Manufacturing - adding value to Australia

Australian manufacturing is a vibrant, world-class competitor in the global marketplace. Employing almost 13% of Australia's workforce, the industry provides over 30% of exports (and 75% of merchandise exports), accounts for almost 50% of total industry investment in R&D, and has expanded its output by over 20% in the last ten years. Our manufacturing industry is meeting the challenge of positioning Australia as a key player in the world's fastest growing merchandise sector Ð high value added manufactures.

Some benchmarks of Australia's manufacturing industry include:
• Australian manufacturing is now significantly more competitive than 10 years ago when the first steps were taken to open the economy.
• Our largest sector, manufacturing, has an annual output of $75 billion (13% of GDP).
• Over 60,000 manufacturing businesses employ 1.1 million people, 90% of whom are employed full time.
• Annual manufacturing exports exceed $55 billion and are growing at an annual rate of about 20%.

Australia has undergone substantial microeconomic reform in the last 10 years, unilaterally reduced tariffs, and developed strong macroeconomic settings and links into Asia and the Pacific. Arguably becoming the western world's most open economy.

A world leader in moving towards an open and professional business environment almost half (45%) of the workforce has university, trade or diploma qualifications.

Australia can also boast the second highest internet usage in the world, with 47% of homeowners owning a computer. This level of computer literacy has attracted new technology-intensive industries; who are also seduced by the competitive environment and relaxed Australian lifestyle.

Productive and efficient, Australia has an international brand image for competitive, quality products and services.

Exports rise in all areas

The telecommunications, information technology, machinery and equipment, food and beverages, basic metals and automotive sectors are significant exports for the Australian economy.

Sectors with the strongest export growth in 1999/2000 included the strategically important motor vehicle and component industry, which increased exports by 29%. Office machinery exports rose by 38% and pharmaceutical (including veterinarian) also proved to be a strong performer in 1999/2000 with a 29% increase in exports. Wine and beverage exports rose by 27%.

At the same time, industries such as textiles and clothing have found new markets by redefining their mission and moving from low-profit competition with mass-produced imports into high-value fashion exports.

Resurgence of Australian manufacturing

In addition to industry and economic reform a number of other factors have contributed to the regeneration of Australian manufacturing.

Firstly, Australian manufacturing has benefited from access to low-cost agricultural, mineral and energy resources, and the availability of a mature and highly skilled workforce.

Australia has higher levels of education and greater depth of engineering skills than any other regional country, with the possible exception of Japan.

Secondly, the structure and comparative strength of Australian industry have enabled Australian companies to exploit increasing globalisation and specialisation.

For example, Australian companies developed a high level of expertise in small-run manufacturing over decades of comparative isolation from world markets. This put them in the forefront of producing products to meet specific needs and niche markets.

Globalisation also provides companies with ready access to components and technologies that are not manufactured domestically.

No less important has been Australia's strategic position as the southern anchor of the rapidly growing markets of Asia.

The Asia Pacific Economic Cooperation countries (APEC) account for over 70% of Australia's exports. Japan remains Australia's largest export market, taking 19% of total exports followed by the US and Korea.

Part of Australia's interest in the international community is a reflection of its own population which embraces cultures from over 160 countries.

Migrants from all over the world have enriched the Australian culture and introduced a unique blend of skills and expertise that has been an important factor in manufacturing's export success. As 17% of the population speak a language other then English at home, Australia is well placed to interact with the international marketplace.

Making it easier
The Australian Industry Group (Ai Group) has played an important role in promoting industry restructuring.

As the leading national representative of Australian manufacturing, the Ai Group operates a comprehensive range of services to assist manufacturers and new business.

Ai Group has business co-operation agreements with counterpart employer organisations around the world. Through this network member companies can access information and local expertise in a wide variety of export markets.

Information provided by:
Bob Herbert
Chief Executive
Australian Industry Group
www.aigroup.asn.au