Australia’s biggest tech blind spot is manufacturing
Manufacturing suffers from an image problem in Australia, often viewed as repetitive, low-tech factory work rather than one of the country’s most innovation-heavy industries, writes ACM CRC CEO Luke Preston.
Every so often, groups representing manufacturers will do their best to convey manufacturing as it is, rather than what it was, to the Australian public.
There are some examples of international leadership at the company level, sure, which I could name and which you probably could too. But manufacturing’s contribution to Australian GDP at about 5% is low by international standards, and its appreciation also needs lifting.
I am fortunate enough to have helped companies make all sorts of things during my career. From a job at Ford straight after university, I’ve also been involved in the manufacture of everything from cardboard boxes to drones to world-first automotive wheels to electric vehicles.
Much of this was done here, and I’m bullish about what the nation can make with the right backing, skills and commercial acumen.
One thing that needs to change, though, is how manufacturing should be understood and explained to smart young people. It’s a technology-based industry.
It harnesses all the technology we have, for example, AI and other kinds of automation. It also presents a unique opportunity for inclusive growth.
The ability of manufacturing to create and capture value is something that wealthy yet resource-poor countries understand. Nations like Singapore, Germany and Switzerland shine in the Economic Complexity Index rankings, which measure the diversity and sophistication of exports.
None of the three is a low-wage country, and each does well out of high-value, high-tech, hard-to-copy manufacturing.
Even within Australia, with its low manufacturing-to-GDP contribution, the cleverness of the industry is clear.
Manufacturing is the most R&D-intensive of any industry. The companies that do well here are competitive based on IP, advanced processes, and other factors that don’t involve throwing cheap labour at a problem. They have to be.
Hardware is, as they say, hard. And it can be as hard as you want it to be. It also underpins everything.
An extreme example of that is a lithography machine made by ASML. Among other things, it is the world’s most advanced machine available for purchase, as well as the most expensive machine tool there is.
As The Economist described an ASML extreme ultraviolet “colossus” a year ago, it weighs 150 tonnes, costs about US$350 million, and makes use of components including a vacuum chamber, lasers that heat molten tin droplets to “roughly 40 times hotter than the surface of the Sun”, a supply chain of over 5,000 specialised suppliers, and a “series of mirrors so smooth that imperfections are measured in trillionths of a metre”.
The advanced processing chips enabling the AI revolution depend on these machines, each a triumph of technological and manufacturing progress, for their precise features. The chips themselves must also be manufactured.
As I’ve written before, I don’t see the present or the future being bits (software) versus atoms (tangible products), but a combination of the two.
If we are to train the next generation of talent that local manufacturers need, we need to – as others have tried – do a better job explaining that manufacturing is an industry that creates, enables and uses technology. Anything else is a disservice.
Our car industry was a wonderful place to start my career straight after a computer science degree, and I miss it. But we need to look ahead.
There are examples of promise in manufacturing companies that have led in venture backing in the last few years, such as electronics company Advanced Navigation, electrolyser maker Hysata, and enzymatic recycler Samsara Eco.
Each is bringing something new to the world, based on the work of very smart people, and which is fiendishly hard to copy.
At the start of the article, I mentioned previous efforts to show what the industry actually looks like, because this desperately needs doing.
One of these was last year’s Make It ManuFACTuring campaign from the Manufacturing Industry Skills Alliance.
As MISA CEO Sharon Robertson said at the launch, research identified that many “weren’t even considering a career in manufacturing due to outdated misconceptions that the work was repetitive, dirty or poorly paid”.
These misconceptions persist, but we can all do our part to tell the real story. The future depends on it.
This article originally appeared at SmartCompany on May 25. You can view the original version here.
