In our second installment in our three-part series on the vision for manufacturing in Australia, we’ll be focusing on Australia’s competitive landscape. This is based on the CSIRO Futures report: Advanced Manufacturing: A roadmap for unlocking future growth opportunities for Australia. In case you missed part one, head back and read it, head back and read it.
What are Australia’s strengths and weaknesses?
Australia has the potential to lose grip on the things that make us great if we don’t continue to invest in our comparative advantages.
1. Education and research skills
Australia ranks quite high on a global scale when it comes to higher education and training – 9th in the world. Our access to first-class higher education and research institutions are becoming increasingly important as the manufacturing and engineering industries require a more skilled and educated workforce. With an increase in the number of people engaging in higher education – 37% above the OECD average –, this is an untapped advantage. Workshop participants in a study conducted by the CSIRO noted that the brightest graduates, specifically in the STEM fields – science, technology, engineering and mathematics – are likely to move into roles in businesses that support research and development.
2. Australian quality and standards
Australia’s reputation for quality and standards is very high. In our industry of heavy haulage trailer manufacturing, we must abide a variety of legislation requirements including the Australian Design Standards and the Performance Based Standards. Our goal, as truck trailer manufacturers, is to go above and beyond those standards to provide operational reliability and robustness of heavy machinery. Our quality assurance practice, business transparency and reputation for always delivering products of a high standard is valuable in a global marketplace.
3. Small and medium-sized enterprises
Australia is a nation of small to medium-sized businesses, taking up a 68% share in the market. Of the 80,000 manufacturing businesses in Australia, 87% of those are small businesses, employing between 1 and 19 people. This can work in our favour, as many SMEs can be nimbler and have strong innovation potential if linked to global markets. Compared to large businesses (who are likely to problem-solve internally), SMEs typically seek out specialists externally to develop solutions to their problems, creating a culture of collaboration.
4. Strong ties to booming Asian market
Australia’s geographic proximity to economic powerhouses China and India, opportunities for export, trade relations and business models will emerge. The high rates of immigration between the two countries, coupled with 2.1 million Australians speaking an Asian language, will see strong ties and create a reputation for Australia as the gateway into emerging Asian markets.
Other competitive advantages that the study touches on include:
- Early adopters – we are country known for beta testing new manufacturing technologies and are quick to adopt consumer devices
- Political and economic stability – with low levels of terrorism, social unrest and demonstrated economic resilience, Australia’s stability is appealing to global investors and collaborators.
- Natural resources – while we can’t compete with Asia, Australia has an abundance of non-renewable natural resources including gas, coal, titanium and uranium which are used heavily in the manufacturing industry.
- Intellectual property laws – We have a strong legal system which is great for protecting and supporting intellectual property
Of course, with advantages also come disadvantages or potential risks. CSIRO has identified the comparative disadvantages of the Australian manufacturing industry and how it relates to a global market. They are:
- High labour costs – making it harder to contend with low paying countries on price points
- Geographical isolation – this sees a rise in transportation costs, subsequently restricting access to certain global markets
- Small domestic market – our consumers are dispersed across the entire country, making it potentially difficult to achieve scale
- Digital infrastructure – Being digitally connected is integral to doing business in global supply chains. Currently, Australia ranks poorly, with our internet speeds listing 56th in the world.
- Public perception – with many automotive manufacturing facilities shutting down, many Australians believe manufacturing is a dying industry, limiting the number of potential students seeking it as a desired career path
- Quality and quantity of leaders – many businesses are family-owned. It’s something we’re proud of. But unless manufacturing businesses employ the right leaders, sophisticated approaches to innovation might suffer.
The Drake Group as a Brisbane-based engineering and trailer manufacturer servicing customers Australia-wide. We pride ourselves on durable yet versatile trailers, which go the distance thanks to our robust engineering, innovative design and durable materials that are completely customisable. Get in contact with us today to chat about your heavy haulage trailer needs.