Mark Goodsell works for the Australian Industry Group (Ai Group) as its Head for New South Wales (NSW) and its National Lead – Manufacturing. He’s also Executive Director of the Australian Advanced Manufacturing Council (AAMC). He spoke to William Poole.
AMT: Let’s start with the Ai Group and its activities, particularly with regard to manufacturing.
Mark Goodsell: The Ai Group is the national industry association for the industrial sector, not limited to but very much centred on manufacturing. It’s interesting that these days it’s hard to know where the boundaries between industries begin and end. Even conjuring up a concept of what manufacturing is can be difficult. You’ve got an increasing intersection with the ICT (information and communication technology) sector, manifesting itself in the digitisation revolution or Industry 4.0. Manufacturing has always had a strong overlap with the construction supply chain, and the trend to offsite pre-fabrication means that is an even stronger interaction now. Even in the food supply chain, it’s hard to know where a farm ends and food-processing starts. And increasingly manufacturers derive revenue from the services they supply off the back of manufacturing. So it may be hard to define what manufacturing is these days, except that at the moment in Australia, making things is a very solid source of revenue and employment for a lot of people.
Our primary reason for existing is to give that sector a voice in the political and community debates about policy settings and the role of manufacturing in the economy and the community as a generator of employment and wealth. We engage with community expectations about how we conduct business, how safe we are, how environmentally responsible we must be. So we’re the collective voice, and we do and say things that individual companies can’t do and say effectively or comfortably on their own. There are lots of other voices in the community who are noisy and who are legitimately listened to, and it’s important that industry has a voice that is legitimate and listened to as well, and that’s the main role we play, with the support of our members.
The process of representing industry gives us technical expertise in a number of key areas, which we provide back as services to our members. We develop streams of information, expertise and practical knowledge in issues like employment relations, safety, energy, standards or trade, which the members can benefit from as individual companies.
AMT: Tell us about your role.
MG: My formal role is Head of NSW, a key point of intersection with the NSW Government on issues that impact on our members. I also have a brief to oversee our manufacturing membership nationally, which is a significant majority of our membership, making sure we’re across the issues they’re facing and responding appropriately, in terms of what we say to government, media and the community, and in the help we give individual companies.
AMT: What does that help for individual companies actually entail?
MG: It’s a combination of information streams, networks, training and consultancy, but all grounded in strong industry experience with the advantage of being able to solve problems through a combination of connectedness and influence as well as technical capacity. A foundation area is workplace relations. We help companies manage their workplace relations including their wage-setting systems, whether through formal bargaining or otherwise, and we provide employment legal services to support that where a legal response helps. We do an increasing amount of strategic work with companies understanding the workplace relations and skills implications that technology and business model change may bring about. Safety is also a core service.
We run a group training scheme for apprenticeships and traineeships; we’re a registered training organisation (RTO) that provides broader training specialising in compliance requirements for industrial companies and development of front-line supervision. When you look at what’s going on in an organisation and look for points of intervention where you can really improve things, development of supervisors comes up frequently. It’s one of those foundation issues that a good company needs to get right. And we do a lot of work in training and development there.
Trade is another key area. We help companies who export with issues on trade, market access, certificates of origin and so on. We feed our experience in those services directly into discussions with government on the terms and efficacy of trade agreements.
More latterly, unfortunately, energy has become an issue that a lot of companies have to worry about. The magnitude of cost increases in energy means a lot more companies are having to quickly understand their energy bills and the energy market in which they are consumers. So we have been responding to that, both in the national policy debate on behalf of industrial users, but also helping our members understand how to be a smarter consumer in a rapidly changing industrial energy market.
