Defence industry has been included as one of six key areas of focus in the government’s $1.5 billion Modern Manufacturing Strategy (MMS), but there are questions over whether the roadmap will deliver wider benefits to Australia.
The MMS was established to "strengthen Australia’s manufacturing capability by helping manufacturers scale-up, become more competitive and build more resilient supply chains."
The Defence National Manufacturing Priority road map outlines more specific manufacturing growth opportunities in the defence sector and sets out plans to realise an “Australian defence manufacturing base which delivers world-leading capabilities for the ADF and responsible exports in our national interest."
Under the plan, manufacturers will invest more in addressing Defence priority capabilities and improving ‘linkages within the defence ecosystem’ within the next two years.
The five-year target sees greater manufacturing capability and increased participation in defence supply chains by Australian businesses, and in particular, smaller manufacturers will scale up to create “the underrepresented ‘middle’ of the defence industry."
In a decade, it is hoped that “more Australian businesses will be contributing to local and international defence supply chains, while more Australian innovation and intellectual property will be contributed to products supplied to the ADF and other markets."
In order to reach these goals, the road map outlines growth opportunities within three main areas: the defence sector, international markets and cross-sector applications.
The road map identifies potential for growth within the defence sector by leveraging emerging technologies and scale manufacturing of products and components which support ADF priorities.
Internationally, there is opportunity to expand capabilities to service new and existing export markets in products such as armoured vehicles, advanced radar systems and patrol boats, according to the road map.
Manufacturers can also look to diversify cross-sector applications, such as space domain awareness equipment, including sensor networks, and medical countermeasures, including diagnostic tools and personal protective equipment.
The road map outlined a number of actions to be taken by Government and industry in order to capture these opportunity areas, including: investment into defence capability priorities in order to drive productivity, skills and innovation; investment into demonstrating or commercialising products that have a potential for export; and adapting non-defence technologies to contribute to defence priority capabilities.
However, Dr Jens Goennemann, Managing Director of the Advanced Manufacturing Growth Centre (AMGC), identifies a number of challenges ahead.
“Each initiative is only as valuable as its implementation,” Dr Goennemann said to ADM. “To have a roadmap developed by one ministry for another makes me wonder if this is the best precondition for success – it certainly has not been so in the past.
“We are now at our seventh industry minister since 2014. This is not the best track record to develop, and stick to, an industry policy that delivers long-term results," Dr Goennemann said. "As far as manufacturing is concerned, it is only now that Australian politicians start to appreciate manufacturing capability – civil and military."
Dr Goennemann also highlighted the challenge of turning contractual AIC obligations into results that benefit all of Australia.
"We have secured the obligation from our offshore defence suppliers that the majority of significant projects are manufactured onshore – and there is a big difference between the ‘holistic’ term of manufacturing and to just put something together like a piece of Ikea furniture," Dr Goennemann said.
"Currently, Australia’s capability to manufacture complex things, measured via the Economic Complexity Index, ranks between Burkina Faso and Senegal. We are kidding ourselves if we believe we can benefit as a nation from the obligations we have contractually secured and the advancements we seek.
"We must throw all our weight behind the development of our manufacturing capability, not only for defence, but for Australia."