Australia’s manufacturing sector needs the support of the country’s younger, globalised generation if it is to continue its growth trajectory, according to new research.
A St George Bank survey of more than 1,000 consumers revealed that ‘Australian made’ is not as important to 18-to-24-year-olds (23%) when purchasing a product, compared with 69% of 55-to-74-year-olds, even though the younger generation are invested in purchasing from sustainable businesses. The youth age group are also not willing to pay more for Australian products (45%), and 36% don’t believe they are better quality than overseas counterparts.
Matthew Kelly, Head of Manufacturing and Wholesale at St George, said even though the manufacturing sector in Australia has seen almost two years of sustained growth, the challenge businesses face is competing with low-cost imports, particularly when it comes to the younger generation.
“The sector is far from fading,” said Kelly. “Automation, artificial intelligence and pure inventiveness are enabling new business models and processes that are transforming an industry which already contributes $100bn to Australia’s GDP.
“However, it’s clear from the research that the industry needs to do more to create a compelling value proposition for the next generation, aligned to what matters most to them when purchasing products. This could be through the reduction of carbon emissions, investing in innovative manufacturing techniques to reduce costs, and future sustainable materials.”
St George’s Future of Manufacturing Report has identified greater collaboration and partnerships are needed to drive the sector forward and support a new wave of advanced manufacturers who are future-proofing the industry. According to the report, to succeed in the face of disruption, advanced manufacturers need connections to research & development (R&D), skilled workers, and access to financial support.
“Advanced manufacturing has the ability to be more competitive and offer better value to consumers, importantly those who are less loyal to Australian made products,” said Kelly. “These businesses aren’t necessarily new tech companies, they are well-established organisations reinventing themselves and willing to invest in new ways of doing things.”
The report concluded there is significant room for Australian manufacturers to increase adoption of advanced characteristics through greater collaboration on R&D, generating different revenue streams with new product and service offerings and increased technology investment.
Kelly added: “We understand one of the significant barriers to manufacturers investing is cashflow shortfalls. St George has a unique understanding of the sector and specialised expertise and products to help businesses grow and succeed, including an invoice discounting solution that helps manufacturers access capital tied up with aged debtors, and equipment finance to support business growth. Transformation can be confronting, but as an industry I believe we all have a role to play in nurturing businesses that will fuel the sector and St George is committed to helping manufacturers create new models for growth.”