The other area that’s emerging for us comes under the broad label of innovation and advanced manufacturing. What does it mean to be a modern manufacturer? What’s a sustainable model of manufacturing in a higher-cost country like Australia in a globalised world? Australia has been on a multi-decade transition from a protected mass-manufacturing model, where we tried to make pretty much everything here, to a more open model, which requires a very different mindset and different skills and capabilities. One element of that is exporting, how you engage in global markets, both in terms of understanding global supply chains, plus the more day-to-day stuff about physically moving goods around. The other element is having an innovation mindset; what that means; what that looks like – the extent to which you need to engage with external research agencies, say universities or CSIRO, to build knowledge your competitors don’t have; understanding the government support mechanisms you can access. All those things come under an innovation or transformation agenda, linked more latterly to Industry 4.0, the digitisation wave. It’s about helping companies understand its importance and role in the future of being a manufacturer in Australia, showcasing people who are doing it well, and helping people to start on that journey and help them access assistance and information.
AMT: You’re also Executive Director of the Australian Advanced Manufacturing Council (AAMC). Tell us what that involves.
MG: The AAMC has been around for about four years. It was independent until last year and then decided to be more closely integrated with Ai Group. The AAMC was founded by a group of manufacturing CEOs, partly driven by concerns that the debate about the future of manufacturing and industry in Australia was dominated by the then-looming closure of the car industry, and a poorly informed perception that Australia couldn’t make anything anymore. These companies could see the technology and economic trends being much more complex than that, and that there was and would continue to be a model of success for manufacturing in Australia, but it would require at least two things. It required some sensible policy focus, smart policy adjustments, particularly around global connections and encouraging innovation. And it required a mindset shift among enough of industry for manufacturing to continue to be a substantial part of the economy.
So the AAMC’s role was to remind government in particular, and also the community and industry, that there is such a thing called advanced manufacturing, it’s an evolution of traditional manufacturing, it can be successful in Australia, and there are examples of that success that everyone should know about and feel good about. And it’s been pretty successful; I’ve been to many events where Ministers and Premiers have talked about advanced manufacturing as enthusiastically as they’ve talked about education, tourism or mining as part of the future of Australian industry. I think five of the six states now have some form of advanced manufacturing policy framework. We have the Advanced Manufacturing Growth Centre (AMGC) and Innovative Manufacturing CRC (IMCRC) doing great connected work with industry. So it’s got really good traction in mainstreaming this notion that Australian manufacturing needs to, and is, morphing into an advanced manufacturing mode, and acknowledging and encouraging the mindset and policy settings that are contributing to that.
AMT: What do you regard as the greatest strengths for Australian manufacturing?
GM: We have a long history of manufacturing things here. We have a legacy and a culture of making stuff, originally driven by the tyranny of distance from the industrial base in the global north. We have a relatively highly educated workforce, though we should not take that for granted. We have quite sophisticated consumer markets that are good small testing grounds for products – we’re willing to try new things. We are politically stable, though in the recent decade or so we haven’t had terrific policy stability. Property rights are well acknowledged. Until recently we’ve had good supply of cheap and reliable energy. We’re a healthy community, and that shouldn’t be under-estimated. It’s in industry’s interests that our workforce is both physically and mentally healthy. We’re close to Asia, the part of the globe which is going to grow the most in the foreseeable future. So there’s a whole range of reasons why Australia has made things and with the appropriate adjustments can continue to derive value from the manufacturing value chain.
Some of the best opportunities continue to lie in adding value to our natural strength in both agriculture and mining. Because of our natural resource base, there are opportunities to add value through secondary processing of minerals and agricultural products, but also providing the capital equipment that drives those industries. Mining equipment and agricultural equipment are strengths because the supply chain they serve starts here.
So manufacturing should continue to be an important part of the Australian economy. It’s not going to employ 40% of the population as it may have done in the past. The important thing is that the engagement we do have is at the leading edge of trends in manufacturing, and we don’t get stuck in old modes of production and old technology and old economic structures and think that they won’t change. And it’s important we have an eye to the value we’re creating in terms of the wages we pay and the profits we generate. It’s not simply a matter of numbers of jobs, it’s about wealth and good career creation. It’s about both economic and community contribution.
