Six key areas given government investment to boost onshore manufacturing

The pandemic has proven to be a wake-up call for Australia, with disruptions in global supplies demonstrating the importance of retaining the capacity to domestically produce manufactured products that may be crucial to the nation’s economy, security and well-being. Everything from essential medical equipment and PPE to building materials have been in short supply at some stage since March this year, and while shortages never reached critical levels, the crisis has confirmed that being able to domestically produce a full range of essential manufactures is of growing importance.

Though there were already steps in place in some states to increase the level of manufacturing, the $1.5 billion 2020 Budget investment into building and sustaining local manufacturing shows the government’s plan to secure a “sovereign capability”.

So, just how will this focus on shifting to onshore manufacturing alter the industry and what might employers need to take into account?

Areas of growth

Of the government investment, $1.3 billion will be spent over the next four years, starting in the first half of 2021, to help manufacturers upscale their businesses, with additional focus on turning concepts into finished products, and integrating into global supply chains.

The money will be distributed to businesses willing to co-invest with the government in six priority areas: Resources technology and critical minerals, food and beverages, medical products, recycling and clean energy, defence and space. These are the areas identified as not only being the most advantageous for the country’s economy, but also being the most critical.

Indeed, the shortage of medical devices, equipment and PPE during the middle of the pandemic was certainly an eye-opening experience for many Australians and has seen several new initiatives develop in response. For example, in NSW a new grants program was designed specifically to assist Australian manufacturers in PPE production. According to a statement from NSW Treasury Executive Director, Trade, Kylie Bell, the funding was designed to meet supply needs, stimulate the manufacturing sector, and reduce dependence on imports.

Advanced manufacturing

The phrase ‘advanced manufacturing’ has been a discussion point for the last few years in Australia, but the pandemic has brought the need for greater advancements and innovation to the fore. Advanced manufacturing describes businesses and supply chains that have established sustainable global competitiveness through advanced capabilities and characteristics, such as having strong leadership, investing in a highly-skilled workforce, utilising leading manufacturing technologies, techniques and data.

As the sector changes, it is important for manufacturing businesses to embrace new technology, invest in a skilled workforce or employ advanced business models to make the most of potential on-shore opportunities. Such advancement will be vital to the ongoing profitability of the industry and allow Australia to compete on a global scale.

A changing workforce

While advancements in technologies will be crucial, investing in a skilled, capable workforce will also be vitally important. Recent research from The Australia Institute’s Centre for Future Work ranked Australia lowest among OECD countries in terms of manufacturing self-sufficiency. In the late 1980s manufacturing was the biggest employer in Australia, with 16.5 percent of the workforce. Now less than 1 million people work in the sector, accounting for 6.4 percent of jobs.

If Australia wishes to compete at a global scale and create a more self-sufficient industry, enhancing the future skills and capacities of workers will be a vital component of future sector strategies. Employers should consider which future skills will be needed in their workforce if they wish to be part of Australia’s advanced manufacturing surge. According to Victoria’s Advanced Manufacturing Advisory Council, “enhancing management quality requires proactive investment in leaders throughout the workforce and further investments in training and skills.” This will be important to remember for employers when considering their hiring strategy.

If you are looking for skilled employees to work within the manufacturing sector, contact Baytech today and speak with one of our consultants.