Having just participated in the AusMedtech conference, I’m excited by the opportunities for companies in the Australian medical technologies, biotechnologies and pharmaceuticals (MTP) sector to establish and grow manufacturing operations in Australia.
Over the course of the pandemic, we have seen many of these companies face huge challenges, overcoming supply chain disruptions and contributing to the development of life-saving diagnostics, therapies and vaccines for COVID-19. Indeed, as Australia continues to emerge from the pandemic, it’s clear that Australian MTP companies are already playing a growing role in revitalising our manufacturing ecosystem and growing our economy. The ultimate size of this role, however, will largely be determined by those companies’ ability to embrace contemporary manufacturing technologies, capitalise on sovereign manufacturing opportunities, access appropriate capital and leverage current and proposed government investment in research and development (R&D) infrastructure and innovation support programs.
Industry 4.0 adoption is delivering competitive advantages and driving investment worldwide
Globally, manufacturers are adopting Industry 4.0 enabling technologies to drive innovation, decrease costs and improve quality and efficiency. Within the MTP sector internationally, manufacturers are investing in smart factories and embracing automation, artificial intelligence and the Internet of Things to transform operations and build supply chain resilience.
In addition to the adoption of mature Industry 4.0 technologies, there’s been an increase in venture capital (VC) investment in emerging industrial ventures. Last year was a record year, both by value and number of transactions, for VC investment in manufacturing start-ups. This was predominantly led by the US and China .
When you consider these global trends, and as policies and initiatives shift to focus on building health and economic resilience, how can we work to ensure Australia is able to capitalise on MTP manufacturing opportunities?
Australia is seeking to become more self-reliant
We are living in a world facing increased socio-economic and environmental uncertainty. To address the challenges of the future, Australia is looking to develop greater manufacturing self-reliance.
And a key point of focus is ensuring we have the capability and capacity to manufacture essential items like medicines and medical equipment.
For example, the government’s strategic partnership with Moderna represents a significant investment in our domestic vaccine manufacturing capability.
The agreement will support the annual production of 100 million Melbourne-made mRNA vaccine doses and generate hundreds of high skilled jobs.
More broadly, the partnership will contribute to the growth of Australia’s biotechnology sector by establishing local supply chains, clinical trials and R&D.
To accelerate the journey towards greater self-reliance, it’s important more MTP global enterprises are incentivised to establish manufacturing operations in Australia, creating valuable collaboration and supply chain opportunities for local MTP small to medium enterprises (SMEs).
Australia’s manufacturing innovation ecosystem is being primed for growth
In addition to direct investments, the previous Australian Government recently announced a steady stream of grants and incentives designed to build manufacturing capability.
There was the $1.5 billion Modern Manufacturing Strategy, which, among other things, is stimulating the research ecosystem, and a host of new programs enabled by the $2.2 billion University Research Commercialisation Action Plan (Action Plan).
The Action Plan is designed to catalyse university innovation and industry collaboration. Its initiatives include Australia’s Economic Accelerator, the introduction of a National Industry PhD Program, the expansion of CSIRO’s VC arm, Main Sequence Ventures, and the establishment of the Trailblazer Universities Program.
The new Australian Government has similarly identified manufacturing as a priority, and has announced $1 billion investment funds for advanced manufacturing and critical technologies (e.g., artificial intelligence, robotics and quantum computing).
There are also a raft of State Government initiatives that invest in catalysing innovation. A recent example being Breakthrough Victoria, a $2 billion fund directed at investing in priority sectors, including advanced manufacturing.
Together, these grants and incentives represent billions of dollars of investment into R&D and commercialisation, which local MTP Companies can tap into in order to catalyse growth.
In an ideal world we would have more effective coordination of Australia’s manufacturing innovation ecosystem at a national scale, something akin to the UK’s Catapult Network, and more government procurement of locally manufactured MTP products, but these Government initiatives still represent a step in the right direction.
Along with Government initiatives, we are also seeing Australia’s superannuation funds take advantage of investment opportunities in Australia’s growing innovation and start-up sector. Only a few months ago, Unisuper announced it had committed $75 million to early-stage commercialisation fund manager Uniseed.
But it’s important to note that Government and superannuation funds can’t do all the investment on their own. For Australia to grow its MTP manufacturing sector to its full potential, we also need to further develop our local Angel and VC capacity, particularly that suited to investing in opportunities comprising industrial ‘hardware-based’ inventions and/or establishing Australian manufacturing operations.
Catalysing world-class manufacturing innovation
As an organisation operating at the intersection between industry and research, the Innovative Manufacturing CRC (IMCRC) has facilitated R&D that underlies ground-breaking Australian medical innovations.
From patient-specific, 3D-printed bone implants by Stryker to needle-free vaccines by Vaxxas, some of our industry participants stand poised to commercialise locally made MTP products of significant benefit to Australia and the world.
What we have experienced at IMCRC is that with the right collaboration and investment, Australian MTP companies can successfully adopt and utilise Industry 4.0 to establish manufacturing capability leading to high-value products and services, jobs and security.
A good example of this is IMCRC’s partnership with global medical technology organisation Stryker.
In 2017, Stryker and five leading research organisations embarked on a five-year R&D project to develop a revolutionary treatment for bone cancers using 3D printing and robotic surgery.
Stryker found the collaboration to be so beneficial to its innovation pipeline that it committed to establishing its first Australian R&D facility.
The facility will unite researchers, clinicians and advanced manufacturers to accelerate Stryker’s R&D initiatives and help establish Australia as a world leader in medtech innovation, digital health, design and manufacturing.
In addition to supporting global enterprise manufacturers, IMCRC has enabled many of our SME partners to realise the benefits of short-term, high-impact R&D.
In 2020, IMCRC partnered with Alcolizer to advance the design of its COVID-19 saliva test prototype. By creating a timely and efficient approval process and implementing a milestone-based framework, IMCRC was able to help Alcolizer move from testing to a commercial prototype in only six months.
Upon conclusion of the project, Alcolizer secured additional funding from the Australian Government to scale up its Perth-based manufacturing operations to support mass production of the test.
As IMCRC draws to a close at the end of 2022, it is heartening to see Australia moving towards a more innovative MTP manufacturing ecosystem through the adoption of Industry 4.0 technologies. By embracing new manufacturing technologies, R&D collaboration, Government investment in innovation and sovereign manufacturing opportunities, Australian MTP companies now more than ever have an opportunity to establish and scale up manufacturing and spearhead the development of a globally competitive and resilient MTP manufacturing sector of significant social and economic benefit to the nation.
For more information on IMCRC, click here.