It’s interesting that Australia still has over 900,000 people directly employed in manufacturing. If you take a different cut of the ABS statistics and add in the jobs that are now outsourced to other sectors but which traditionally may have been done by a manufacturing company itself, it’s probably up near 1.2m or so. Either way we are in the top four or five employing industries in the country. It dwarfs the number of people employed in mining, it’s double the number employed in finance, and most of the jobs are full-time jobs unlike some service sectors
So manufacturing shouldn’t overestimate its importance: a right-to-exist mentality is not helpful. It should be proud of its economic and community contribution, and should always have an eye to improving and developing as a legitimate part of a mixed economy. It should be proud and realistic about its role in that mix, and ensure that government and community recognises it. I think we’ve made some significant changes to the government’s view in recent years about that role.
AMT: And what are the biggest challenges it faces?
MG: There are two big challenges. The first is energy. There’s been a manifest failure over the last decade or so to have a clear-eyed, bipartisan, long-term policy on energy, including energy transformation in Australia to maintain as our energy advantage. That’s been a failure which we’re all trying very hard to address at the moment. It’s a foundation for the future.
The other challenge is centred around skills but I think it also includes community perceptions about the value and benefit of a career in manufacturing and its related activities. Because we’ve had this period of high-profile reductions in the car industry and the steel industry, there’s this lingering public perception, and sometimes a political perception, that we don’t make anything in Australia anymore and worse, we can’t do so competitively. And that feeds into a perception that pursuing a career in manufacturing or a related sector is somehow a short-sighted decision, when in fact the industry is crying out for new people. It’s sometimes expressed as we can’t find the skills but it’s often that we can’t find people, even unskilled or semi-skilled people. And I think part of it is this perception that there are better places to work.
That’s a challenge for the industry – that we realise that we’re in a war for talent. We need to have a very good view of ourselves and the value we provide, but a realistic view particularly about what young people want from employment and careers and skill development, and respond to those things rather than just hoping that they happen the same way they happened in the past, because they won’t. Some companies are doing well in that regard and some companies are struggling to make those adjustments, but it is a broader issue about the community perception about what a career in manufacturing looks like and where it can take you. We should be presenting our case with some confidence that there’s some really cool stuff being done in factories, workshops and R&D labs and good careers and marketable skills can be developed in the sector.
AMT: I suppose the challenge is that whereas a kid growing up in Germany would see manufacturing offering a definite career path, we still need to build that perception here.
GM: There’s an old joke about how in Germany being a lawyer is what you do if you’re not smart enough to be an engineer! Whereas in the Anglo countries, including Australia, there’s a perception that it’s the other way around. And the market for lawyers is particularly traumatic at the moment: I think fewer than half of the law graduates work in law. But often peoples’ decisions and families’ decisions about what a good career is can be up to half a generation behind reality.
But right at the moment, local manufacturing has put on tens of thousands of jobs over the last year or two, contrary to popular belief. There’s opportunities in different areas around the country. Our job and the industry’s job is to be realistic but proud of what we do and the wealth we generate and the things we make; not getting lulled into thinking that change isn’t upon us both in a technological sense and in a business model sense, but that change creates as much opportunity as it creates difficulty.
AMT: Tell us about your background how you ended up in this job.
GM: I come from five generations of manufacturers and engineering trades. I’m the first one not to have a “real” job! My family in the 1880s had the first mechanised brickworks in Sydney, so my roots are in manufacturing. I studied economics and law, but I’ve ended up in manufacturing through industrial relations, one of the core streams of Ai Group. I joined its predecessor MTIA three decades ago but I’ve had quite a few different jobs because I’ve always been intensely interested not just in industrial relations but in the economic and other forces that swirl around it, this broad palette of issues that influence the conduct and success of manufacturing in Australia. I’ve got the perfect job in that sense; I’m never happier than when I’m talking to a manufacturer about what they’re doing, the opportunities they’ve got, and the things that will help them. It’s an exciting time to be in manufacturing and I hope most manufacturers realise that.