A new deal plan for manufacturing - creating opportunity and capability by Narelle Kennedy

We can’t repeat the mistakes of the past as we develop policy to create opportunity for businesses and boost their capabilities. Here Narelle Kennedy joins @AuManufacturing’s campaign to crowd source a new deal plan for manufacturing post Covid-19 with thinking based on objective research.

It is no surprise that Australian manufacturers are strong early responders to the global COVID-19 crisis.

Those of us who have done the research into Australian manufacturing know it is an industry in transformation, not decline, in the face of fundamental structural and technological disruptions.

It is time for a new deal for Australia’s manufacturing policy, one that reflects this renewed recognition of the value of manufacturing and moves beyond the general inaction and disinterest of governments over recent decades.

But first, a cautionary note. A new deal manufacturing policy for Australia should not be a return to past glory days, nor should it be a plan for some idealised future of a manufacturing resurgence. Rather, the new deal must be framed by realism and pragmatism, an innovation in policy that builds on Australian manufacturing’s competitive strengths and redresses its weaknesses and limitations.

Past bail-outs, protection or favoured treatment for manufacturing, based on a diagnosis of Australian manufacturing in terminal decline, should not feature in this new deal. Rather, new manufacturing policy should be built on strength.

Central to this new deal manufacturing policy is support targeted at ensuring competitive, sustainable and forward-looking operations at the level of the manufacturing firm and its workforce.

A fresh approach to Australian manufacturing policy should be driven by the twin imperatives of creating demand and opportunities in lucrative markets, and building the necessary capabilities and skills in a critical mass of Australian manufacturers (not just high tech, high growth firms) to respond imaginatively to this demand.

This banner of ‘demand’ and ‘capability’ can be translated into practical programmes that could be supported to make a new deal manufacturing policy a reality.

A few suggested programs are as follows:

o Voucher schemes which provide an incentive and make it easier for manufacturing businesses to seek external help with solving business problems or undertaking change transformation projects or acquiring new knowledge for pursuit of commercial opportunities through working relationships and collaboration with researchers, technologists and business experts.

o Procurement programmes which are designed to provide manufacturers, often small and medium sized enterprises, with a lead customer to challenge them to find solutions and pull through new knowledge and skills that they can then take to the wider marketplace.

An example is the Small Business Innovation Research program which seeks to stimulate innovation in the private sector through procurement projects by government agencies. Small manufacturers are funded to undertake the research and development to address a real problem for which no market solution exists. As well as building capability, this programme enhances government and industry collaboration and exposes mainstream government agencies to the capabilities of local manufacturers.

o Industry or Technology Roadmap projects, which are effectively industry clustering initiatives either for a sector or geographic region, where manufacturing firms and related businesses, universities and other education and research organisations, various experts and industry specialists, and all levels of government agencies are brought together to explore the potential of ‘smart specialisation’ initiatives.

The industry sectors selected are typically based on areas of existing competitive advantage and growth prospects. The participants seek to understand the dynamics, obstacles and future prospects of a specific industry sector or supply chain, assess the opportunities for collaborative ventures, build trust and appreciation of their respective capabilities and embark on selected information-sharing or market access actions.

o Shared Learning Programmes, often peer learning involving practical and case-based presentations by other manufacturing firms and their leaders. Popular subject matter for these ‘good practice’ learning programs include advanced manufacturing technologies for business performance such as Industry 4.0, artificial intelligence, 3D printing, virtual reality; implementing business model innovation; customer-led innovation; design thinking.

o Manufacturing Leadership and Mentoring programmes that are best designed as industry-led programs. They involve the leadership teams of manufacturing enterprises participating in structured networking and mentoring sessions with credible and experienced manufacturing leaders, who have direct current or past hands-on roles in manufacturing businesses. The focus is on building skills and coaching to solve day to day problems and learning from the shared knowledge and experience of others.

o Innovation or Maker Spaces can be stand-alone or part of innovation precincts. Innovation or Maker Spaces provide opportunities for manufacturers to experiment with business innovations in a ‘safe’ space without risking all the resources of the enterprise.

Existing Maker Spaces have been described as “playgrounds for creativity” being community-based spaces providing tools, classes, software, teachers, and as a DIY workshop and fabrication studio. Open to small businesses, entrepreneurs, hobbyists, artists, students and corporate employees, Maker Spaces encourage collaboration and learning, and are used to retrain workers, trial business ideas, test out business applications of new technologies, and create artworks or manufactured products and prototypes.

The current crisis of a global pandemic shows that economic and social goals cannot be separated, action to safeguard both lives and livelihoods are presenting a complex and community-wide challenge.

Australia’s manufacturing industry can be part of the solution. A new deal for manufacturing policy in Australia is a significant first step.

Narelle Kennedy AM is managing director of The Kennedy Company Pty Ltd and former CEO Australian Business Foundation, the country’s largest private sector funder of policy research into industry and innovation.

Picture: Narelle Kennedy

@AuManufacturing’s new deal plan for manufacturing is brought to you with the support of Bosch Australia Manufacturing Solutions