Australian manufacturing challenges and opportunities from the rise of China
In: http://hdl.handle.net/1885/14469
The current Australian manufacturing industry is in relative decline and companies are now facing dynamic changes in the domestic market. Specifically, they are now facing the rise of China, with its rapid industrial rise and growing manufacturing sector. No longer are companies using local supply chains and competing with local suppliers. Now in the globalising world, companies are forced to use global supply chains to compete with companies all around the world. China has rapidly risen to be one of the most powerful global manufacturing nations. Combining large markets, increasingly skilled labour and with low wages, it has challenged established leaders of the supply of manufactured goods. Australian companies are responding to China's industrial growth, by increasingly offshoring. However, companies are now establishing operations in China, to maximise the benefits available. These are: Low cost labour Increasingly large pools of highly skilled labour Movement into higher value activities Servicing China's massive domestic market However, there are risks and concerns when establishing operations in China, they range from the ageing population to IP counterfeiting. Two case studies are analysed: Bluescope Steel Ampcontrol (Electronics manufacturer and Service provider) BlueScope Steel and Ampcontrol were asked how to respond effectively and efficiently to the impact of China and current changes in the Australian domestic manufacturing sector, and both companies stressed that Innovation and R&D is crucial to develop new products and be able to participate in the higher value manufacturing market where most Chinese companies cannot compete. Ampcontrol also stated that skilled labour is essential. A supply of skilled labour is crucial for companies to innovate, hence the skill shortages must be addressed. BlueScope Steel also stated that Government regulations can be inefficient and tariffs need to be reviewed to ensure that Australian companies can continue to be competitive. Bluescope Steel and Ampcontrol stated that the manufacturing industry and the Australian Government need to address the above issues to ensure that Australian companies are operating in a favourable and highly efficient environment so they an retain and enhance their competitive edge in the global market. The Australian Government and the manufacturing industry need to ensure: • There is a culture of Innovation and R&D, which is highly efficient and effective in exploiting all the creative capital available in Australia to produce new high-value products. • Address the skill shortages and ensure younger students are inclined to join the industry and undertake higher education training to ensure Australian companies have a highly educated labour pool. Simplify Governmental regulations and reduce tariff barriers while creating policies that encourage innovation and R&D and the training of a highly educated workforce.