**This story originally appeared in the July 2026 edition of AMT Magazine**
In opening the recent and successful Australian Manufacturing Week, I was pleased to deliver an address about the changing ‘face’ and future of manufacturing. Technology and innovation are transforming manufacturing as we have known it. I took the opportunity to share my views on how Australia can embrace the future.
I began with the truth as I see it about Australian manufacturing. Manufacturing will not die. It’s too important. But it will transform. Indeed, it is transforming.
We are a nation of builders. We’ve built railways across deserts. We’ve built cities on coastlines. We’ve built industries that fed the world, powered the region, and shaped our national identity. And now we are called upon to build again — not just infrastructure or products, but a new future for Australian manufacturing.
A future that is smarter. A future that is cleaner. A future that is globally competitive. A future that is unmistakably ours. It will be built on flexibility, not scale. Because right now, manufacturing is not just changing — it is transforming at a scale the world hasn’t seen since the Industrial Revolution.
Australia has a choice: We can helplessly watch this transformation happen… or we can lead it.
With 104,000 businesses contributing over what the Australian Industry Group says is $137 billion of value-added output and employs 930,000 Australians, we are still a powerhouse!
I still often hear the lament on the demise of the car industry in Australia, but I rarely hear people talking about our incredible transformation to 99% SMEs. This is why our future will be built on technology uptake and flexibility, not scale. Our business models are changing to high-value, low volume. It is the most adaptable that will survive and thrive, not the strongest, not the fastest; not the smartest. The most adaptable will succeed. And that means understanding the conditions at play and how we can adapt to them.
There is no doubt that the manufacturing industry is by GDP percentage terms is contracting. While weak economic conditions in Australia have proven difficult for most industries, manufacturing has declined faster and further than any of its peers.
Drawing on this data from the Australian Industry Group’s annual Manufacturing Performance and Outlook report (2025), given the contribution of manufacturing to the Australian economy, this should and is a cause for concern to many.
The economic impacts of the manufacturing recession go much further than the industry itself. The outsized contribution to exports, investment, R&D and innovation mean that a weak manufacturing industry will drag on our national aspirations to be a high-tech and high-productivity economy.
The report identifies four factors – energy costs, skills shortages, trade risks and productivity difficulties – which have combined to drive manufacturing into transformation.
- Australia is at a Turning Point
For decades, we’ve heard the same narrative: that manufacturing in Australia is shrinking, that we can’t compete, that the world has moved on.
But the data tells a different story. Besides the hundreds of millions it contributes to the economy and the near million jobs, manufacturing remains the sixth largest industry in Australia, generating 12.4% of Australia’s exports and 7.9% of our capex investment in 2024, and more than 5% of our country’s GDP. It is our most R&D intensive industry (reinvesting 4.1% of value-added back into R&D), and our most innovative industry when it comes to new product development. And it is the second‑largest investor in R&D in the country
And here’s the most important part: We are now entering a moment when technology is rewriting the rules of global competition.
Based on data regarding Australian business structures, small and medium enterprises (SMEs)—defined as businesses with fewer than 200 employees—indicate that SMEs constitute roughly 99% of manufacturing firms in certain states.
Overall, the Australian SME sector is considered the “backbone” of the economy, comprising over 98% of all businesses across all sectors.
This is Australia’s opportunity — not to rebuild the manufacturing of the past, but to create the manufacturing of the future, with flexibility.
- Embracing Robotics and Automation is Australia’s New Industrial Muscle
Across the world, automation is accelerating. The International Federation of Robotics reports a 9% increase in operational industrial robots in 2024.
Australia is catching up fast, although not fast enough.
From advanced robotics in Western Sydney’s aerospace precinct, to automated mining operations in the Pilbara, to robotic food processing in regional Victoria — automation is becoming our new industrial muscle.
And globally, the vision‑guided robotics market is projected to grow from $3.2 billion in 2025 to over $7 billion by 2030.
This isn’t about replacing workers. It’s about supercharging them. It’s about giving Australian workers the tools to compete with anyone, anywhere.
- No vision of the future would be complete without addressing the role of artificial intelligence.
AI is not just a technology. It is becoming the imagination engine of modern manufacturing. Long language models and visual language models are at the heart of the possibilities. If your business is not thinking about the impacts and the possibilities of AI now, you will be left behind. It’s already ingratiated itself into our everyday. Like it or not, we need to address it.
ANCA, a legendary Australian company, and a leader in CNC grinding machines. They have very deliberately integrated AI to advance their role in precision manufacturing.
They are using it in Predictive Maintenance & Quality, where AI is used to monitor machine performance, reducing downtime and ensuring high-precision tool production.
- ANCA’s Integrated Manufacturing System, called AIMS, uses AI and automation to connect, automate, and optimize the entire production process, improving efficiency and reducing reliance on manual labor. [1]
- And Behind their Cutting technology, ANCA utilises AI to optimise grinding processes, ensuring superior surface finish and accuracy.
These are the kinds of gains that change industries.
And the International Data Corporation (IDC) FutureScape in its report ‘Worldwide Manufacturing 2026 Predictions’ predicts that by the end of this year, 90% of the world’s largest manufacturers will augment operational roles with automation, boosting worker efficiency by 30%.
