AUSTRALIA still has a place in manufacturing despite big shifts to China and India in the last decade, according to industry advisory firm Deloitte.
Hans Roehm, from the global manufacturing partner of Deloitte’s manufacturing group, said developed countries were still well placed to make goods such as ships, planes or cars that were carrying more software and electronics.
Roehm, who is visiting Australia from Stuttgart, Germany, believes there will be two-way development between the low-cost manufacturing countries and the complex, system-driven manufacturing systems in Australia and developed European countries.
“Low-cost labour is clearly an advantage for mass production and simplified production like textiles, but the tendency within low-cost production is that the (manufacturing) plants will be shifted rather than stay in one place,” he said.
Roehm said manufacturers in China had benefited for a long time from low-cost production, but even in China costs were rising, forcing some manufacturers to move away from the eastern coastal cities to western inland regions, or to other countries such as Vietnam.
He also said that for countries such as Australia to secure a future in high-end manufacturing, they needed to create the appropriate infrastructure for innovation and product development.
“You don’t want to get rid of an automotive industry because it generates so much innovation,” he said.
Roehm said the global manufacturing sector was growing faster than population growth but higher prices for oil, steel and food could slow down expansion in the sector.
He said manufacturers in all the countries he had visited had not disputed the need to cut carbon emissions but discussion revolved around how fast, which direction and by what means.
“Government has to make sure that it is creating fair competition and not costing industry,” Mr Roehm said.
“But the industry responsibility is to look at the upside of it … if you want to attract the talent of Generation X and Generation Y, you need to offer a positive strategy.”