It’s time – a virus-led manufacturing revival

Comment by Peter Roberts

With coronavirus wrecking its havoc on the Australian economy, I can’t help thinking that there is no cloud without a silver lining.

This might just be the time when the general public wakes up to the importance of a healthy, capable and broad-based manufacturing sector.

A few of us diehards have held the torch for the sector during some dark times.

Those endless comments that we çouldn’t be trusted to make a canoe, that we don’t make anything here do we?, and that the trade unionists killed manufacturing are giving way to a new reality.

Suddenly, people understand that global supply chains can’t be trusted to keep the shelves stocked during time of crisis and that we need to be able to make locally the things we need.

This goes as much for toilet paper as it does for the ventilators and vaccines that will ultimately defeat the disease.

We already learned that lesson in defence and are now reaping the rewards – only on Friday @AuManufacturing reported that the government’s latest Australian Military Sales Catalogue lists 170 exporting businesses.

This is 49 per cent up on the previous edition and shows just how quickly manufacturing can turn around if supported by sensible policy that does not start with the premise that making things in China is always cheaper and better.

In fact today’s $100 billion Australian manufacturing sector starts from a good place for a revival.

Yes we have lost much capability, but manufacturing leadership has been transformed since the days of protectionism.

Those companies that have come through adversity to prosper today are ether in a comfy niche, or are leaner, more innovative, more technology savvy and nimbler than they have ever been.

And with a dollar at 55 cents, really is there anything we cannot make here, even in the mass volumes supposedly only possible in the likes of china?

There are two caveats here.

The first is that the orthodoxy of getting things made overseas is now deeply ingrained in the psyche of many business leaders – importers through habit who generally do not have the skills to make things for themselves.

The second is government policy.

While governments are not going to ‘save us’, you do need comprehensive policies in place to foster manufacturing innovation and growth.

We have not had that for a decade or more.

But right now Canberra is about to spend billions of dollars – could some of this not be directed to the cause of making Australia more resilient to external shocks?

The big thing with industry policy today is we have the lesson of defence industry – in short order it has lifted myriad of companies’ technology and skills, and thrown up business leaders willing to take a risk.

We can engineer and manufacture world-leading products here and we can compete.

And, perhaps, we have the public newly aware of the importance of buying locally.

Picture: Cochlear

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