As a resident of the Top End, I, like many Territorians, am acutely aware of the economic impact from the mining and energy sectors on our way of life. More than a quarter of the Territory’s wealth is derived from mining and energy. These sectors are critically important, and we often miss out on many opportunities and economic dividends by not fully value-adding to these abundant resources.
Association Comment Charmaine Phillips, Advanced Manufacturing Growth Centre (AMGC)
If you have been around long enough, you will know that one of the challenges with mining and energy is their high volatility. Prices can fluctuate enormously, impacting whether we have enough skilled workers, housing, or even the foresight to meet industry needs. This volatility makes economic forecasting very difficult for a resource concentrated region like ours.
It was this thinking that influenced the final report of the Territory Economic Reconstruction Commission in 2020, which recommended that the NT should focus on growing its manufacturing base to enhance its capabilities and economic contribution. Doing so would add an additional layer of resilience to the NT economy while also creating highly skilled, well-paid jobs.
In 2020, manufacturing accounted for just 4.1 per cent of the NT’s total economic output. Today, despite the challenges of COVID and national skills shortages, manufacturing’s contribution remains fairly stable. In contrast, mining has declined by two per cent over the same period resulting in billions in lost revenue for the region.
Given these challenges and recent geopolitical disturbances, it would be wise to build on our strong mining and energy base and invest in developing advanced manufacturing capabilities for the NT. This would create a more balanced, reliable, and stable economy. By doing so, we can shift towards trading on the value of products rather than their cost. Crucially, this would increase the complexity of our products and expand job opportunities for future generations of Territorians – keeping our smarts here.
At some point, we must acknowledge that our luck may run out and demand for our raw commodities will falter. Therefore, we must use prosperous times to prepare for future challenges. The Northern Territory Government recognises that tomorrow’s economy will not mirror today’s, hence it is expanding efforts to diversify the region’s economy through initiatives like the Advanced Manufacturing Ecosystem Fund (AMEF).
In collaboration with the Advanced Manufacturing Growth Centre (AMGC), the NT Government was one of the first jurisdictions in the country to focus on growing our manufacturing capabilities. Better still, the program seeks to leverage our knowledge economy, spur cooperation and have manufacturers create globally relevant products and services. It is not about replacing mining or energy operations but leveraging them further to boost the diversification of the region and the complexity of the items we make.
The importance of complexity is underscored by the Harvard Growth Lab’s Economic Complexity Index (ECI), which ranks countries based on the diversity and sophistication of their exports. At 93rd place among 133 countries, Australia lags Uganda and Pakistan, ranking lowest among OECD nations. We can and must do better.
Fortunately, manufacturing offers a solution. The AMEF, spearheaded by the Northern Territory Government, has already supported local manufacturers in commercialising innovative products, enhancing local capabilities, and fostering cross-border collaboration to solve valuable commercial and complex problems.
For instance, Arctic Installations has developed specialised roofing and insulation panels tailored for hot, humid, and cyclonic conditions in collaboration with James Cook University, MDI Systems, and Rapid Engineering. This initiative has led to new jobs, products, processes, and a sovereign capability for the Territory – displacing imported panels from China and enabling the Darwin-based company to export interstate and overseas. Similar success stories include Air Tip in Alice Springs, which has scaled up production of the world’s first pneumatic side-tipping haulage trailer, reducing costs and enhancing efficiency.
Collectively, AMEF participants are set to create 195 new jobs and contribute $99.8 million to the NT economy, from a mere $4.3 million in co-investment to date. These success stories highlight how leveraging existing knowledge and capabilities can boost economic contribution – and we have funding available for like-minded manufacturers.
The potential for our region to add value to its natural resources and elevate economic complexity is immense. It is my hope that we recognise our strengths and proactively embrace manufacturing to secure a larger share of the NT economic pie.
AMGC, in partnership with the NT Government, stands ready to support this endeavour. So, if you are a Territory-based manufacturer seeking to advance, or a manufacturer seeking to establish a presence in the Northern Territory, then we want to hear from you.