Make no mistake – AM does represent an opportunity for local manufacturing to reinvent itself. It fundamentally provides a new basis for competition for Australian manufacturing, and could move the local sector away from the areas where it cannot compete – that is, manufactured products where cost alone is the market driver.
However, there are some fundamental barriers to adoption that need to be considered.
The stark reality for many SME manufacturers is that the skills and resources to successfully approach the AM issue will not reside within the business currently, and they will need to reach out to the research community and other advisers to assist in the process.
Australia continues to rank poorly in regard to global measures associated with our investment in innovation, and in regard to the efficiency of our innovation system.
The other key issue raised here is around the way in which manufacturing integrates with the research and development community.
In the most recent international rakings released by Insead in Paris, the efficiency of Australia's innovation system saw us ranked 81st in the world. We need to be seeing greater results for this investment as a nation.
By definition, the uptake of AM techniques and processes, especially amongst the SME manufacturing community will rely on these traits to be reversed.
One of the starting points for Australian manufacturers is understanding what business outcomes AM offers their firm, and what competitive risks it represents.
For many small businesses, it is important to look at some simple questions in regard to what is an endlessly complex area.
Does AM offer a way for companies to differentiate themselves, gain access to new products and markets, improve product development activities and reduce the costs of doing so? Importantly, the international experience around the uptake of AM is seeing supply chains being redefined as different tier levels are taking on tasks that were previously performed by other companies.
Australian manufacturers need to consult with their suppliers and customers to make sure AM techniques solidify their position in supply chains rather than removing them.
Realistically, for the majority of SME manufacturers these questions are being addressed for the first time, and will represent a new way of thinking within their businesses.
And what is the role of industry policy here?
The Federal Government’s recent Industry Innovation and Competitiveness Agenda affords a special place for AM. It has been highlighted as one of five targeted growth sectors across the economy, and a particular focus around foreign investment in the field has also been highlighted.
The development of an Advanced Manufacturing Growth Centre to foster greater collaboration both between businesses and with the research sector is also an important development.
These are progressive developments that align with the Federal Government stated vision of shifting manufacturing policy away from handouts toward other catalysts for activity in the field.
But as with all government programs – they will be measured by the extent to which the private sector engages.
This is where the rub comes in regard to our traditional reticence to invest in innovation and plan for the long term.
From a broader policy perspective, it is also important that the impact on Australian manufacturing of the proposed FTA with China is fully understood, and that collaborative opportunities around advanced manufacturing are encouraged by the agreement.
The demise of the automotive industry in this country has indicated that large swathes of the manufacturing sector can simply disappear.
There were steps that could have been taken over many years from both and industry policy, and firm level perspective that could have avoided this outcome.
Advanced manufacturing techniques offer a more sustainable path forward for manufacturing in Australia and in regard to policy intent, the Federal Government has laid a potential foundation for the roll-out of AM practices.
The ultimate contribution that this makes to the success of Australian manufacturing will depend on the extent to which individual companies, and the research community buck the long term trend and engage.
