrace Industry 4.0.  This involves industry and education and training organisations working closely to design and develop an appropriate range of training opportunities both for the existing and future workforce,” he said.

Ai Group suggests coming up with ways of engaging with research organisations and university students, such as through micro-placements, online projects, ‘hackathons’, incubators, student consulting services, internships, and co-funded researcher placements to boost business innovation.

The Innovation Connections element of the Australian government’s Entrepreneurs’’ Programme encourages and assists eligible SMEs to access knowledge, engage with researchers and foster innovation. Matched funding of up to $50,000 is available for research projects.

Other programs, driven by industry leaders are also helping businesses engage with Industry 4.0. The Industry 4.0 Higher Apprenticeships project, a partnership between Siemens, Swinburne and Ai Group, gives 20 candidates the opportunity to study full-time at Swinburne’s Hawthorn campus for 22 weeks, along with experiencing 26 weeks of hands-on training at Siemens.

Willox said it has been overwhelmingly successful and has generated significant interest across the country. Further rollout is planned for 2019 and Ai Group is currently working with state governments, companies and sourcing candidates to help this get underway.

 Making progress with collaboration

Ai Group is putting Industry 4.0 and industry transformation at the core of its work with member businesses and stakeholders. It offers members online resources and connections on Industry 4.0, skills development and more, designed to develop industry 4.0 capability and strategy inside each business.

The collaboration is bringing people from universities, to manufacturing companies and organisations together. Members of I4AMF include Standards Australia CEO Bronwyn Evans, AustCyber CEO Michelle Price, Innovative Manufacturing CRC CEO David Chuter, Swinburne University of Technology deputy vice-chancellor Aleksandar Subic, and Australian Manufacturing Workers Union national president Andrew Dettmer.