NSW Industry Action Plan - Manufacturing

Transcription

1 Sydney Aerospace Defence Interest Group (SADIG) Submission NSW Industry Action Plan - Manufacturing November 2011

2 What are the opportunities that the NSW manufacturing industry can exploit over the next decade? Regional Development Australia, Sydney (RDA) has helped facilitate the formation, with the key industry Sydney stakeholders, the Sydney Aerospace Defence Interest Group (SADIG). This submission has been made by RDA Sydney on behalf of the SADIG Industry stakeholders to cover specific issues relating to the Aerospace Defence industry, and shares t in the most part the generic views expressed by RDA Sydney in their submission on manufacturing. SADIG industry stakeholders believe there is scope and potential for the current Aerospace Defence industry sectors to grow and take advantage of the new opportunities presented by a rapidly evolving globalised economy. Following three Aerospace Defence Roundtable events within facilitated by RDA Sydney, it was felt by those present, that there was a need to improve the connectivity between companies and their business opportunities, by improving the collaboration between business, government and various leading industry stakeholder groups operating in the greater Sydney region- in a similar way to HunterNet in the Hunter region, and the Shoalhaven Defence Industry group in the Shoalhaven region of NSW. The NSW Defence Capability Study prepared in 2009 by the Australian Business Defence Industry Unit, identified that Greater Sydney had over 209 (62%) of the 335 NSW Defence capability companies in NSW, compared in the Hunter (59) and Illawarra (30). (See attached in the Addendum selected information from the study pertaining to Greater Sydney). Whilst the Hunter and Shoalhaven have well organised support network resources, the greater Sydney network has not had in place, up until now, a coordinating and collaborative network group such as SADIG. This industry led cluster group is progressing well in its formation, but will need additional specialist support to allow it to meet is full potential. SADIG members see an opportunity that by working more collaboratively together they can further develop and strengthen the existing and successful Aerospace & Defence industry manufacturing & service key sectors, where there is competitive advantage, by improving productivity, business capability, sustainability, innovation and networks. Opportunities will exist not only in OEM manufacturing, and technology but also in the sustainment of key aerospace and defence assets as part of a global supply chain with major aerospace defence prime contractors- particularly in the design, engineering and ongoing maintenance services. 2 P a g e

3 During the next decade new opportunities will emerge in: Major global aerospace /defence contracts such as LHD, JSF, LAND 400 projects Australian Government purchases. If life-cost analyses (rather than just upfront capital costs) are included when purchasing services and products, it could create opportunities for the utilisation of a whole new range of technologies and support services. New industries with high value-add and new emerging technologies (advanced manufacturing, electronics, security, biotech and biomedical industries) Smart system processes, smart chipped technology, nanotechnology OEM Equipment manufacturing &support services Transport and infrastructure related products manufacturing New sustainability and green construction building materials Aerospace and Defence industries- global supply chain opportunities Industries that add services to products creating tailored solutions for customers. What can we do differently to encourage the NSW manufacturing industry to grow? GLOBAL CONNECTIVITY: Many SME s working in the Aerospace & defence industry need to learn to work in the global supply chains with major international prime contractors before they will win major contracts back into Australia. Support mechanisms and assistance in working with prime contractors, and gaining access to these global supply chains is needed. MAJOR DEFENCE CONTRACTS: Many major defence contracts have exceptionally long lead times before they come to fruition. Assistance needed to help companies identify alternative sustainment opportunities and cross industry capability strategies to provide improved cash-flow for the long term. COLLABORATION: Like Queensland, Victoria and South Australia, encourage and redevelop a more collaborative aerospace defence industry development approach to government in NSW, with industry development and supportive infrastructure strategies. More collaboration is needed between government, industry, research and education institutions. We thank the DMO and the NSW Defence Unit for their support in forming SADIG but look forward to gaining access to additional resources to help coordinate the network group in the future to bring about major additional industry development for NSW. GOVERNMENT PURCHASES: There is a need to apply a whole of life cost analysis criteria to all government purchases, not just upfront capital costs. IMAGE: There is a need to improve the media and economists views of manufacturing recognising that manufacturing has evolved as a sector and now has a major services component which is inherent in many economic industry sectors, and with one of the highest economic quotation multiplier effects. There is a need to recognise the whole of life nature of manufacturing, the different steps involved from design to pre-engineering, manufacturing, sustaining and ultimately to disposal and recycling. 3 P a g e

