As we have said many times before, one of the defining features of manufacturing in this country is the large number of small businesses. This has a big influence on overall levels of technology adoption, R&D investment, collaboration with outside parties, and much else.
Of employing manufacturing businesses, nearly nine-tenths are between 1 and 19 employees (small by the Australian definitions.)
“SMEs are unique. They make up such a large proportion of industry in this country,” says David Chuter, CEO of the Innovative Manufacturing Cooperative Research Centre.
“They have unique challenges because of their lack of scale, their cash flow restrictions, their ability to get skills, their ability to recruit. And therefore they have to be very innovative in terms of the way they go about things.”
Chuter’s CRC is finishing up its seven-year term this year. It counts 80 per cent of the projects it has backed as being led by Australian-owned SMEs.
He says that the successful projects have shared a very clear view on what their participants want to achieve, as well as a good cultural fit between parties.
Those that haven’t worked – according to the IMCRC the success rate has been 90 per cent – are in “the absolute minority” believes the CEO.
“Where projects haven’t worked, it’s probably because that cultural fit was maybe driven perhaps a little bit more by the attraction of money through the Commonwealth for a CRC,” he tells @AuManufacturing.
“And in a couple of cases where the industry partners… probably weren’t as familiar or as passionate about the technology that was being invested in as their research partner is.”
In this episode of @AuManufacturing Conversations with Brent Balinski, Chuter shares some reflections on which collaborations have worked and why, the need for technology adoption and development to have a clear purpose behind them, the importance of design and engineering to the industry’s success, and more.
“We often hear [the] government talking about A Future Made in Australia and local content of trains and local content of submarines. It’s always been focussed on the production bit. That’s great, and that’s about creating jobs for factory workers,” he says.
“But just imagine a world where we had governments saying in addition to local production, 50 per cent of those submarines must be designed and engineered in Australia. I think you’d find that more than 50 per cent of the production would just take place. You’d be building the capacity and capability in our industry for people to apply smarts, engineering, production, R&D, and that’s going to create many more new ideas and processes and build our capability.”
This episode was recorded at the IMCRC’s Australian Manufacturing Innovation Showcase event at Port Melbourne earlier this month.
0:34 – Introduction.
1:36 – Going from running an SME manufacturing business to running a Cooperative Research Centre.
4:06 – What successful collaborations require.
5:40 – Digitalising your business with a purpose. You need to be clear on your goals and informed about why you’re investing.
9:32 – Why some projects succeed and others don’t.
14:22 – Appreciation of the smiley curve by manufacturers since 2016, and how it opens up the opportunity to think about adding digital services to your products.
16:40 – How IT can help you reinvent your business model.
19:30 – Wanting to build the next batch of Australian brands that are renowned for design, engineering, innovation, and can make it here.
20:40 – The importance of the production step in manufacturing, and how you can carry it out competitively.
22:36 – Innovation versus invention versus improvement.
24:40 – Innovation requires a leap of faith.
25:40 – Why design and manufacturing should matter to the nation.