Australia’s strategy for modern industry #ST47
The Australian Manufacturing Modernisation Strategy was developed by the Department of Industry, Science, Energy and Resources in October 2020. The integration of new technologies and moving further up Australian products value chain are the guidelines of this strategy.
Australia’s strategy for modern industry
Science at the heart of industry development policy
Cathy Foley, the Australian Federal Government’s Chief Scientist, gave a speech at the National Press Club on March 17 to explain the Australian Department of Industry, Science, Energy and Resources’ strategy to put science at the heart of Australia’s industrial development policy. Her speech emphasised the need for fundamental science that leads to practical applications, but also the importance of an environment that enables the development of these technological solutions, i.e., one that is conducive to interaction, has an effective financial model, and has the support of society to ensure a significant impact of the technologies developed. Her role as chief scientist, she says, is to build connections and partnerships between the research and implementation/commercialisation sectors. Four critical issues were identified: artificial intelligence and quantum computing (in which Australia has invested heavily), education (to develop the workforce to design, develop and use new technologies), diversity (to harness the full spectrum of human potential), and open access to information (to unlock opportunities for innovation and commercialisation of scientific discoveries).
This message reflects the Australian strategy for modernising Australian industry developed by the Department of Industry, Science, Energy and Resources in October 2020, which aims to establish a high quality, sustainable industry capable of supporting the resilience of the Australian economy.
The Australian Department of Industry, Science, Energy and Resources’ strategy
This strategy is based on the fact that industry is a sector that enables the valorisation of products from almost all fields of activity. To this end, industry must be agile and resilient in times of crisis, and more importantly, rely on new technologies and R&D to produce high value-added products, which Australian industries are not doing enough of. In the short term (within 2 years), the country should have built a business environment which is supportive to industrial growth. In the medium term (within 5 years), the country should benefit from an industry focused on strategic areas, pushing the country’s productivity and competitiveness. Finally, in the long term (within 10 years), productive and competitive companies with high impact sectoral growth should be established in the country.
Four strategic axes:
Establish a supportive business environment:
The government intends to take measures to adapt the tax system (especially tax incentives to foster R&D), reduce the cost of energy (especially natural gas), simplify the regulatory framework, and reduce the cost of administrative procedures, to encourage investment and growth. Measures will also be taken to promote the integration of new low-emissions technologies and economic opportunities (with the Low Emissions Technology Statements guidance and the establishment of the $95 million Technology Co-Investment Fund), and to train a workforce in strategic priority areas (with the JobTrainer program). The establishment of the Global Business and Talent Attraction Taskforce is expected to increase international business opportunities and improve Australia’s industry networks. Finally, measures to simplify regulation and increase trade transparency will be implemented.
Making science and technology work to transform industry:
The strategy calls for fostering strong links between researchers and industry to develop knowledge transfer, innovation and original solutions, especially by integrating digital technologies (AI, blockchain and cyber physical systems). More than Au$50 million is being invested to help industries modernise and become more competitive (through the Manufacturing Modernisation Fund). Funding of Au$1 billion is expected to support the research system (Research Support Program), and around Au$40 million to develop pilot business-research initiatives (Strategic University Reform Fund). Tools will be developed to support the digital transition of industries (with training and assessments to encourage industries to integrate digital technologies, but also initiatives for the regulation of technologies, cyber security etc).
Building on Australia’s strengths for a thriving economy:
The report identifies 6 sectors that present opportunities for Australia.
• Resource extraction technologies and critical mineral processing: Australia is rich in mineral resources, has experience in their exploitation, and has invested in R&D in this sector (development of autonomous vehicles, underwater technologies, etc.). The development of technologies for the transformation of critical minerals presents opportunities for valorisation.
• Food and beverages: Australia is recognised for the quality of its products, is supported by its scientific expertise, and will be able to benefit from the growth in demand.
• Medical products: The country has a strong medical research base and this industry should benefit from an aging demographic and growing demand.
• Recycling and clean energy: The country has the scientific expertise, the renewable and mineral resources, and the geographic space to develop major energy projects, as well as recycling and reprocessing of used products.
• Defense: Australia’s defense industry is developing its international competitiveness and should benefit from the integration of its products into advanced supply chains, as well as government demand, to support national security.
• Space: In this area, Australia has the advantage of scientific expertise, geographic location, and state-of-the-art infrastructure. The sector should take advantage of growth in the field of new space, and should integrate the developments of other industries in robotics, automation, and communications.
In all these areas, the industries should benefit from their proximity to Asian markets.
Roadmaps in each of these sectors should define the actions and investments to be implemented by the government and the industries. An initial government investment of Au$1.3 billion (Modern Manufacturing Initiative) should encourage private investment and push industrial growth to a more ambitious scale.
Building national resilience for a strong economy:
The Covid crisis underscored the importance of diversifying sources of supply, as well as the agility of Australian industries to meet demands. The government aims to strengthen these critical capabilities of Australian industry, but also to better coordinate supply chains (Supply Chain Resilience initiative, funded at Au$107 million). Work expanding free trade agreements should help diversify markets and cooperation with key partners.