‘Pioneers exploring in an empty space” says Gettler

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Leon Gettler (Cockatoo member) is a leading columnist with the Age. Herewith an extract of a recent article.

Policymakers say Australia’s affluence is in a consignment of iron ore headed for China. They believe such good fortune must come at the expense of manufacturing. Someone should remind them that reducing a country’s economic base is dangerous – in the 1990s, England embraced financial services while its manufacturing sector declined. Look at it now.

In its latest quarterly Statement on Monetary Policy, the Reserve Bank sees the resource sector as the future of Australia’s prosperity and warns that manufacturing will shrink. Similarly, Treasury secretary Henry has forecast an Australia in 40 years with a much smaller manufacturing sector.

A report by UTS professor Roy Green (http://bit.ly/3AkeRk) – part of a study by the London School of Economics – found that Australian manufacturing managers were at best mediocre, significantly lagging behind the US, Japan, Germany, Canada and Sweden. Chinese and Indian factory managers were a lot better. Australian managers were particularly bad at managing people and innovation.

Professor Green says Australian manufacturers need to work smarter, focusing on niches and developing clusters. Some manufacturers – e.g. implant company Cochlear and cutting tool maker Anca, which exports 95% of its products – are good examples of companies that have built niches and strong global markets. Australia, however, has few manufacturing clusters, most are just clumps. Research by Swinburne University sociologist professor Michael Gilding compared biotech clusters in the US with the Parkville precinct. Our biotechs are – same applies to other precincts, such as the IT sector in Clayton and Ryde. It’s very Australian – pioneers exploring opportunities in an empty space.

It contrasts sharply with Italy’s manufacturing sector – small city of Modena specialises in high-performance cars, home of Ferrari, Lamborghini, Maserati. Montebelluna, close to the Italian Alps, produces 65% of the world’s ski boots and home to Rollerblade skates. Sassuolo is the home of 150 tile manufacturers, producing 60% of all tiles traded internationally.

The only globally successful cluster in Australia is the wine industry, with intense competition among almost 2000 companies, combined with collaboration through industry associations.

Canberra-based industry consultant Rod Brown says business and governments need to identify high-value niches and then build collaborative frameworks, bringing in financiers as well. Aerospace is a prime example. “A proactive industry policy for aerospace would have a cluster program connecting the key players in Sydney, Melbourne, Adelaide and Brisbane, and tying in the outriders” Brown says. “An aerospace cluster would connect the dots with the CSIRO, relevant CRCs, training providers, VC providers, banks – and see who wants to collaborate and those who simply want to go it alone.”

Source: The Age

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