The news is often dominated by stories of factories powering internationalised production cost-hopping conveniently to new destinations according to price imperatives, once iconic manufacturers in the west downsizing, and heated industry policy debates.
Despite the headlines however, manufacturing in Australia is on the cusp of a transformative leap forwards, and a rejuvenation of identity as a knowledge-based industry, according to Andrew McLellan, Chief Operating Officer of the Advanced Manufacturing Cooperative Research Centre (AMCRC).
“The underlying challenge is not only to recognise, but fully embrace, the structural change transpiring in the economy worldwide,” says McLellan.
Established with a grant of $35 million in 2008, the AMCRC is part of the Cooperative Research Centres Program funded by the Australian Government, where researchers and industries are brought together to foster the manufacturing community’s innovation, sustainability and global competitiveness.
The renaissance for Australian manufacturing, McLellan explains, will be built on knowledge and intangible assets (those not physical in nature, such as intellectual property, patents, trademarks, copyrights, and processes), with the breeding ground for the next wave of intangible assets being the nexus between research and industry.
“Australia performs very well globally in terms of our research strengths, operating in the top third of OECD countries, but translating research into commercial outcomes is increasingly critical. Industry and the research sector have a wonderful opportunity to better engage to develop intellectual property, which is the ticket into the international market.
“As a co-operative research centre, we work to bring together manufacturers and researchers from across the country, develop and commercialise intellectual property, then help propel those innovations globally.”
For McLellan, the arrival of new technologies, coupled with new concepts of business, design and manufacturing outputs, is setting a future stage fertile with opportunity.
It is a world where the idea and the imagination behind it is the product, which might take final form as an algae producing fuel from carbon waste, an avionic component enhancing jet engine propulsion efficiency, or a one-off artificial hip created specifically to suit its human recipient.
“Industrial scale is not as critical as it once was. We work with companies with thousand-strong workforces right through to one-person start-ups with a single strong idea,” says McLellan.
A new suite of production and design technologies will revolutionise the way products are made in Australia. Additive manufacturing processes such as 3D printing McLellan says “allow for a more direct relationship between design, as well as the realisation of product concepts that can’t be easily produced by traditional methods, or produced at all.”
Previously only used for prototypes and high-end niche products, additive manufacturing will increasingly facilitate a more seamless transference of IP and design into end products, as costs for processes such as 3D printing continue to fall.
“The required trait is that manufacturers aim from the outset to be globally competitive, creating differentiated high-value products. Those prospering are actively exporting, engaging with international market opportunities wherever they exist, whether that be through collaborations, linking into supply chains, or by creating unique products,” he says.
With community concerns continuing about off-shoring and job losses in traditional manufacturing industries, McLellan is keen to point out that an intelligent approach to international business, even if it moves some aspects of production offshore, will deliver a new wave of employment opportunities.
“To do be globally competitive, companies need to produce where it makes most sense to do so, but the key is maintaining an understanding of where the value-creation in each product lies, and the need to control and retain that intellectual property.
“When companies are able to succeed, job creation will come in higher-skilled, higher-value, and ultimately higher-paying roles.”
Recognising the changing and collaborative nature of international business, the Centre actively seeks to foster co-operation between Australian and international companies to drive innovations and commercialise IP, with participants including Chinese giant Baosteel, and France’s SAFRAN Microturbo, who develop and manufacture low-power gas turbines.
In only seven years the Advanced Manufacturing CRC has engaged with over 100 innovative organisations in Australia and overseas, with technologies emerging with the potential to transform not only manufacturing but our way of life.
One biomanufacturing example McLellan cites is an AMCRC-funded algae-to-fuel project developed in partnership with MBD Energy and James Cook University, involving the creation of microscopic algae that literally eat greenhouse gases from sources such as powerplant emissions, converting them to biofuels and livestock feed.
“If fully commercialised, the technology could cut greenhouse gas emissions from these sources dramatically, with the potential to generate jobs and new businesses in rural and regional areas.”
And despite concerns about competing with low-cost manufacturing centres in our own region, McLellan says manufacturing will do well to focus on the promise of Asia above all.
“There is a huge pool of investment capital in Asia, particularly in countries like Japan and China. Many Asian companies are seeking to enter into partnerships and to commercialise intellectual property, which offers huge potential for local manufacturers to deliver their innovation onto the world stage.”