Can innovation be underpinning a Manufacturing Renaissance?
By Tim Hanley - September 13, 2012
I had the privilege of speaking a few weeks back at the Australian Industry Group National Forum, the premier industry event which is held annually at Parliament House in Canberra, Australia. More than 350 CEOs, senior executives, and government officials listened to an array of local and international speakers address some of the major issues and big ideas on Australia’s national agenda together with strategies to improve the industry competitiveness. It was quite an honor to be invited to participate in this session.
During my presentation, which was featured in ABC TV’s The Business program (see video clip) I shared perspectives of how innovation is at the heart of what some are calling a “Manufacturing Renaissance” or an industry revival. Often overlooked as a place for innovation, manufacturing continues to be on the leading edge of innovation. You just have to look at the bold innovation plays that are happening today in areas such as advanced materials systems, additive manufacturing, and sustainable mobility.
The innovation game, however, is changing rapidly. To develop differentiated products and services at a faster pace and with limited research and development resources, companies are realizing the need to fundamentally change their approach to innovation. Global manufacturers are increasingly seeking more collaborative innovation opportunities both on national basis and on an international scale to derive greater value from their innovation efforts.
A new report, Smarter Manufacturing for a Smarter Australia, which was released by the Australian Prime Minister’s office just prior to the event, served as a prelude to the discussions at the forum. The report emphasized the need for Australia to build manufacturing scale and also brought to light several challenges currently facing the country, including a comparatively high cost structure, a smaller scale globally, and a somewhat remote location. It also highlighted opportunities for the country to develop innovation-intensive manufacturing niches, such as mining equipment, medical devices, and aerospace and defense. In addition, the report identifies a number of sectors that Australian manufacturers can play in which also has potentially broad reach across Asian markets: including automotive components; clean energy and environment; food and beverages; health and medical; and infrastructure and building materials.
I was fascinated to learn about the world class research that happens in Australia and as I connected with business, government, and university leaders during my visit it was clear to me that this could serve as a real competitive play. My tour of the innovation in action at Swinburne University was also a real highlight.
The challenges and opportunities faced by Australian manufacturers are not too dissimilar to that in other countries, particularly those in developed markets, with a higher cost structure. The brighter view here is that there certainly seems to be ample opportunity in Australia for further collaboration between companies, suppliers, customers, and a strong university system.
2011 Global A&D Industry performance wrap-up
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A report by the World Economic Forum in collaboration with Deloitte Touch Tohmatsu Limited.
Tim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 32-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.