Australian manufacturing today is at its lowest point ever. During the 1960s, local manufacturing accounted for over 30 per cent of GDP. Currently, that figure is just 5.6 per cent of GDP. Australia can afford to transform manufacturing into an economically viable, environmentally sustainable and job-creating sector. For that, we need a strategic and long-term approach.
Last week, Grey Innovation Executive Chairman Jefferson Harcourt addressed an Australia-ASEAN business forum in Melbourne highlighting his company's response to supply chain pressure during the pandemic. It proved that when governments commit to onshore production, Australia can produce excellent products meeting international demand.
“There is a fantastic manufacturing supply chain here, we had all the pieces; because we’d grown up in that whole network. We obtained a license for a ventilator from Smiths in London, we put together a network of fifty manufacturers and we all went to work. We had our first ventilator rolling off production lines within four months and through the regulator.
The key is that firstly, we were in the position where we didn’t have critical equipment. It comes back to policy. We couldn’t make masks. And here’s where it gets interesting. The thing that kicked it off and made it happen was a government purchase order, not a grant, but a PO, and when you look at the role of government procurement, it drives innovation.
This is an economic forum; we're talking about supply and demand. We have a lot of supply side effort on innovation. We have lots of grants, we have government funding for universities; but where are we on the demand side? And that’s where we don’t have economic cycle for innovation. I think until we do, we don’t really have a functional innovation system.
Health Purchasing Victoria purchased masks, finally, from a factory in Shepparton. It was in the news, it was exciting, the army was out there, and we could breathe a sigh of relief that there’s one factory in the whole country left that could make these masks when we couldn’t buy them from anywhere else in the world. Within nine months, they were laying staff off because we’d gone back to purchasing those masks from overseas.
We’re talking about investment in supply chain. Let’s look at the role of the government as a customer and how we can help them and ask why we don’t buy our own innovation. That has to change and I think that we can easily change it. We’ve demonstrated we can.
The key is, it sets you up for a relationship with government to get a purchase order, just like we did with the ventilators. Do that and we have a very exciting future. Let’s take the opportunity to build industry here – we’ve demonstrated time and time again that we can step up to the plate when the opportunities are there. 99.7% of the Notus ventilator was made here in Australia. It’s a great story and shouldn’t be a one-off."
Jefferson Harcourt panel discussion "Investment in Advanced Manufacturing/Supply Chain"
The one-day Australia-ASEAN Business Forum highlighted the opportunities, challenges, and case studies by thirty industry champions on five industry sectors: Advanced Manufacturing, Education, Health & Medical Industries, Digital Transformation and Food & Agriculture.