A sustained high Australian dollar, the small size of the Australian domestic market, low carbon production and global debt woes are leaving the manufacturing sector – which is reliant on commodity prices – exposed.

Taskforce tactics

Positive news is the formation last November of a manufacturing taskforce to help create opportunities for the struggling sector that employs nearly one million and generates more than 34 percent of national merchandise export income. Comprising government, business and union representatives, the taskforce’s final report is due to be released in mid-2012, when the taskforce will disband. This report will confirm how the government will assist the sector, and determine whether to adopt policy similar to that in place in the UK and the US – where small to medium-sized manufacturers bid for federal government contracts through Small Business Innovation Research (SBIR) Schemes.

The US SBIR Scheme drives innovation in science and technology through grants and tax incentives for organisations with 500 or less employees.

Across the pond, UK businesses can apply for public sector contracts with the Small Business Research Initiative to create innovative technology products and services. Government departments hold competitions to find solutions to issues. Examples include addressing methods of lowering the weight soldiers have to carry and creating new energy-efficient technologies.

Back here, the Australian government will help the sector win contracts in a new global landscape, create higher-value products and champion R&D in tandem with universities and TAFES. The taskforce will also support manufacturers by investing in clean energy and carving out competitive terms of foreign trade through mechanisms such as tariff exemptions. And perhaps most notably, it will address how our manufacturing sector can tap lucrative opportunities by marketing to Asia’s one billion – and growing – middle class.

Chaired by Prime Minister Julia Gillard, the taskforce board includes such heavyweights as Treasurer Wayne Swan, CSIRO CEO Megan Clark, Australian Industry Group CEO Heather Ridout, Kraft Australia CEO Rebecca Dee-Bradbury, Holden Chairman and MD Mike Devereux, OneSteel CEO Geoff Plummer and Boeing Australia President Ian Thomas.

Australian manufacturing: what’s it worth?

Manufacturing provides 8.6 percent of GDP and 8.3 percent of employment (about 950,000 jobs), according to 2011 figures from the Department of Education, Employment and Workplace Relations.

Enterprise Connect

Another government-backed organisation providing business advice for small and medium sized manufacturers is Enterprise Connect, which has helped more than 5,000 businesses through no-charge consulting services. On offer is business skills training, workshops, networking opportunities, mentoring and updates on how to innovatively apply new technologies, expertise and best practice to amp up business performance and sustainability.

• Read more about the Prime Minister’s Taskforce on Manufacturing.
• Find out about Enterprise Connect.
• Learn more about the UK SBRI.
• Read up on the US SBIR scheme.