Manufacturing has ‘fallen off the page’


Denham Sadler
Senior Reporter

Australia’s manufacturing sector is lagging the rest of the world and had “almost fallen off the page”, with a renewed focus on innovation needed to close the gap, UTS Innovation Council chair Roy Green says.

The recently released Bloomberg Innovation Index saw Australia continue its slide down the world rankings. With an overall score of 74.13, far behind ladder leader Germany with 88.21, Australia fell one spot from last year to 20th in the world.

Germany broke South Korea’s six-year run as the most innovative nation in the world, according to the 2020 Index. The United States ranked ninth, while China ranked 15th.

Manufacturing
Big problem: Australian manufacturing struggles

The Bloomberg Innovation Index analyses a range of criteria through seven metrics, including R&D spending, manufacturing capability, and the number of high-tech public companies.

Australia ranked highly in terms of productivity, coming in at 8th in the world, and was 21st in terms of high-tech density and 18th for R&D intensity.

But when it came to manufacturing ‘value-added’, Australia ranked at 55th out of the 60 countries analysed.

Professor Green said this is very troubling for innovation in Australia.

“This innovation index shows once again that while Australia lags marginally in expenditure on R&D as a share of GDP, it almost falls off the page when it comes to manufacturing value added,” Prof Green told InnovationAus.

“Ranking at 55 out of 60 countries featured in the index, Australia is positioned between India and Brazil.”

This could be partly the result of Australia’s resource-rich history, Prof Green said.

“Significantly, most of the countries in the top 10 for innovation lack Australia’s resources wealth, which has been depicted over the decades as a ‘resources curse’, given its impact in squeezing out manufacturing from our export mix,” he said.

To improve the ranking and Australia’s competitiveness on the world stage, there must be a concerted focus on advanced manufacturing and innovation, he said.

“The challenge for the future will be to revive and reinvent our manufacturing capability as our commodity exports experience greater volatility and in some cases diminishing returns,” Prof Green said.

The federal government has made some efforts in the space. Late last year the $50 million Manufacturing Modernisation Fund was unveiled, offering SMEs grants of up to $1 million for technology-based projects.

The fund is designed to help “manufacturing businesses innovate and develop competitive advantage so they can thrive globally”, Industry Minister Karen Andrews said.

“Investing in technology can transform businesses, enabling them to become more productive, manufacture new products and create new jobs,” Ms Andrews said.

“Strengthening our core and emerging manufacturing industries is a key part of the government’s economic plan to create 1.25 million new jobs over the next five years.”

The Queensland state government also recently opened the third funding round of its similar initiative, Made in Queensland, which offers grants of up to $2.5 million for SME manufacturers in the state looking to make innovative improvements to their businesses.

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