Unlocking the global supply chain to Australia’s manufacturers is key to industry growth. However, striking the right government policy is essential and requires two-way communications. Steven Impey investigates.
Embracing a greater demand for productivity within a growing industry, law and government policy tend to lead the charge.
That said, it doesn’t mean that the industry player doesn’t have a say. They do, and the Federal Government is actively encouraging businesses – small, medium or large – to express themselves.
To increase productivity on the factory floor, the modern-day manufacturer is being told that it needs to adopt new technology.
Industry innovators – those who challenge the traditional methods of manufacturing, including the rules they play by – are the ones setting the tone.
The appeal of automation is accelerating, according to International Federation of Robotics, which is projecting more than 1.7 million new industrial robots will be introduced to the industry by 2020.
However, with all the focus on how to better improve the efficiency of an individual assembly line, this effort is only beneficial if the supplier has the demand for production.
To meet demand, manufacturers are also encouraged to promote their theories and ideas to, not only place commercial goods on the market, but also question the current framework that grants them passage to the world.
Changing the law
The industry’s ability to adapt policy and change law was a topic of conversation during a roundtable event recently held at the University of Technology Sydney’s business school, where members of Australia’s manufacturing industry discussed its potential.
Graham Wren, a guest speaker from Scotland, is a leading expert in industry strategy and manufacturing, and has represented the UK Government on committees such as the Organisation for Economic Co-operation (OECD) and the National Environment Agency (NEA).
“Without an industrial strategy, essentially the market decides what to do,” Wren said.
“The first thing the government has looked at is that ‘triple helix’ [between government, industry and academia] and how policy can drive economic growth.
“How do you align that industry demand with what the universities can supply and use policy to make industry successful? This alignment is really crucial and, if you can’t give that a go, you are going to end up with regional or small-scale activity.”
As industry evolves, the relationship with its government therefore adapts too and has been seen throughout modern history.
In the 1970s, German company Pilz fought to change the law to include safety policy for electronics and automated manufacturing in addition to mechanics, which it was historically known for.
Speaking with Manufacturers’ Monthly, Pilz CEO and managing partner, Renate Pilz, revealed the lengths the company had to go to, to increase the scope of what safety encompasses across the automation industry and the difficulties they experienced getting it over the line.
“Automation had become an important part in our lives, so we wanted to make automation safe,” Pilz said. “We saw that it was very important and, at that time, we were not allowed to make safety part of electronics. It was only allowed for mechanics.”
Pilz had to go directly to the German government to convince them and, after persistence, achieved a change to national policy around safety, which has since become a global movement.
“It was a long development,” she continued. “I remember when we came to Australia in the 1990s, the government said that it was going to roll out the red carpet [for us] because safety is an important part of automation.
“This is in our heart and it makes our business important. We are human driven and I am often asked whether it is sad for us to see that our competitors are now adopting safety in business, too.
“I always say ‘no’ because it is so important that safety is part of automation. There are people behind it and it makes our business unique, so we always wanted to educate the market in different countries.”
Role of the Catapult
In the 21st century, Wren insists industry still has the power to strengthen national and international law.
As an example in Europe, he explains that distinguishing the difference between high and low levels of future waste generation could present industry with an opportunity post-Brexit, and one that could save the UK up to £6 billion (A$10.4 billion).
“High-level waste is fuel, which generates heat for a long time, while low-level waste includes things like banana skins,” Wren said. “In Europe, those two categories are conflated into one and, if you separate those and say that the neutron-generated waste could be categorised as low-level [waste] in 30 years time, you could save [money].
“That’s an idea where the industry could say to the government that, if it changes the rules post-Brexit, you could save a lot of money and here is the evidence.
“You have to ask why the rule is there. It has probably been there for 40 to 50 years and set up at a time when we didn’t understand it. But things are different now and you can have any rules that you want.”
In Australia, similarities in industry models with the UK are there, Wren continues, in the sense that both nations own high-quality research universities, which can be positioned to better impact the economy.
“Part of that is this thing we call the Valley of Death,” he said. “In the UK, we used to have large companies which had in-house research and could engage with universities and suck in that technology.
“Since the opening of the market in the 1970s, most of them have gone and they are stranded and can’t get to the research in the universities.
“So, we have spent a lot of time creating ways to coordinate an approach towards translational research.”
Out from the mist came industry centres that, in the UK, are dubbed as “Catapults”.
“As we pursue an ambitious industrial strategy and try to navigate the uncertainty of Brexit, Catapult Centres play an important role in anchoring high-value manufacturing activities in the UK,” Wren explained.
“Industry is slowing down investment for obvious reasons – because we are worried about what Brexit means and how we are going to trade with Europe – and that prop is partly to do with that Catapult network.”
Catapults are essentially technological spokes – each one owning a focus or expertise, whether that is machining, welding, materials; focal points that the industry can engage with.
In Australia, the government implemented the National Business Simplification Initiative (NBSI), which is a Commonwealth agreement between federal, state and territory governments to work together to make it simpler to do business in Australia.
The purpose of the NBSI is to ensure businesses can focus on growth, creating more jobs and developing new products and market opportunities by addressing the burden of unnecessary regulation, particularly where there is duplication across federal, state and local government levels.
The initiative aims to help businesses save time and money, allowing them to focus on their businesses and families rather than on coping with overly complex government processes and regulations.
“The NBSI is designed to make doing business simpler,” an industry department spokesperson said, “removing the barriers to spawn new business creation, which in turn allows innovation to flourish and most importantly, creates more jobs in manufacturing.”
Similar to the UK’s Catapult Centres, the Australian government has also established its own industry-led Growth Centres, designed and proven to bridge the gap between industry, researchers and government policy; stimulating innovation and R&D, as well as positioning Australia as an innovative economy.
For example, METS Ignited and National Energy Resources Australia (NERA), two resource-related Growth Centres, are working collaboratively with governments and industry to develop a regulatory reform roadmap.
The roadmap will identify options to optimise the regulatory environment to promote growth of the resources sector without compromising important environmental, safety or social licence objectives of the framework.
At the Advanced Manufacturing Growth Centre (AMGC), its conviction is to give the Australian government a sound policy framework, which spurs job growth through innovation at the Australian SME level.
“After all, we are a nation of predominantly small and medium size manufacturing companies, and this is where, by sheer numbers, most of our opportunities reside,” said Dr Jens Goennemann, AMGC managing director.
“Therefore, effective policies must support these businesses that invest and take risks to achieve commercial returns.”
The Australian manufacturing industry is a “vibrant ecosystem”, according to Goennemann, which employs one in 10 workers.
Manufacturers export close to $9 billion per month, and contribute 7 per cent to the nation’s GDP.
“To maintain our sector’s overall health, we work closely with federal and state governments on regulatory reform and policy alignment,” Goennemann continued.
“Through ongoing industry consultations, we identify unnecessary red tape, or alternatively, spotlight where regulatory standards and assessments can be refined and strengthened.”
A recent example is the AMGC’s submission to the Innovation Science Agenda 2030.
In this paper, the AMGC advises the government on ways to nourish Australia’s innovation culture, assist with company succession planning and address skills gaps where they exist.
Tailoring policies to reflect current business needs and shifts in the international landscape is an ongoing conversation.
“We openly invite interest from manufacturing companies who have views on how to better unlock their creativity and forge profitable connections into global supply chains,” Goennemann said.
“Companies are best placed to call out where policies can improve, and through our experience, governments are ready to relieve the burden when the evidence is clear where regulations impede competitiveness.”