While it is widely reported that Australian manufacturing is “out-dated” and on the decline, research suggests the public values the industry more than expected. Steven Impey reports.
Analysis around Australia’s attitude towards manufacturing has revealed a startling misconception about the industry.
Despite a culture that is consistently told that the sector is in decline, an investigation carried out by a team at the company, Research Now, suggests the public are not as lost on the value of making things as they are led to believe.
According to the Australian Bureau of Statistics, the sector invests more into research and development (R&D) than other industries across the nation.
Although it is underestimated in the public eye (many believe innovation in manufacturing is far behind that of scientific services, mining and the media), more than three quarters of the country agree exporting Australian-made products is key to a strong and stable economy.
“There are many paths to becoming a successful manufacturer in this country,” said Mark Goodsell, head of the Australian Industry (Ai) Group’s NSW branch.
“A lot of them are different from what they used to be – even those who have only been around for 10 years.
“When you talk to them, they will tell you they are much more different; that they are much more focused on the customer than their factory.
“That doesn’t mean they run poor factories but rather that being lean and having good machinery is now just the price to pay when entering into manufacturing.
“The real differentiate for success is about knowing which part of the chain you are good at where there may be less competition, and also really understanding the customer – which, in most cases, means knowing the customer better than the customer knows themselves.”
Manufacturing is changing
Speaking at the Manufacturing Matters summit at Parliament House, in Canberra, Goodsell was joined by a panel of industry experts, who discussed the issue of public perception around the sector.
“Most of the public would never know that we made components for the Mars Rover, for example, or even think that we were capable of doing so,” he said.
“They certainly know we can make cars because we have done that before but I want to make the point that there is still a lot of manufacturing success [in Australia].
“It is perhaps hidden away from the traditional public branding and, leading into a second point about our self image around manufacturing, there seems to be several different paths to success.”
One of the research’s findings that stood out relates to a misapprehension that manufacturing is “out-dated” – with more than half of its respondents (55 per cent) saying they disagree with the statement.
“Manufacturing production is no longer the same,” said Dr Jens Goennemann, managing director at the Advanced Manufacturing Growth Centre (AMGC). “To be a manufacturer in Australia, you have to be competitive.
“To avoid the drop and to sustain our lifestyle – which does not support manufacturing – you need to be better than anybody else and means you need to serve a market of seven billion and not only 25 million.
“If, as a nation, we transform the opportunity our manufacturing has to offer by moving away from production and offering smarter services, only then can we send something clever from this wonderful country into the world.”
In general, the majority of older respondents agreed that manufacturing growth requires government policy and that exports are necessary for success in trade.
Meanwhile, younger respondents were more likely to agree that the industry is in an inevitable decline and therefore government support isn’t necessary.
Dr Jill Sheppard, who works at the Centre for Social Research and Methods, based at the Australian National University, presented some of her own findings.
“Public opinion towards manufacturing in Australia is understudied,” she said.
“We got this data back and we asked people whether they agree or disagree that we rely too heavily on foreign imports.
“I expected the results to be fairly partisan but, [when] we started to break it down, we found that there are some weak spots. There is incredibly wide and robust support for manufacturing in Australia and there are both weaknesses and challenges.”
She calls it a “generational softness”, explained largely by those university graduates who are “not conditioned” to look to manufacturing as a realistic career prospect.
“There is a real opportunity here of how manufacturing industries frame manufacturing as a thriving and prosperous industry of the future,” Dr Sheppard continued.
“This is a contrast from potentially what we see in intergenerational replacement – as the older generations die out, they are being replaced by younger generations who don’t expect to work in manufacturing.
“If we take that as being a fact, it does tend to contrast with other intergenerational trends that you see away from materialist perceptions of the world – towards post-materialist attitudes that emphasises environmental sustainability and the luxuries of social progressiveness.
“In terms of framing manufacturing, I think there is definitely an opportunity there to frame it as something that aims to those post-materialist roles, including environmental sustainability and technology efficiency.”
“Manufacturing should be differentiated”
Despite a generational split, the poll shows that 78 per cent of people think that, in the long run, manufacturing will only succeed if it is shown government support.
“Traditional political leverage has been dropped and has pretty much undifferentiated jobs,” Goodsell said. “The manufacturing industry has said for a long time that we’ve got better jobs and have good value.”
But that’s where his view of the industry differs from the current status quo.
“It is reasonably feasible to argue against that however,” Goodsell explained. “The boundaries between manufacturing and other sectors are really breaking down these days
“Typically, the model of success shows that successful manufacturing companies are now making more money out of the services they provide than the goods they produce.
“We ought to take it upon ourselves to present manufacturing as part of the solutions for those kinds of problems, which may challenge our traditional way of thinking but that is not a bad thing.”
Over the years of public policy debates, Goodsell insists there are too many manufacturers telling the government what it should do to guide the industry to better days.
Yet, he explains there is too few who say what they are prepared to do to get there and are the people worth listening to.
Replenishing lost workforce
In contrast to the apparent optimism in the public realm, there is concern that the loss of jobs within the manufacturing sector won’t necessarily mean other industries will welcome them with open arms.
On the subject of workforce, only 19 per cent of respondents agreed other industries would naturally create positions for out-of-work manufacturers.
“Our responsibility is to build for the next generation of Australian workers and their families, which is really what this conversation is about,” said Scott Connolly, assistant secretary at the Australian Council of Trade Unions (ACTU).
“If you look at what’s happening in our economy, we have got over a million workers unemployed or underemployed; record low-wages growth, record levels of youth unemployment; unprecedented levels of insecurity, casualisation and uncertainty among our labour market in particular.
“We believe that securing a sustainable future for our manufacturing-related industries has really never been more important. Not just to workers in that sector or related sectors, but much broader in society.”
He described the steel suburb of Doveton, in the southeast of Melbourne, as an example that is now, after 30 years of economic reform, a “shadow of the place it used to be”.
“The factories have all but gone and 7,500 jobs have been reduced to a few hundred,” Connolly said.
“It is critical to see how we got here – both in terms of our collective history on the back of thousands of manufacturing jobs that have built this country across generations and also how we imagine our country to be going forward.
“One where growth is sustainable, more fair and where workers can get decent jobs where we have stable communities and social cohesion.
“We can’t do that without the manufacturing sector. We don’t have to look far to see what it can do for our communities.”