Strategy

Manufacturing works: a strategy for driving high-value manufacturing in South Australia

15 Oct 2012
Description

Manufacturing has always been a cornerstone of South Australia’s economy. It remains crucial to securing our place as a major advanced manufacturing capital with a sustainable export capability, and to generating skilled jobs that underpin a high standard of living. This is the first key message of this strategy. Across the western world, manufacturing is an industry undergoing major change and this also applies in South Australia. It must be accepted that significant structural adjustment will be a key feature of our short and mediumterm future and confronting these challenges will result in opportunities as well as threats. Some manufacturing firms will not survive this change; others will explore and create new prospects and opportunities by doing things differently; and new firms will be started in response to opportunities identified in this new world.

Why now? Manufacturing directly employs almost one million people nationally (962,100 in August 20121 ) and contributes 8.7 per cent of Gross Domestic Product. In the past decade, however, more than 100,000 jobs have been lost around the nation and most of this has occurred in the four years since the global financial crisis. In South Australia, manufacturing employs 73,200 people and contributes 10 per cent of Gross State Product. In this same period, Australia has become a high-cost country. The high value of our dollar, rising living costs and low productivity growth have all combined to erode our international competitiveness. Projections by the Department of Education, Employment and Workplace Relations (DEEWR) for the Prime Minister’s Taskforce on Manufacturing indicate that Australia could lose a further 85,600 manufacturing jobs over the next five years as a result of the ongoing structural adjustment process. If distributed proportionately, this could amount to 6,700 job losses in South Australia. Therefore, the second key message of this strategy – and the immediate challenge for South Australia – is that given continued global economic instability, the situation in manufacturing is likely to get worse before it gets better. When taking the numerous flow-on effects of these jobs losses into account, the third key message is that Government inaction is not an option. The fourth key message is that the Government will work closely over the next decade with all stakeholders to ensure our economy is diverse and resilient, but its success will largely be determined by the actions of the management and workers of individual firms.

Manufacturing is changing. The Macquarie Dictionary defines manufacturing as (1) the making of goods or wares by manual labour or by machinery, especially on a large scale, and (2) the making of anything.2 While these definitions may be in keeping with commonly held perceptions about manufacturing in the 19th or 20th centuries, they do not reflect current reality. Twenty-first century manufacturing encompasses more than just the production process. It includes the entire chain of activities – from research, through design and development, to distribution, implementation, operations and maintenance. Manufacturing in a modern, high-cost environment is more about competing on value than cost; more about innovation than replication; and more about the customer than the supplier.

What does ‘innovation’ mean? Innovation is a key source of competitive advantage in a highcost environment. It goes beyond technology and embraces design, efficiency and organisational innovation such as new business models, customised solutions to customer problems, high-performance workplaces and collaborative partnerships.

Manufacturing Works spearheads change for the future success of South Australian manufacturing. It charts the course of change needed to ensure a highvalue, sustainable manufacturing industry, and it details the imperatives for action by the Government and industry to orchestrate that change.

Publication Details
Publication Place: 
Adelaide
Published year only: 
2012
7
Share
Share
Subject Areas
Geographic Coverage
Advertisement