Australia manufacturing needs to get skilled or lose out – new study

Australia needs to step up its manufacturing skills in the next decade or risk falling behind other nations, according to a new study by the Australian Workforce and Productivity Agency.

The manufacturing workforce study report examined Australia’s manufacturing shift from heavy industrial manufacturing to technologically advanced manufacturing. It recommended key areas in which Australia needs to lift its game in order to remain competitive.

A broad recommendation was for Australia to transition to a sustainable, globally competitive manufacturing base. To do this, enhancing management skills and positioning the workforce for adjustment and renewal are needed.

Australian Industry Group chief executive Innes Willox said the report showed Australia needs to transition to a more diverse, high-end manufacturing base. He said the country needs a stronger focus on research, innovation and “more niche manufacturing of complex high value added goods”.

Other recommendations in the report included the promotion of manufacturing as a rewarding career choice, focusing on creating capable apprentices and increasing engagement with universities to secure a pipeline of skilled workers.

A core suggestion was addressing the increasing demand for STEM skills (science, technology, engineer and mathematics). It was also suggested that Australia increase the diversity of skills in the manufacturing workforce.

“The skills challenges for the industry are significant,” Willox said. “Currently 45% of the manufacturing workforce does not have post-school qualifications while 87% of the jobs in the industry require this.”

“Employers responding to Ai Group surveys report considerable difficulty recruiting individuals with STEM skills especially technicians and trade workers (41%), professionals (27%) and managers (26%).”

Manufacturing Australia executive director Ben Eade told SmartCompany this morning he supports the principle of the findings, but says it is important to be careful how Australia characterises the transition of the sector.

“I support the concept that we need to create high-value output…but that doesn’t mean what we have already isn’t innovative,” he says.

“For example, CSR was listed as 18 of BRW’s 50 most innovative companies… and they have around 20 patent licences under way.”

He says the report’s proposal that Australia focus on high-end or technology focused manufacturing could be a “jarring transition”.

“Our manufacturing base has around 900,000 people… there has been a rationalising of manufacturing over several decades. What has happened is that we are a boutique nation with high costs and we can’t compete in the high cost, low value manufacturing.”

He says in the next decade Australia needs to play to its competitive advantage.

“Our advantages are our highly skilled employees, our proximity to Asia and our abundant energy resources that we are not making the best of,” he says.

Eade supports the view that Australia needs to invest more in manufacturing skills training, however says that countless Australian manufacturing companies, particularly those of a larger scale, are already investing in skills and training for staff.

He says he understands smaller manufacturing businesses may be relying on external training resources to obtain skilled employees, and thinks that policies need to respect this.

Eade acknowledges the sector has had negative press, with key closures of Holden, Ford and Toyota, but says potential employees could be shown the sector is much broader than the car industry.

“Manufacturing jobs are really good jobs. It supports stable jobs, long-term employment in suburban areas, good pay and it is an industry that people structure communities around.

“It is the foundation of middle-class Australia…these jobs are attractive.”

The full findings of the report will be released today at a Manufacturing Skills Australia industry forum in Melbourne.