4 INDUSTRY CLUSTERS: There is a need to invest in the identification and development of industry clusters such as SADIG. Industry clusters are essential for business networking, partnership building, cross-collaboration and knowledge sharing about key areas such as best practice and innovation. INFRASTRUCTURE to support manufacturing: Within the Metropolitan Strategy 2036 and with Infrastructure Australia and Infrastructure NSW, redevelop and implement a new positive and predictable employment lands and transport, infrastructure and freight strategies: More certainty in planning, industry development and deliverability of matching infrastructure More competitively priced available employment land. SKILLS: reform the education system to make training more flexible and appropriate to workers and better tailored to the needs of specific industries. Training needs to be better aligned with industry in terms of curriculum and delivery methods. There is a need to build the capacity of companies to more effectively skill their workforce. Employers need to gain an understanding of the needs for multi-skilling, re-skilling, and up-skilling, and green skilling of their existing workforce, so that industries are able to anticipate and respond to new business opportunities. Employers should be encouraged to develop Skills Development Plans as well as succession plans. More highly skilled workers are needed to work in manufacturing. There is a need to analyse skills demand in this area. The training needs of the emerging technology sectors cannot be overlooked. There is a need to address skills shortages. A whole of government approach to skills development is needed. Competition for skills with the resources sector is a major issue and one affecting the willingness of manufacturers to train and up-skill their workforce. There is a need to develop cross-industry skills for manufacturing and mining so that the manufacturing sector provides training to the mining sector and workers are able to transfer skills across the two sectors. Training in literacy, numeracy and problem solving skills are needed. Funding for Workplace English and Language Literacy needs to increase. 4 P a g e

5 What actions or roles are you prepared to undertake to assist in positioning the NSW manufacturing industry for future growth? Sydney Aerospace Defence Interest Group (SADIG) Sydney s Aerospace and Defence Interest Group is made up of key industry members including Australian Industry Defence Network (AIDN), Australian Business Defence Industry Unit, Australian Industry Group Defence Council, Australian Aerospace Industry Forum, Sydney Metro Airports Limited supported by Bankstown and Hawkesbury Councils, Enterprise Connect, DMO, the NSW Government Defence Unit, and RDA Sydney. It is made of an advisory Executive Committee and three special Interest Groups, with a secretariat supported currently by the RDA Sydney Executive Officer and Marketing & Communications Manager. OUR VISION: To provide a focus and a forum for Sydney s Aerospace and Defence Industry sectors and to facilitate their growth; to work closely with Government agencies and industry associations to attract a higher percentage of Defence and Aerospace Business into the Greater Sydney Region. OUR PURPOSE: To provide feedback to industry members and other stakeholders, including the State and Commonwealth Governments, on the make-up and health of the Aerospace and Defence Industry sectors; to identify key factors and trends affecting it; to help facilitate industry access to available Government support and services; and to identify strategic opportunities which can only be tackled on a collaborative basis. OUR POSITION: We help our members to help themselves by facilitating, encouraging and supporting collective efforts and initiatives designed to benefit the industry as a whole. The Executive Committee The role of the Executive Committee is to identify Aerospace and Defence companies located in Sydney, the capabilities and strengths of the aerospace and defence sectors in Sydney, and the areas which require focused attention. The Interest Groups The roles of the individual groups are to identify specific needs and develop plans for the future development and growth of Sydney s aerospace and defence sectors. 5 P a g e

6 Group one: Industry supply chain capabilities Knowledge is the focus: - Who are the companies making up the Aerospace and Defence sectors in the Sydney area? - What are their capabilities and how can they work together? - What are the emerging opportunities for these sectors? - What needs to be done to help position the industry to capitalise on these opportunities? Group two: Industry Skills Development Aerospace and Defence are skill and technology dependent industries. For the long-term good of these industries active involvement with young people is essential: exciting and educating them about career opportunities. - What are the current and emerging skills challenges? - What are the current and emerging demographic challenges? - What education and training resources and opportunities are available to help tackle these challenges? - What s needed that isn t currently available? - How can the Aerospace and defence industries engage with schools, TAFEs and Universities? - What can Sydney s defence and aerospace companies do together to build Industry skills and tackle these challenges? Group three: Innovation Innovation is the life-blood of the Aerospace and Defence industries. In a global market Sydney companies must innovate to survive and prosper - Who are the Innovators in Sydney s defence and Aerospace industries? - How can innovative companies break into the market? - How can Sydney-based innovators create networks and support each other? - How can companies work with and benefit from innovation networks in academia and the research community? - How can Governments help and encourage Sydney-based innovators? - What kind of Strategic Plan is needed? Activities SADIG is developing a collaborative website to market the industry capability, to develop a more cohesive connected networking group capable of working together and winning more business for Sydney and NSW. It will not attempt to replicate or duplicate the activities of its key stakeholder groups. 6 P a g e

