In June 2020, communities in the Australian manufacturing sector published the ‘New Deal for Manufacturing’ plan to support growth and innovation. Academics, industry experts and other actors in the sector contributed to what is considered a request for support from state and national governments. The plan comes ahead of a projected recession – the first the country has seen in nearly 3 decades – as a result of measures taken to counter the spread of COVID-19. Find out key elements of the New Deal plan for Manufacturing in Australia, and the potential for growth and development of this industrial powerhouse.
Legal compliance requirements in Australia
Australian manufacturing communities push for self-sufficiency
In April 2020, organization @AuManufacturing – with support from Bosch Australia Manufacturing Solutions – and LinkedIn group Australian Manufacturing Forum (AMF) – lead a campaign to crowd-source a modern policy to support the manufacturing sector in Australia. One key driver for contributors to the New Deal plan for Manufacturing is to seek commitment from the government to work towards self-sufficiency for Australian manufacturing and industry. Professor Roy Green, editorial and advisory board member of @AuManufacturing, says “it is clear from both theory and experience that Australia’s problem lies not in any lack of talent but in the absence of a coherent and effective national industrial strategy.” Green goes on to say that “while the Covid-19 crisis has exposed and accentuated this problem, it also provides the opportunity for a fundamental reassessment and redesign of our outdated industrial structure.”
5 ‘building blocks’ for success in Australian manufacturing
The New Deal for Manufacturing plan outlines 5 basic strategies to support a more innovative and self-sufficient Australian manufacturing sector. Though a powerful sector in Australia currently, effects of COVID-19 and lack of institutional support for the sector challenges the manufacturing community.
1. Call for innovation and stronger policy-making in Australian manufacturing
The first building block in the crowd-sourced plan aims to strengthen Australia’s policy-making capabilities. Notably, the Plan recommends establishing a National Industrial Strategy Commission to develop and set national policies and priorities for Australian manufacturing. A key focus for this Commission would be to develop modernized industries that incorporate and integrate new technologies and business models. A National Industrial Strategy Commission would spearhead analyses of the competitive advantages and opportunities for Australian manufacturing, build robust policies, and fund research and development (R&D) to promote the sector domestically and abroad.
2. Greater collaboration between industry and researchers
The New Deal plan advocates for greater connections between industry and research organizations to support innovation and R&D. The plan posits that Australian government and business underspend on research and innovation compared to the OECD average (1.79% of GDP). The plan also pushes for greater attention to be paid to engineering and information technology, comparing the amount of R&D efforts placed in these areas to the country’s thriving medical technology and pharmaceutical sector.
3. Comprehensive business services and infrastructure
The third building block for success in Australian manufacturing refers to delivering quality business services and infrastructure for connecting regional concentrations of related industries. In particular, this aspect addresses the need to support entrepreneurial startups in Australian manufacturing, and acknowledges their contribution to the country’s economic recovery and industry growth. Improved support for Australian manufacturing should therefore facilitate startup activity and support the upscaling of ventures to compete in the global context.
4. Procurement policies that support local business and research-based manufacturing
The New Deal for Manufacturing plan highlights an issue small and medium manufacturing companies may be facing when competing for local tenders. The fourth aspect of the plan advocates for greater involvement from the Australian government in ‘capability-building and the development of critical mass in local supply chains.’ Small and medium businesses have the potential to contribute to a more robust industry in the country, and with the right support can become globally competitive. The plan also discusses that initiatives designed to support small businesses can also work to attract further FDI into the country.
5. Develop workforce and management skills
The fifth element of the plan addresses workforce and management goals for the Australian manufacturing sector. In particular, there is concern that Australia’s workforce may lack structured education and training to maintain and develop the workforce and management capability in manufacturing. The plan advocates for vocational training; in particular, it promotes a reboot of Australia’s Technical and Further Education (TAFE) system. According to the plan, Australia can expect a loss in university revenue as a source of funding for teaching and research in this sector. The sector may therefore face challenges to maintain skills and education. This is considered essential to further fuel the growth of Australian manufacturing industries.
Future-focussed Australian manufacturing
In the New Deal for Manufacturing plan, the Australian manufacturing community appears motivated to modernize the industry and build a more robust framework to support its development. The sector received AU$131.4 billion in FDI in 2019, the second-highest amount behind mining and quarrying (AU$360.1 billion), making up 12.9% of all FDI inflows. There is great potential for innovation and the introduction of new technologies in Australia’s manufacturing sector, and also a need to address certain challenges it faces.
Work with local legal and accounting experts to establish your Australian manufacturing operations
The Australian manufacturing sector offers many opportunities for businesses with innovative solutions in technology, research and development, education and training, services and infrastructure. Companies looking to develop their manufacturing operations in Australia should carefully consider the requirements to enter the market and their legal and accounting compliance obligations according to Australian law. Foreign companies entering the market should seek the guidance of a knowledgeable local provider who can guide them through necessary processes. At Biz Latin Hub, our Australia team is ready to assist with your company formation, hiring, commercial representation, accounting and other legal needs to ensure you can begin operations as quickly as possible and in full compliance with local regulations. Reach out to our team today for personalized assistance. Learn more about our team and expert authors.
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