CEDA report calls for government tenders to require innovation to find new manufacturing sweet spot



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Government tenders for major projects should require Australian made new-to-world technology that drives innovation, rather than accepting off-the-shelf products, which will help replace lost traditional manufacturing jobs, according to research being released by CEDA.

In releasing Advanced Manufacturing: Beyond the production line, CEDA Chief Executive, Professor the Hon. Stephen Martin there are many examples of these new technologies which can range from new technology for road surfaces and public transport to healthcare equipment for our hospitals.

“The focus in Australia has been on traditional assembly line manufacturing – low-cost, high-volume production – which will continue to decline because we simply can’t compete with low cost economies,” he said.

“We need to find a new manufacturing sweet spot and advanced manufacturing is where our focus should be.

“By cultivating new technology in Australia it means better technology and infrastructure for Australians but also means we can then export and market this technology overseas.

“Driving innovation through government contracts will not only deliver commercialisation of new technology but help drive a culture of innovation within Australian industry and help us move away from a culture of handouts.”

In addition, Professor Martin said services around new innovations and technology must become a focus.

“High-cost economies that have had the most success in advanced manufacturing – such as Germany, Switzerland and Sweden – are those that recognise it is not just about products – advanced manufacturing includes the full suite of activities from the concept, research and development (R&D) and design stages all the way through to post-sales services,” he said.

“It is about adding value to the production line, and it is very much about securing a place in the global supply chain.

“Knowledge-intensive manufacturing services such as R&D, after-sales maintenance for high tech products and the development of customised solutions for specific consumers are just some of the areas where Australia’s future lies.”

Professor Martin said while the transition from traditional manufacturing to advanced manufacturing will likely result in less jobs overall for this sector, new jobs will be higher skill, higher paying and make a bigger contribution to the economy.

The report includes a proposed reform agenda which outlines 14 key areas that should be addressed under the umbrella of an Advanced Manufacturing Industry Plan.

In addition to government contracts requiring new innovation to be incorporated, Professor Martin said the CEDA report was also calling for stronger industry/government partnerships in R&D and more incentives for university research to reach commercialisation.

Professor Martin said industry also needs to form more cooperatives or industry clusters, even among competitors, to drive better R&D similar to what has happened in agriculture.

Advanced Manufacturing: Beyond the production line brings together leading thinkers to explore and analyse current practices and opportunities. The report was launched in Melbourne on 30 April 2014.

Speakers included:

  • Victorian Minister for Manufacturing, the Hon. David Hodgett;
  • Siemens Chief Executive Officer, Jeff Connolly;
  • Manufacturing Excellence Taskforce Australia (META) Chairman, Albert Goller; and
  • Ai Group Chief Economist, Julie Toth.

Read opinion piece by CEDA Chief Executive, Professor the Hon. Stephen Martin