Imagine what that means for Australia, if we can get greater productivity, higher quality, lower waste and greater global competitiveness. AI is not replacing Australian workers; it is amplifying them.
- Smart Factories are Australia’s Next Competitive Advantage
Smart factories are emerging across the country — in Melbourne’s advanced manufacturing hubs, in Brisbane’s biomedical precincts, in Adelaide’s defence and space clusters.
Deloitte’s 2025 Smart Manufacturing Survey shows that companies embracing these systems are becoming more agile, more resilient, and more competitive.
A smart factory can: Predict equipment failures; reduce energy use; minimise waste; enable mass customisation and connect supply chains end‑to‑end.
This is manufacturing that thinks.
- The Global Race — and Australia’s Moment
Around the world, nations are racing to lead the next industrial era. Digital maturity is becoming a measure of national strength. This will mean embracing data centres, rethinking energy needs, and planning for a digital future.
KPMG reports that 34% of manufacturers globally are already seeing ROI from multiple AI use cases, more than any other sector.
We need to be the nation that builds the things the world can’t build without us and build our independence; that is to retain and create the sovereignty to manufacture if supply chain is disrupted. That means diversifying our trade relationships and deliberately building our own capability — in defence, in clean energy, in medical technology, in advanced materials, in space.
- None of this is possible without people and the Australian workforce needs to rise to the challenge
Technology doesn’t transform industries alone; People do. The future of Australian manufacturing is not about humans competing with machines. It is about humans leading machines.
The manufacturing industry is doing it tough in skills and talent attraction, but the tide is turning. And we’re already seeing it in response to AI. Trades are becoming seen as safer jobs. Critical thinkers will be in high demand. Engineers will continue to rise in importance as they work with and lead AI.
Olivier Scalabre’s (Senior Associate Director at the Boston Consulting Group) Ted Talk on the Fourth Manufacturing Revolution was delivered a decade ago in 2016.
He said global economic growth has been slowing for 50 years, and without change, we may soon face a world with no growth — a scenario that leads to social tension and declining living standards. Historically, major surges in economic growth have always followed major manufacturing revolutions: the steam engine, mass production, and early automation. Each revolution boosted productivity, which is the core driver of economic growth.
Scalabre argued then that we were on the verge of another manufacturing revolution, one capable of reigniting global growth and reshaping globalization. Attempts to revive manufacturing — offshoring to cheaper labour markets and building larger, specialised factories — delivered only temporary gains and ultimately created rigid, inefficient supply chains. Meanwhile, digital innovations like the internet transformed services but did little to improve industrial productivity, which continues to decline.
The new revolution he said would emerge from the convergence of advanced technologies with manufacturing. These include advanced robotics; robots that collaborate with humans and perform complex tasks. He predicted that Automation in factories would rise to 25% by 2026 to be 20% more productive.
And he predicted that Additive Manufacturing (3D Printing) that was already transforming plastics and now metals, would represent 25% of global manufacturing.
He said these shifts will have major macroeconomic consequences and these are in fact at the heart of the transformation we are seeing. A decade on and you can judge if Scalabre was right in his predictions, but he was definitely on the right track.
More recently Lauren Dunford, argues that manufacturing is the most overlooked but most important force shaping our future. Dunford is the CEO and co-founder of Guidewheel, an AI-powered FactoryOps platform, who delivered a TED2025 talk titled “The future isn’t just coded — it’s built“. She highlights that manufacturing is a critical, yet overlooked, engine of innovation necessary for solving major challenges like climate change and scaling AI.
She says manufacturing represents one‑sixth of the global economy. Yet most people barely think about it, even though nearly everything humans use is manufactured.
She says manufacturing has an image problem at a time when a survey shows that 57% of Gen Z wants to be social‑media influencers, not manufacturers. This, Dunford says, is a huge problem — because manufacturing is where the biggest opportunities of our generation actually lie.
So Why does Manufacturing Matter Now?
COVID exposed how fragile global supply chains are. When factories shut down, the world ran out of essentials Her message: If we can’t make things, we break.
Even AI depends on manufacturing. Data centres — the physical backbone of AI — require massive amounts of steel, cement, servers, cooling systems, and electricity. None of it exists without manufacturing.
Dunford says we need to support a new generation of manufacturing heroes.
Where the future sits, modern manufacturing jobs should be and are no longer are dirty or dangerous — they are clean, high‑tech, and cutting‑edge. But millions of roles may go unfilled by 2030 because young people don’t yet see manufacturing as a desirable career.
Dunford quotes Edison: “Opportunity is missed by most people because it’s dressed in overalls and looks like work.”
Australian Manufacturing Week was our big and wonderful celebration of people and companies who make things.
The next manufacturing revolution offers a chance for sustainable, widely shared economic growth — but only if countries act deliberately, retrain their workforce, and embrace the transformation. We need to stop blaming governments for a lack of handouts and actually work with state and federal governments, as partners, to create the future that we want.
If done right, it promises more wealth, more productivity, and a better future for the next generation.