June 9, 2022

We have before us a great opportunity to reignite Australia’s manufacturing sector and take advantage of the overwhelming optimism that exists amongst businesses and industry associations. Trade disruptions due to COVID-19 have companies working to onshore more of their supply chains and the closure of borders has largely halted skilled migration, demanding a fresh approach to sourcing skilled labour.

A highly skilled workforce is the cornerstone of a strong economy, and the pandemic has provided Australian manufacturing with renewed opportunities to reclaim sovereign capability across manufacturing. However, if it is to become the cornerstone of Australia’s economic future, skills development must be a key focus. In the words of Australian Industry Group CEO Innes Willox,You don’t have industry if you don’t have skills.”

Last year, IBSA Group released its Scaling up: Delivering Modern Manufacturing through a Skilled Workforce report to further the conversation around the skills needs that Australian industry and its workforce require to deliver a vibrant, modern manufacturing industry, and the actions needed to rebuild our economy.

In putting together the report, IBSA conducted an extensive series of research and national industry engagement which sought the views of industry stakeholders who are active in a wide range of manufacturing sectors, through their businesses, industry associations or as employees.  Over 500 stakeholders participated, representing thousands of businesses.

The data and findings were analysed to develop the report, which identified the priority actions needed, and proposed strategies, to ensure Australia has the highly skilled workers required to support modern manufacturing.

According to then Australian Chamber of Commerce and Industry Chief Economist Dr Ross Lambie, “Australia needs a strong modern manufacturing sector to be globally competitive, but to produce innovative products we need to overhaul our education and training sectors. We need quality training that is jobs-focused and delivers skills right across the supply chain.”

IBSA found a strong and clear consensus from manufacturers, training organisations, peak bodies and unions operating within the sector that a skilled workforce is vital to achieving a competitive manufacturing industry able to address Australia’s most critical needs. It also found a real sense of confidence amongst participants regarding the future opportunities that exist within the sector, and strong support for the Scaling Up report’s key recommendations. These include increasing sovereign capability, addressing national skills shortages, investing in new technology and new skills, increasing skills system responsiveness, the need for greater collaboration between industry, VET providers and higher education, and workforce development that prioritises the upskilling and reskilling of workers.

In terms of sovereign capability, industry has emphasised the current strength of Australian manufacturing capability, both in the six priority areas identified in the Federal Government’s Modern Manufacturing Strategy but also in more traditional manufacturing sectors. If there is to be significant expansion, it will require the development of a workforce strategy that supports both the onshoring of production and supply chains for essential goods.

Establishing a Workforce Development Strategy for modern manufacturing, that has apprenticeships as the bedrock of entry-level training and prioritises the reskilling and upskilling of existing workers, is needed to deliver the framework for advancing the sector. This will lead to more work-based learning and apprenticeship training opportunities that create pathways to higher skills development.

There is no doubt that the manufacturing sector wants to see a system of apprenticeships that incorporate extensive STEM-based skills and provide qualifications equating to a diploma or advanced diploma. We heard the for greater recognition of apprenticeships as pathways to higher qualifications and higher learning, and more collaboration between industry, VET and Higher Education sectors to create synergistic skills development pathways.

Embracing new opportunities in areas we have a competitive advantage, requires building a workforce skilled in product development, new technologies, design and prototyping, along with gaining efficiencies through sustainability and collaborative skills.

This will enable the development of integrated, innovative systems and business models across subsectors and design, production and distribution teams, as well as between training organisations and industry. Most critically, industry must be allowed to lead this process through the establishment of priorities and the setting of standards. 

Governments are also committed to reskilling our workforces which is incredibly encouraging and exciting for Australia’s manufacturing and related industries. In addition, the recently announced Skills Reforms to the Vocational Education System provide a welcome opportunity to overhaul the system, so industry plays a central role in delivering improvements in the performance, efficiency, transparency and confidence in the VET sector.

Now is the time for all of us invested in skills training in Australia to be bold and determined. To work alongside industry and to propose and, most importantly, get stuck into, implementing practical solutions that will deliver relevant, dynamic training programs. These programs must meet the skills needs of current and emerging employers and industries, and attract school leavers, the unemployed and current workers to the real, skills-based career opportunities available in manufacturing. 

There is no doubt that the Australian manufacturing sector is ready to share its expertise, energy and insight to position the sector and the Australian economy for continued productivity and prosperity for generations to come. With a renewed sense of confidence, it stands ready to take back its sovereign capability and invest in developing highly-skilled workforces that support modern manufacturing and associated industries.

Sharon Robertson, Chief Executive Officer