New AMGC report defines advanced manufacturing in Australia

Advanced Manufacturing: A New Definition for a New Era, analyses more than 3,000 global manufacturers to provide substantiated clarity to an industry undergoing unprecedented change, while also outlining key opportunities for local manufacturers.

The AMGC report also reveals that only five percent of firms drive 99 percent of total manufacturing exports, 94 percent of capital spending and 54 percent of the sector’s entire research and development. Meanwhile, 80 percent of Australian manufacturers could become more advanced by collaborating with researchers, increasing their information and communication technology (ICT) spend, introducing a new product-related service or by using patents to protect their ideas.

“Manufacturing is transforming, so we need a new definition to accurately measure who we are and where we need to go. Our research presents a real opportunity for Australian manufacturers. It shows that we have huge growth potential if we can emulate and adopt the advanced manufacturing characteristics unveiled in this report,” said Dr Jens Goennemann, Managing Director, AMGC.

The report calls for a new definition of advanced manufacturing which would focus less on production and more on the entire manufacturing value chain including higher value pre-production and post-production. In May 2017, the Australian Bureau of Statistics recorded 905,000 direct jobs in Australia’s manufacturing sector. Under the new definition this would rise to almost 1.3 million if indirect workers that supply inputs and services to manufacturing are included, for example, workers exclusively delivering research and development, design, logistics or services to manufacturers.

The report contains specific recommendations for government including policy, regulatory and funding. It also outlines three key characteristics of advanced manufacturers, as a blueprint for local organisations in the industry to emulate:

Advanced knowledge: Innovation leaders that score highly on measures such as R&D spending, ICT use and number of patents.

Advanced processes: Process winners that make smarter use of technology, scoring highly on capital intensity, use of automation, energy and water efficiency, and new equipment.

Advanced business models: Act as niche market players, scoring highly on measures such as trade intensity, linkages with other firms and greater share of services in total revenue.

The AMGC is now calling on the government to apply new statistics to track whether Australian manufacturers are advancing and to change how manufacturing output and jobs growth are measured in Australia