Domestic economic sovereignty and onshore manufacturing capability have remained in focus since the onset of the COVID-19 pandemic, and its impact on international supply chains and geo-politics.
In many respects, the world as we know it has changed forever. We are in a new paradigm, a post globalisation era. Geo-political changes and global parities have forced Australia to rethink its dependencies.
Developed countries, like ours, are looking to shore up domestic supply chains and manufacturing capability in critical areas to ensure greater and ongoing self-sufficiency. It’s forced some navel gazing and acceptance of hard truths.
In the Australian context, it’s a realisation that we had let our manufacturing sector languish to the detriment of all. From the glory days, post-World War II where one in three Australians worked in the manufacturing sector during the 1950s and 60s – that figure is now just one in 13. In the 1970s, the manufacturing sector made up 30% of Australia’s Gross Domestic Product, but that has dwindled now to about 6%. It would seem, until very recently, we were comfortable in exporting our raw resources to others to add value, only to then import finished products. Not really a path to long term sustainability and self-sufficiency.
In the nick of time for Australia – and one of few positives to come from the global pandemic – has been the realisation that this trajectory must be reversed for our nation to remain resilient and prosper for generations to come. It’s at the core of the Australian Government’s $1.3 billion Modern Manufacturing Initiative (MMI), the centrepiece of its Modern Manufacturing Strategy, which aims to provide the necessary investment and support for to create long-term change for Australian manufacturers.
To me, the initiative’s development acknowledges the role of a thriving domestic manufacturing sector. The former way of doing things is a one-way track to an undue reliance on global markets, international trading partners and supply chains which we have learnt over the course of the past 15 months or so, are not always robust.
The strength of domestic manufacturing also has a profound effect on employment of individuals, and in turn the health of local communities and economies.
A service-industry based society does well during the good times but as we’ve seen, can be disrupted and knocked off course quickly resulting in mass unemployment which carries with it a multitude of social and economic issues. A nation with high-quality manufacturing capability has inherent stability and greater long-term sustainability. It builds sustained human capabilities and an innovative culture which then goes into other sectors of the country.
Read the full article published on LinkedIn: Australia’s Nation Building with thriving manufacturing sector