South Australians want their state to become a world-class centre for advanced manufacturing in the wake of the Holden factory closure, according to a new BankSA study.
Based on a statewide phone survey of 300 South Australian consumers and 300 small business owners, the BankSA study asked participants what industries are best pursued to modernise the state’s economy.
Topping the list, 81 per cent of South Australian consumers believe the pursuit of new advanced manufacturing industries is the best way to transition the state’s economy, rating it ahead of other industries including premium food, software development and renewable energy.
In addition, 77 per cent of consumers want to develop an advanced manufacturing bio-medical industry for the production of pharmaceuticals and other medical products, while 87 per cent of South Australian business owners want to produce graduates and workers skilled in advanced manufacturing to help develop a new homegrown industry.
The survey results coincide with the release of BankSA’s Trends economic bulletin, which examines the future of South Australia’s manufacturing industry following the closure of Holden’s Elizabeth plant.
Compiled in conjunction with Deloitte Access Economics, the report says that while South Australia may not be able to compete with Asia on wage costs for manufacturing, the state can compete on ideas and innovation as it transitions from traditional to advanced manufacturing.
Trends reports that the state’s established technical skills base, developed over many years through its automotive and defence sectors, provides a solid platform for new and existing manufacturers to grow and invest in their businesses.
BankSA Chief Executive, Nick Reade, said while it has been a tough decade for South Australia’s manufacturing industry, with around 20,000 job losses since the global financial crisis, there is cause for optimism.
“Manufacturing still comprises a significant share of economic activity in this state and accounts for approximately one in 11 jobs. In fact, around 70,000 South Australians are still employed in the sector today,” Reade said.
“Food and beverage product manufacturing remains a shining light, with the sub-sector accounting for one in three manufacturing jobs in the state.
“In fact, the premium quality and popularity of South Australian produce offers the sector protection from globalisation, and promises an even brighter export future to an increasingly affluent Asian market.”
The Trends bulletin also reports that defence manufacturing will continue as a good news story in South Australia over the next decade.
“Already South Australia contains a quarter of the nation’s specialist defence businesses, and is the beneficiary of 32% of the country’s defence spend,” said Mr Reade.
“Excitingly, the $35 billion Future Frigates Program and the $50 billion Future Submarines Program will generate thousands of new jobs over the next ten years and help entrench the state as a defence powerhouse.”
Trends reports that with developed economies set to continue to struggle with wage cost competitiveness at a global level, ideas will likely become a key competitive component, which could favour South Australia.
Reade said the state is already progressing as an innovation hub, including Technology Park Adelaide which comprises more than 85 co-located bioscience and technology companies, while South Australia is rapidly earning an impressive reputation in advanced medical manufacturing through SAHMRI and the new Royal Adelaide Hospital.
“So the transition from traditional to advanced manufacturing is certainly underway, and while we may not be able to compete with Asia on costs, we can compete on ideas and innovation,” said Reade.
“Given our strong skills base and cost-competitiveness relative to other states as well, South Australia is well placed to seize on growth opportunities in the advanced manufacturing sector.
“It’s now up to South Australia to rise to the challenge.”