Australia’s increasingly vibrant manufacturing sector needs the support of the country’s younger, globalised generation, if it is to continue its growth trajectory according to new research.
A St.George survey of over 1000 consumers revealed ‘Australian made’ is not as important to 18-24 year olds (23 per cent) when purchasing a product, compared to 69 per cent of 55-74 year olds, even sustainable businesses.
The youth age group are also not willing to pay more for Australian products (45 per cent), and 36 per cent don’t believe they are better quality than overseas counterparts. Matthew Kelly, head of manufacturing and wholesale, St.George, said even though the manufacturing sector in Australia has seen 23 consecutive months of growth, the challenge businesses face is competing with low-cost imports, particularly when it comes to younger generation.
“The sector is far from fading; automation, artificial intelligence and pure inventiveness are enabling new business models and processes that are transforming an industry which already contributes $100 billion to Australia’s GDP.
“However, it’s clear from the research that the industry needs to do more to create a compelling value proposition for the next generation aligned to what matters most to them when purchasing products. This could be through the reduction of carbon emissions, investing in innovative manufacturing techniques to reduce costs and future sustainable materials,” Kelly said.
St.George’s Future of Manufacturing Report has identified greater collaboration and partnerships are needed to drive the sector forward and support a new wave of advanced manufacturers who are future-proofing the industry.
According to the report, to succeed in the face of disruption, advanced manufacturers need connections to research and development, skilled workers and access to financial support.
“St.George is collaborating with scientist and engineer UNSW Professor Veena Sahajwalla and the Australian Manufacturing Growth Centre (AMGC), to help businesses unlock their potential through access to research and grants to build capabilities towards a tech-powered advanced manufacturing future.
“We are also forming partnerships to help address industry pain points, such as rising energy prices, through working with energy efficiency consultancy Verdia which customers a financial solution for solar and energy programs.
“Advanced manufacturing has the ability to be more competitive and offer better value to consumers, importantly those who are less loyal to Australian made products. These businesses aren’t necessarily new tech companies, they are well-established organisations reinventing themselves and willing to invest in new ways of doing things,” he said.
One example is NSW manufacturer Genneral Staircase who spectacularly boosted productivity using data analysis and robots to streamline processes, which resulted in the 48-year-old business increasing production from two staircases a day to between 30 and 40 a day.
“New technologies are also bringing a new generation into the manufacturing sector, such as drone manufacturer JAR Aerospace. Founded by four graduates in 2017, the business uses innovative technology to ensure it can compete on a global scale and is now working with its first Defence Force contract,” Kelly said.
The report concluded there is significant room for Australian manufacturers to increase adoption of advanced characteristics through greater collaboration on research and development, generating different revenue streams with new product and service offerings and increased technology investment.
Professor Sahajwalla, director of the Centre for Sustainable Materials Research and Technology (SMaRT) at UNSW Sydney and Director of NSW Circular, an organisation that brings manufacturers, industry, governments and researchers together to help develop the circular economy, says her work is benefiting from closer collaboration with manufacturers.
“We know consumers do value sustainability so there are longer terms benefits to manufacturers who embrace ‘circular solutions’ to their materials and waste challenges. A game changing opportunity is to produce niche products and supply high value materials.
One example is what we do at the SMaRT Centre MicrofactoryTM, producing filaments for 3D printing from waste plastic which is almost always imported from overseas. Demand for filaments is expected to grow and this type of technology is ideally suited for manufacturers looking for innovative solutions.”
Kelly added: “We understand one of the significant barriers to manufacturers investing is cash flow shortfalls. St.George has a unique understanding of the sector and specialised expertise and products to help businesses grow and succeed, including an invoice discounting solution that helps manufacturers access capital tied up with aged debtors, and equipment finance to support business growth.
“Transformation can be confronting, but as an industry I believe we all have a role to play in nurturing businesses that will fuel the sector and St.George is committed to helping manufactures create new models for growth.”