The days of hot, steamy factories filled with men beating steel with oversize hammers are over. Thank goodness! If this is your view of manufacturing in Australia, then yes, Australian manufacturing is dead. We have entered a new era of cleaner, faster, smarter manufacturing and Australia is in a great position to embrace it.

Australia is a high wage economy. It is what it is, time to move on. Follow the money trail to find where Australian manufacturing should be focussing its efforts. Take a typical gadget in an electronics store on sale for $300; assume the retailer bought it for $150. The enclosure is worth $2, the screen $8, the circuitry inside it $20. Should we be manufacturing these items? Probably not! Most of the value lies in the idea and the brand. Who better to innovate new, valuable ideas for Australia? Australians of course!

 

Hummingbird Electronics has been honoured to be the recipients of seven innovation awards over the past six years and over that time we have thought carefully about what makes our company innovative. The conclusion is communication. We listen to our suppliers to find out about new materials, new components, new manufacturing techniques and new technologies. We listen to our customers and find out not what they are asking for but what they really would like. As time goes by, technologies and requirements intersect and innovation flourishes.

 

With the advent of new production methods like 3d printing, labour costs associated with manufacturing are not as important as they were as there is less or no labour involved. In our industry, we find that assembling circuit boards in volumes around 1000 costs about one dollar more in Sydney than in Shanghai. After all, why should an Australian robot cost much more than an Asian one? Automation is going to feature highly in the new Australian paradigm. I have always been struck by a comment that I heard a few years back that applies to most industries “multinationals with billion dollar R&D budgets are developing new integrated circuits all the time. The results of their billion dollar investments are available to the USA and Australia on the same day.”Automation and innovation can turn the manufacturing tables back in Australia’s favour.

 

Government is generating a lot of noise at the moment about innovation in manufacturing and supporting the transition from traditional to future manufacturing. We should take advantage of programs like the recently announced “new $50 million Manufacturing Transition Programme” while they are still in the budget. Whilst on the subject of government, please if anybody in a situation of influence is reading this, we need stability. How can we innovate in important areas like renewable energies and cleaner cars when the government changes policy and position like the seasons? The greatest risk as we see it to increased investment in Australian manufacturing right now is a lack of a bipartisan commitment to many of the big opportunities for the next decade. Come on government stop arguing and start leading.

The future of manufacturing is exciting. It is cleaner, faster, and smarter and Australia is as well positioned as any other country to take advantage of it. Embrace the change and let’s look forward to another century of successful manufacturing in Australia.