A message from Jens Goennemann
Last week I was invited to appear and provide my thoughts before a New South Wales Government Standing Committee investigating the procurement practices of New South Wales government agencies and the impact on social development.
A selection of NSW AMGC members joined me to provide their capable knowledge and expertise on this topic. The committee heard from Battery manufacturer Energy Renaissance, food manufacturer Harvest B, aerial vehicle manufacturer Carbonix, agritech manufacturer ICT International and multi-discipline contract manufacturer Romar Engineering.
I welcomed this opportunity to represent and give a voice to our NSW manufacturers, but the message can be echoed throughout all jurisdictions – Federal, State, Territory or Local Governments. We need to use procurement as a lever to grow Australian manufacturing.
You can read my opening statement below in full.
Opening statement: Jens Goennemann
Dear Chair – the Hon Dr Sarah Kaine and Committee members,
Good afternoon and thank you for inviting us here today to give evidence into this subject.
My name is Jens Goennemann, Managing Director of the Advanced Manufacturing Growth Centre (AMGC). We are an industry-led not-for-profit organisation that believes that Australia can transform from being a lucky country to a smart country through the manufacturer of complex things. I note that we are, at the current time, number 93 in the world of making complex things, so there is a lot of improvement possible. However we have a number of rather outstanding manufacturers are present here today.
For the past eight years, AMGC has been entrusted by Federal, State and Territory Governments to increase manufacturing complexity and capability, noting that manufacturing is precisely this: A capability, not a sector.
The five manufacturers joining me today represent a broad range of sub-industries. They have made and developed products and services that address everything from managing the way we use water, making the food we eat, assisting with land management and monitoring – to how we power our society and the medical devices and defence systems we need to sustain and protect our lives.
AMGC only works with promising companies, such as these, to assist in taking their competitive ideas from concept to commercial reality. In doing so, AMGC has amassed a substantive understanding of the barriers and opportunities to grow our country’s capability with Government procurement being one identified barrier.
We see that Government procurement does not work in full support of our most promising and capable manufacturers. For example, during the COVID-19 pandemic the callout from NSW Government to our local state manufactures to “tell us what you can do, and we will be your biggest customer” to only have billions of dollars spent offshore.
The decision to spend offshore was not made because capable NSW manufacturers couldn’t do it, it was because the people making the procurement decisions didn’t know where to look. In fact, to the day NSW doesn’t even know how many manufacturers reside here because Government relies on compromised data.
During the pandemic AMGC proved it was possible and enlisted NSW manufacturers to make invasive ventilators, hand sanitiser, protective equipment, emergency hospital beds.
Today, several of those manufacturers now have a diversified business supplying into global supply chains – like Jehbco Silicone in Brookvale, a plumbing supplier now part of the medical supply chain. While Jehbco’s success is great, it demonstrates an opportunity lost for manufacturer growth through procurement.
Government Procurement is not just a means to an end, but a means to a beginning for manufacturers. Following on from hard work to commercialise – which is where AMGC excels – early procurement wins can be transformative for local manufacturers – because more than just income, the endorsement that comes with having the Government as a customer, can be the difference between landing that larger international customer, or securing the capital you need from an institutional lender.
More broadly, ongoing long-term procurement agreements give manufacturers the confidence to reinvest into their business, increase R&D activity, take on more staff or expand and diversify their capabilities because the certainty of customer orders are strong.
As a State that represents almost one-third of the nation’s manufacturing output, it is unfathomable that Government procurement isn’t better leveraged to support those manufacturers to scale and grow who are capable to do so. Thank you.