Industry 4.0 Advanced Manufacturing Forum – MCG, Melbourne
7 August 2019
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Distinguished guests, ladies and gentlemen.
Thank you to the Advanced Manufacturing Forum for the opportunity to address your inaugural conference.
I am very proud to say Australia will always be a manufacturing nation.
Yes, it may look a little different and we’ll come to that … but today’s attendance is testament to the fact Australia has what it takes to not only maintain our manufacturing industries but to see them thrive.
I’m pleased to see such a broad range of business leaders and policymakers coming together to discuss how we can make the most of Industry 4.0.
Industry 4.0 will be instrumental in driving economic productivity.
For example - Internet of Things technologies has been estimated to be worth up to $88 billion for our manufacturing industries.
Australia is in its 28th year of economic growth … that’s unmatched anywhere in the world.
But we can’t take that for granted.
Growing our core and emerging manufacturing industries is a key part of the Morrison Government’s economic plan … including our commitment to deliver 1.25 million new jobs over the next five years.
Now as I just said … Australia will always be a manufacturing nation.
What we need to do is look at the future of our manufacturing industries.
Manufacturing is about so much more than just production … there are great opportunities both before and after … from design and engineering through to after sales service.
If you look at manufacturing through this lens … the number of people employed jumps from 850,000 to almost 1.3 million.
These are jobs in major cities as well as our regional areas.
If you break it down … manufacturing provides jobs for almost one in 10 Australian workers. That is massive.
Our manufacturing sector is also a leader in R&D, spending almost $4 billion each year.
That’s almost a quarter of Australia’s total business R&D expenditure.
The value of our manufacturing exports has also grown over the past decade, to more than $120 billion in the last financial year.
We know that exports are a big part of the equation to grow our manufacturing industries and create new jobs.
The Government has a range of support measures in place to grow export opportunities … including our SME Export Hubs Initiative.
Another Morrison Government commitment is our funding towards the Australia Made campaign, to build the Australian, clean, green high quality, brand overseas in our key export markets.
But we know it’s not just the exports we need to get right.
We know it’s important we also make it as easy as possible for you to import the ingredients you need to manufacture … and I want you to know the Morrison Government is committed to eliminating the red tape that can make it difficult for you to do business.
One of my main focuses over the next three years will be the future of manufacturing in this country.
World-class manufacturing businesses are the backbone of our economy.
But how do we compete with the rest of the world when it’s often much cheaper to manufacture overseas?
The answer is: to compete on value, not on cost.
This will only become more important in the coming decades as technology continues to spread.
As I said – production is much wider than just making things.
Pre-production manufacturers can use design to develop niche products, tailored to each customer.
Post-production manufacturers can carve out their business by selling an outcome … not just a product.
Almost half of the manufacturing workforce is focused on pre and post-production.
These pre and post-production opportunities are particularly important to pursue, because we know this is where the high-value jobs lie.
CSIRO recently released the 2019 Australian National Outlook report.
This report created scenarios of how our country could look in 2060.
It found that if we get the settings right, manufacturing could contribute more than 25% in additional GDP growth compared to today.
Industry 4.0 technologies, like robotics and artificial intelligence, will be key to realising this.
Clearly the opportunities for Australia are significant.
But when it comes to manufacturing … we can’t be all things to all people.
We need to target areas where Australia is competitive and where we can build on our strengths.
Building competitive advantage will be key to industry transformation.
This should include building on the advantages within our regions, such as the food supply chain and mining technology and equipment.
We need to look at our key strengths to capitalise on the opportunities ahead.
This includes developing management capability and identifying the skills that industry needs to create high-value jobs.
We already have a highly educated workforce and access to world-class research institutions; but we should aspire to set the benchmark globally.
The Advanced Manufacturing Growth Centre estimates that up to 113,000 jobs in R&D, design, higher-skilled production, and sales and service positions will be created by 2026.
This is a huge opportunity to continue to re-skill and upskill our workforce and create new and better jobs.
This is especially important given one in five manufacturing businesses recently identified skills shortages as a concern and there are ongoing challenges in recruiting experienced staff with STEM skills.
We know we need to build the STEM pipeline, and this begins with our children. Our role as parents is to support our children and make them realise that the jobs of the future will rely on jobs. 75% of those jobs in fact!
The Government’s $100 million Advanced Manufacturing Fund is already helping develop job-ready graduates.
The fund is creating a pipeline of skilled engineering graduates for the automotive industry.
Encouraging the uptake of new technology is another critical element of growing our manufacturing sector.
Australia’s most successful manufacturing businesses are using state-of-the-art technology.
That’s why the Morrison Government is establishing a Manufacturing Modernisation Fund.
This will provide grants to businesses to invest in transformative technologies such as 3D printing, robotics, AI and nanotechnologies.
There will be $50 million in funding from Government and at least $110 million from industry.
This will help small and medium-sized manufacturers to modernise, grow and employ more Australians, particularly those in regional and outer-suburban areas.
A great example of a business in an emerging industry is the South Australian company Fleet Space Technologies which specialises in nanosatellite technology.
Fleet’s technology is opening the door for Australian businesses to capitalise on the Internet of Things.
Fleet has recently launched four new satellites, expanding its active network to 20 satellites.
Fleet’s constellation of satellites has the potential to boost productivity across multiple sectors, from agriculture to mining to logistics.
They are a great example of finding your niche in manufacturing and how Australian manufacturers can contribute to a global ecosystem.
I want to briefly touch on the manufacturing roundtable I hosted at Parliament House last week.
It brought together leaders from peak industry associations, businesses, research organisations and universities.
It was a great meeting, with lots of vision about the future of manufacturing.
We shared our perspectives on the opportunities and also the challenges for Australian manufacturing.
I know one of the main challenges raised was the cost of production, given current energy costs. One of the big things you called for, was further measures to try and drive down the cost of gas.
I’m pleased to say just yesterday Ministers Canavan and Taylor announced a gas policy review, to put pressure on the states and territories to open up new gas reserves in an effort to drive down prices.
Driving down prices, reliable supply and keeping Australia globally competitive are this Government’s priorities.
I know yesterday’s announcement was well received by many in this room but I’m conscious it’s not a fix-all, and I am committed to working with Ministers Canavan and Taylor to deliver for you.
The roundtable I hosted last week also looked at how we can support the transformation of our core industries and the development of our emerging sectors.
And there were great ideas on how to build competitive advantage and thrive in global markets and supply chains.
Most importantly, though, there was a common view that the best days for Australian manufacturing are ahead of us.
We now need to work together to get that message across to the broader economy and the general public.
Over the coming months, I will continue to work with you and for you to develop a plan that will set the agenda for manufacturing into the future.
A vibrant and competitive manufacturing sector is vital to Australia’s economic future and the adoption of Industry 4.0 technologies will be a key driver of industry transformation.
But this change cannot be achieved by Government alone.
We need to work together to put manufacturing on the right trajectory so it can be a cornerstone of our economy.
It’s essential, because a strong economy delivers a better way of life, high-value jobs and more opportunity for all Australians.