Manufacturers’ Monthly sat down with managing director of the Advanced Manufacturing Growth Centre (AMGC) Dr Jens Goennemann to break down the Northern Territory’s Advanced Manufacturing Ecosystem Fund and this year’s federal budget.
The budget announced in May was the first-full Labor budget handed down in 10 years and it will see a widening of support provided to small to medium-sized manufacturers according to AMGC.
Through matched funding and mentorship, Australia’s new Industry Growth Program has the potential to expand the pipeline of investment-ready projects for the $15 billion National Reconstruction Fund to consider in coming years.
Through loans, guarantees and equity investments, the National Reconstruction Fund will partner with the private sector to invest in priority areas that leverage Australia’s natural advantages and strategic priorities in renewables and low emissions technologies, medical science, transport, value add in agriculture, forestry, and fisheries, value add in resources, defence capability and enabling capabilities.
Utilising Australia’s natural resources for the manufacturing industry is something that Goennemann believes can make Australia competitive on a global scale.
“I will encourage every Australian government, past, present or future to focus on areas of strength that we have or areas of strength that we want to have,” Goennemann said.
“We have one of the strongest health systems and that came from choices made by government, they should be utilising a similar framework for the country’s manufacturing capabilities.”
Goennemann states that as an industry, manufacturing should look to leverage the abundance of natural resources available to grow itself.
AMGC has identified and advocated for a need to support small businesses as they enter the Industry Growth Program and later the National Reconstruction Fund to prepare them for success.
“The projects announced in this budget will take time to deliver,” Goennemann noted.
“For this budget to see a reallocation of funds, for example, from the Entrepreneurs’ Programme to an Industry Growth Program, gives the government the opportunity to curate companies to be investment ready including but not limited to manufacturers for them later to be picked up by the National Reconstruction Fund.
“The National Reconstruction Fund, just by sheer size of its organisation will struggle to reach SMEs. We believe the IGP offers an opportunity to get manufacturers investment ready and absorb the larger funds that will flow from the NRF, how that will look remains to be seen but I anticipate AMGC could play a role in helping to maximise the impact of the program,” Goennemann explained.
“The realities of the industry structure in Australia are that we have 47,000 manufacturers and around 90 per cent employ less than 20 people. It will take time for them to be ready to take a cheque from the National Reconstruction Fund and we already support some that may.”
In September 2021, the Northern Territory Government partnered with the AMGC to launch a $7.5 million Advanced Manufacturing Ecosystem Fund (AMEF), in response to local manufacturing successes in the Territory.
The Fund delivers on the recommendations from the Territory Economic Reconstruction Report and will leverage AMGC’s experience in successfully increasing Australia’s manufacturing capability. With a focus on expanding manufacturing in the Northern Territory, co-investments will target local projects that seek to:
- Grow an advanced manufacturing ecosystem and capability in the Northern Territory across the Territory’s priority sectors; and
- Increase investment in advanced manufacturing activity in the Northern Territory, and secure a greater number of advanced manufacturing jobs located in the NT.
- Commercialise new products and processes, including transitioning a new product or process from pilot/ prototype stage to full commercial operations; and/or
- Support early-stage small scale and pilot research projects in advanced manufacturing, allowing them to more quickly move to larger-scale commercialisation.
Goennemann spoke to the importance of this fund and said that it is important to the Northern Territory and is a shining example for the nation as a whole.
“The Northern Territory is the first sub-national jurisdiction that came on board and worked with AMGC together in the advanced manufacturing ecosystem function,” Goennemann said.
“We jointly curate the ecosystem of manufacturing capability and help Northern Territory manufacturers to advance. Eventually we hope to advance, grow and allow manufacturers to be investment ready for an uptake of NRF or other sources of capital.
“While it is important for us to have national funds which flow through seven key areas, each jurisdiction has its own unique strengths. For example, South Australia with its ship building capabilities, there is only so much you can do at a national level so focusing in at a sub-national level is imperative.
“That is what the Northern Territory leaned in on heavily – how we can supplement what’s being done on a federal level and really help local projects to succeed and tackle local challenges,” Goennemann added.
Funding for the AMEF ranges from $25,000 up to $500,000 (or more based on scale and impact), but must be equally matched by industry in cash.
AMGC’s Perceptions of Australian Manufacturing Report has evidenced that Territorians support for, and knowledge of, manufacturing is the highest of anywhere in mainland Australia, rising by 33 per cent, to 83 per cent over the pre-pandemic survey.
Dr Goennemann explained that the fund in the Northern Territory is not a test of its capability but in fact an example for others of how a greater focus at a state level can reap rewards.
“We are way beyond the testing stage of this, we are mid-program. It’s [AMEF] an example which has worked on the federal level, it’s an example which works on a sub-national level, and it is an example which works in other countries who have a deliberate industry policy to develop this strength and not leave it up to market forces alone,” he said.
“The important part for us is making sure that manufacturing in the Northern Territory does not just consist of what happens in Darwin but includes places like Alice Springs and Katherine. Our projects happen everywhere in Australia, not just in our big five cities. By expanding where manufacturing occurs it boosts communities resilience, competitive jobs, helping manufacturers get a leg up helps communities get a leg up – it means we can all grow together.”