Keeping the focus on Australian manufacturing after COVID-19

Andrew Liveris helped write the manufacturing policies of Barack Obama and Donald Trump, and now he’s doing the same for Scott Morrison. He’s among those hoping the reset after the coronavirus will herald a new era for Australian businesses.

Jul 01, 2020, updated Jul 01, 2020
Paul Gripske runs a family business that makes lawnmower blades, and says consumers are now asking for Australian-made products. (Photo: ABC)

Paul Gripske runs a family business that makes lawnmower blades, and says consumers are now asking for Australian-made products. (Photo: ABC)

Before COVID-19, Paul Gripske’s family business was suffering.

A wholesaler of spare parts for lawnmowers and other outdoor power tools, its manufacturing arm makes more than 3.5 million mower blades each year.

But the recent drought hit hard.

“We’re a grass-driven business. [If the] grass doesn’t grow, people certainly don’t mow dirt,”  Gripske tells ABC RN’s The Money.

Then, two things happened: It rained in February, and the Government allowed Roy Gripske & Sons to continue operating throughout the pandemic shutdown.

“With people staying home and working around their gardens they’ve been buying product,” Gripske says. “We’ve been running record months.”

Gripske believes the virus has shifted customer focus and created the right environment for Australian manufacturing to thrive.

He and his team, based in Queensland, are looking to develop an Australian-made lawnmower by the summer of 2021.

“The consumer, for the first time in years, has been asking, ‘Is this made in Australia? Can I get an Australian-made product?’” he says.

Gripske is one of many who hope the country’s recent challenges will herald a new era for manufacturing in Australia.

Australia’s simple economy

In the 1960s, manufacturing equated to 30 per cent of the Australian economy. Six decades on, it’s 5.5 per cent.

Andrew Liveris, special advisor to the National COVID-19 Commission, is one of those who believe the reset after the coronavirus might offer a springboard for Australian manufacturers.

A former chair and CEO of the Dow Chemical Company, Liveris helped write manufacturing policy for US presidents Barack Obama and Donald Trump — and is now doing the same for Prime Minister Scott Morrison.

He says the pandemic brought Australia’s need for domestic manufacturing to the front of people’s minds.

“All the PPE items that maybe were not available, everyone suddenly got very attentive to having them [made domestically],” he says.

“That really acutely brought into focus the notion of manufacturing and manufacturing capabilities.”

He points to global rankings of economic complexity, which rate how diverse and complex a nation’s exports are. Australia is the world’s 87th most complex county according to Harvard Growth Labs’ Economic Complexity Index.

“For a country that is a first world country to have such a low economic complexity economy, it needs to be remedied,” Liveris says.

He says governments need to ensure their citizens have access to basics such as healthcare, energy, defence, technology, food and water.

“These are key national imperatives that need to be addressed through having capability onshore,” Liveris says.

“This is not picking winners and losers, this is sectorial focus, and brought into acute focus by the pandemic and the crisis.

“I think this means that we need to have a narrative that says, ‘Look, I’m going to get very good at certain areas; I’m going to be a world-beater in certain areas.’”

He says Australia does excellent research but has not been successful in commercialising that research because of our small population.

“The internet has changed all that … we are connected to the world through technology these days, and that means we can have new opportunities to scale, in areas we could not scale before.”

‘New-collar’ and what we can learn from the US

Gripske says support from the Government would make the production of new products — like his company’s lawnmower — much more viable.

“If we were just given the same support in manufacturing that the United States manufacturers get … we could do it easy,” he says.

Liveris agrees that we should learn from the US approach to manufacturing, which balances top-down control with bottom-up innovation.

“We are a capitalist country, we are a free-market-driven country … we want researchers and entrepreneurs to come out of that,” he says.

“But some of these areas have long cycles of investment, and to get long-cycle investment I need to have some planning and policies in place.”

Diversifying the workforce and focusing on technology, according to Liveris, could also help Australia to unlock manufacturing potential in otherwise untapped areas of the economy.

He says it’s a model that’s worked in the US, where he’s an IBM board member.

“We’ve morphed into this place called ‘new-collar’. It’s not white- or blue-collar, it’s new-collar,” he says.

“New-collar workers are very technology-proficient with the human-machine interface.”

He says this is not just about computer skills but “actually how to interpret data, how to understand trends and how to accelerate technology through [adding value] to basic materials”.

He says Australia is well placed to add value to its natural resources by producing the technologies and goods that are needed in the 21st century.

“Lightweight materials, advanced sensors, 3D printing — materials that the world needs as it tries to lighten its impact on the planet.”

Calls for changes to industrial relations, tax

Gripske argues that changes also need to be made to the way in which people are employed in Australia.

“Factories, to run the most efficiently, need to run seven days a week, 24 hours a day. That’s what the best factories in the world do,” he says.

He says his workers are paid above the award, but he would like to run a night shift without having to pay penalty rates.

“Instantaneously that makes us so much more competitive.”

Liveris says another challenge facing Australian manufacturing is too much red tape.

“We have too many layers of government trying to do the same thing over and over. If you try to get something approved, you have to go through another set of approvals,” he says.

“We’ve got to figure a way to actually harmonise the investment community’s attempts to invest in certain sectors.”

Gripske agrees, saying there needs to be a review of Australia’s tax system, with genuine rewards for companies that invest in research and development.

He would also like to see a system that rewards companies based on results.

“If we successfully bring this product to market, then we should get a bonus for doing it,” he says.

According to Liveris, the time is now for Australian manufacturing and we need to take advantage of the opportunities presented by the pandemic.

“If if there is a time ever to lay out a future vision for our country, I think that time is imminent.”

– ABC / Edwina Stott and Richard Aedy for The Money

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