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Executive summary

Rumours of the death of manufacturing in Australia are greatly exaggerated. However, today’s successful manufacturers are enjoying a life very different to what has been known in the past. Rather than the mass production and assembly of final products (traditional manufacturing such as steel and automobiles), successful Australian manufacturers typically engage in advanced manufacturing, which is about variability, complexity and extensive customisation with high value add. This usually involves low-volume, high-value manufacturing, with a customer and export focus and nimbleness in manufacturing that allows manufacturers to provide a customised and responsive solution to the market.

There are many successful Australian advanced manufacturers and they typically have similar characteristics of being export-focused, customer-driven, innovative and technologically-cognisant. They are also generally good managers of global value chains (GVCs or the complex and cross-border chain of activities from the conceptual stages to the post-sales stages of production), typically positioning themselves at the pre-production stage (for example research and development services) and engaging in high value-add activities. Further, they tend to be small and medium sized enterprises (SMEs) and also have the distinction of rarely being profiled or discussed in the media.

The perception of manufacturing in Australia is shaped by media reports about struggling manufacturers, who are more often than not subsidiaries of large multinational companies involved in high-volume manufacturing, and often poorly integrated within GVCs. The news continues to be dominated by an ongoing debate about traditional industry assistance, which is typically aimed at luring large multinationals to Australia to engage in traditional manufacturing, an area where Australian manufacturers struggle to compete. This approach essentially tries to pick winners regardless of their economic viability and compensate them for locating in Australia. Recent economic history shows that this is doomed to fail.

Instead, government can and should adopt policies that actively facilitate the emergence and success of competitive, viable and sustainable industries. This policy perspective recommends the implementation of an Advanced Manufacturing Industry Plan. It contains key elements of what government and industry need to pursue to facilitate the current transition of manufacturing into a new and vibrant sector that reflects Australia’s comparative advantage.


Chapter 1: The constantly changing manufacturing context

Chapter 2: Advanced manufacturing global value chains and policy implications

Chapter 3: Advanced manufacturing: a smarter approach for Australia

Chapter 4: META - creating the engine for an advanced manufacturing industry in Australia

Chapter 5: Key enabling technologies


Related identifier: ISBN 0 85801 293 6



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