Recovery & Revival: What’s next for Australian Manufacturing?
05 May 2020
Australian manufacturing could be set for a revival. After reaching a high of nearly 30 per cent of gross domestic product (GDP) in the 1960s, manufacturing has since fallen to 6 per cent of GDP.
BDO Australia, National Leader for Manufacturing, Ryan Pollett said the impact of COVID-19 may push Australians to demand more locally made products – from household goods and healthcare equipment, to food, technology and renewables.”
“Distribution chain gaps and decreased supply from China, combined with a lower valued Australian dollar, creates an opportunity for local manufacturers to provide products to Australian and global markets,” Pollett said.
“The Federal Government has a key role to play to help manufacturers step up to the challenge. There are six areas where they should focus their efforts, to:
- Provide tax and regulation incentives to facilitate growth – particularly through the Research & Development Tax incentives program
- Fund Grants – the $48.3 million Manufacturing Modernisation Fund (MMF) will help with critical investment in small-and-medium-sized businesses in the face of the coronavirus pandemic. Two hundred projects worth more than $215 million are being supported through the fund
- Procurement of Australian made goods - encouraging Federal Departments and Agencies to buy local products
- Drive industry discussion via the Government’s manufacturing task force. Headed by former Fortescue Metals chief executive Nev Power – the group is seeking to identify ways to help the economy respond in a post-COVID-19 world.
- Encourage greater collaboration between industry and universities
- Reduce red-tape and barriers between the different levels of Government – local, state and federal need to work together to foster and nurture manufacturing businesses.
“Manufacturing globally was already on a pathway of dramatic change, with robotics, AI, automation, and data analytics pushing a fourth industrial revolution.
“The impact of this revolution, known as Industry 4.0, can be seen through society’s reliance on technology, including:
- Automation and robotics
- Machine-to-machine and human-to-machine communication
- Artificial intelligence and machine learning
- Sensor technology and data analytics.
“There’s no doubt that the next 12 -18 months will be an extremely challenging period for Australian manufacturers. But this sector has already shown its resilience and come through the other side.
“You’ve only got to look at the Aussie manufacturing companies who’ve "pivoted" into different areas of production since the outbreak of COVI-19, from SMEs producing critical ventilators to craft breweries distilling hand sanitiser to the Victorian 3D printing company who are making face shields following the surge in demand for Personal Protective Equipment.
“Those who can offer customised, niche, and unique solutions to client or customer problems and those who can tap into the new local and global markets where gaps have suddenly arisen, are the ones that stand not only to recover but lead the revival.”