Endeavour Awards 2016, keynote speech: Competitiveness in Australian Advanced Manufacturing: building on current momentum

Tonight is the 13th Endeavour Awards Gala. An auspicious number and it comes at a time which I consider to be a turning point for advanced manufacturing in Australia.

Let’s look around the room.

Tonight, we have the strongest field of manufacturers vying for a category win, and we have more nominees that last year – in fact than any other year.

Better still, we have strong manufacturing companies celebrating leadership and achievement in a vital sector of our economy.

We have early-starters and well-established businesses. Our sector is vibrant and this is good news.

And let’s look at the manufacturing numbers across the economy:

 The Australian manufacturing sector grew in April for the tenth consecutive month (according to Ai Group), the longest period of expansion since September 2006. This is more than green-shoots. This is confidence in the sector’s outlook.

 And since 2006, our manufacturing export [nominal] value has grown by 40%. In fact, over the past 12 months this sector has just about hit or exceeded $8 B per month in exports.

 We are the 4th largest sector in the economy, and 3rd largest employer.

 And in Innovation — the manufacturing sector continues to file more patents and invest more in R&D than any other sector in our economy.

So current momentum is good – but is it only the exchange rate that has made the difference? Let’s look at what is happening to Competition in our Industry: 12 May, 2016

We know that things have changed – in some cases dramatically:

 Competition has shifted from a national focus to become global in nature

 The world is no longer dictated by a shortage of goods – we enjoy a surplus of choice

 Because of this, Customers are expecting more specialised, customised products than ever;

 Product characteristics and value have moved from the tangible to the intangible

And as a result, Manufacturers today differentiate their products and their businesses with Innovation – not Price.

Welcome to the Era of the Advanced Manufacturer.

We’re talking about:

• High value, short run, specialised products

• Design-led, customised production with high intellectual property content

• Intense customer relationships with unprecedented before and after sales service, and as mentioned previously

• Competing on value, not price.

And here at Manufacturing Week, and at these important Awards, we have many wonderful examples, both well established and just taking flight.

As the Chairman of the Advanced Manufacturing Growth Centre, I have seen firsthand the opportunity and the optimism amongst world leading Australian manufacturing businesses.

As part of establishing the Advanced Manufacturing Growth Centre, we conducted an intensive consultation process with more than 80 manufacturing companies assessing what would help them to compete more effectively in this Era of the Advanced Manufacturer. And a number of these companies are here tonight, and I thank them for their candid views.

The priorities were clear.

First – help us to engage with International Value Chains and through these, international markets.

80 out of the 80 manufacturers consulted, including a number of Australia’s world-leading, advanced manufacturers rated integration with global value chains, and through them access to global markets, as priority number one in the competitive context looking from 2016 towards 2030.

On this point, when the OECD published its report on “Australian manufacturing in the global economy” in 2012, it concluded that “indices on intra-industry trade point to a lower and decreasing integration of Australia into production networks organised on a global scale”.

The companies we consulted told us of the next three priorities.

Second – on managerial and workplace skills – the need is for greater flexibility and mobility of key specialist functions.

Third – they seek stronger collaboration and engagement with research institutions and industry, and within industry, to help them to commercialise ideas. Surprisingly, 78 out of 80 manufacturing companies told us that they had “given up trying to collaborate with research organisations” and had brought their R&D in house by hiring PHDs. Given the level of Commonwealth and State funding of Research in Australia, this simply must be changed.

The Fourth priority was the removal of unnecessary and burdensome regulations. The clear emphasis here was on removal of export market entry restrictions in overseas markets.

These priorities are precisely what we are focusing on at the AMGC – to help you compete more successfully and powerfully. To build on your current momentum.

We are all about connecting Australian manufacturers to global supply chain operators and their global markets. For the companies that work with us, we will bring together the big and small players to conduct design-led projects – projects which will forge partnerships and generate orders.

AMGC has strong Commonwealth Government support, but are Industry-led – we want to work with passionate and ambitious manufacturing firms large and small. We will facilitate engagement and collaboration on specific programs and projects.

In short, we have the opportunity of a generation in our hands. The opportunity to work collaboratively to create our own future in the era of the Advanced Manufacturer. It’s time to stand up and be counted.

I want to acknowledge the amazing work of Manufacturing Monthly over many years and the various sponsors and supporters of these awards for 13 years, who have committed yourselves to promoting the vital role of manufacturing in Australia’s future prosperity.

Today your hard work is taking place in an environment of support and encouragement, backed up by real resources and policy action.

Let me conclude by saying that Australia needs you to succeed.

You are the proof that Australia has the talent, the resources, the ambition, and the smarts.

We’ve turned a corner in manufacturing, our mindset is clear, global competitiveness is within our grasp.

I congratulate all the nominees tonight and everyone who has made the winners what that have become.

Enjoy the celebration – and take pride in your role in building Australia’s future.

 

Andrew Stevens is Chair, Advanced Manufacturing Growth Centre. The vision for the Advanced Manufacturing Growth Centre is to develop an internationally competitive, dynamic and thriving Australian advanced manufacturing sector that is critical to the long-term health of the economy and the nation. For more information, click here.

The above was the keynote address at Manufacturers’ Monthly’s 13th annual Endeavour Awards, held May 12 at the Novotel Sydney Olympic Park.