Start-ups may soon be looking at the manufacturing industry with renewed enthusiasm, with a new taskforce considering the development of a smaller, more tech-savvy manufacturing sector.
Industry and academic members of the taskforce, set up by Prime Minister Julia Gillard, will consider a US program titled Small Business Innovation Research.
Manufacturing Minister Kim Carr opposes the program, but academics are throwing their support behind it.
Roy Green, dean of the Faculty of Business at the University of Technology, says the Small Business Innovation program is an ideal driver of transformation, especially among small firms.
“Australian manufacturing operates mainly in low- and medium-technology areas,” Professor Green says.
“The big policy question is do you phase this out as you shift up the value chain or are there ways to reinvent these areas to make them competitive?”
The scheme offers companies R&D contracts to solve major business problems, under the proviso the government will consider purchasing the results if successful and economic.
Members of the taskforce have emphasised improving the linkages between companies and public sector researchers, identified by the program as a crucial way to transform industry.
According to the Australian Bureau of Statistics, only 2.4% of local companies collaborate with universities, indicating there is plenty of room for improvement.
Australian Industry Group supports the call for increased collaboration between companies and universities, saying it should be given a high priority, including within the taskforce.
The taskforce is one of two inquiries under way that could accelerate a shift to more innovative industries.
A working group is being urged by unions to extend plans to buy materials locally for major projects, from traditional metal-bashing to new inputs such as technology, mining equipment and software.
Former Queensland premier Peter Beattie is also emphasising innovation in his role as the government’s supplier advocate for the resources sector.
“If Australian manufacturing innovates, collaborates and goes global, it has a strong future in servicing the growing resources sector,” Beattie told The Australian Financial Review.
“Businesses that innovate are twice as likely to boost productivity, 2.5 times more likely to put on staff and five times more likely to go to overseas markets.”
According to Beattie, Australia needs to retool its companies and train its workers for industries such as clean energy, advanced manufacturing, mining and equipment, and the digital economy.