7 It provides an opportunity to develop a regional geographic specialist group for Sydney, with more synergy, able to represent the industry to multinational primes, and be a conduit to government with respect the health of the sector, supply chain capabilities, future skills development, and opportunities for innovation support. It will key run forums, workshops, networking events; improve the communication between industry and government and research and education industry stakeholders. It will on-sell the initiatives, activities and events of the DMO and NSW government, and of its key stakeholder groups. What is stopping NSW manufacturers taking up these opportunities? - Aerospace & Defence NSW Government and & Sydney Industry Capability Issues Need for a clear well defined industry supported NSW Government Aerospace Defence Industry strategy More interaction between NSW regional and NSW state focus More strategic development of unique capabilities within Sydney and the state as a whole Lack of co-ordination of unique capabilities in being able to provide a total solution offering Lack of understanding within industry in Sydney as to each other s business Lack of identifiable capability for teaming & collaboration Lack of identifiable capacity and industry collaboration, with major projects going interstate Lack of coordination and support for small business with latent capability in participating in the industry Major NSW state and federal government purchasing decisions are not applying long-term lifecycle cost analysis principles e.g. NSW trains. This means the lower purchase upfront cost are the higher maintenance long-term costs will be. High Australian dollar Excessive regulation red tape OH&S, wages costs and relative inflexibility with new Fair Work Australia industrial system No strong collaborative culture between government/industry/research institutions in NSW. Lack of global industry supply chain market intelligence Poor interaction and mutual understanding between industry and research/training with respect to needs, capability and capacity of industry and the respective current research and education institutions Insufficient expertise and insufficient successful venture capital commercialisation outcomes industry experience. Lack of industry experience within some sectors of Department of Trade and Industry bureaucracy Lack of awareness and education on innovation. Some companies need help to see innovation as a tool to transform the way they do business and respond to the problems or opportunities presented by an increasingly globalised knowledge intensive marketplace. 7 P a g e

8 Skills shortages, deficiencies in the number of maths, science and engineering graduates. In Aerospace & Defence many companies are having to go global in order to win a position in major defence or mining contracts back in Australia How can innovation and productivity be improved in the NSW manufacturing industry? Innovation and productivity need to be restored as the key KPI in the Industrial Relations process: Seek adoption and adaption as well as integration of innovation in all aspects of management and business processes as well as within all facets of the workplace Seek innovation skills development training, both for management and staff in this adoption of this process across all sectors for the business. Seek flexibility in workplace and adoption of new emerging technology Innovation should be an integral part of the curricula at secondary and tertiary level (engineering, science, commerce and management studies). In the most recent Science and Technology and Innovation score board from the OECD (2009) Australia is ranked fourth last in the OECD for the proportion of firms collaborating with higher education institutions and last in the OECD for proportion of Australian firms collaborating for innovation with government research institutions. We need to encourage a new collaborative industry development approach: Clusters Individual industry working groups with strong alliance & connectivity with research & education institutions Supporting developing centres of excellence with coordinated plans and infrastructure Development of global industry supply chain market intelligence. Targeted Skills development initiatives such as support for the Re- Engineering Australia Foundation F1-in- Schools Technology challenge to encourage more students to take in Maths, Science and Engineering subjects We need a better collection of data about industry capability within and between industry sectors and more communication between industry and research centres/universities, to raise awareness as to what expertise exists, where and how to access it, how to apply it and who can assist. More investment in R&D is needed. According to AIG, Australian business R&D expenditure is 1.34 per cent. It remains below the OECD average of 1.63 per cent GDP and only 6 per cent of university research is funded by industry. More effective collaboration is needed between industry, government and research centres. According to AIG, there is low level of active collaboration in Australia at present and those business research collaborations that are being pursued are on the whole, falling short of meeting commercial business 8 P a g e

9 expectations. Better communication and interaction between universities and industry and between industries. The most recent OECD Science, Technology and Innovation Scoreboard shows that Australia ranks third last in the OECD for inter firm collaboration for innovation and last in the OECD for the proportion of firms with foreign cooperation in innovation. A key response to the above is the formation of the SADIG, and the work it will be able to do with the support of government. How can your industry or governments (whether State, Commonwealth or local) act to enhance the competitiveness of NSW manufacturing business? SADIG: As previously outlined, SADIG will seek to work and develop the industry capabilities and competitiveness of the industry for Sydney through its own endeavours and activities. As the Greater Sydney region represents over 60% of the NSW Aerospace Defence space and defence industry there is much to be done with a huge opportunity for growth. Whilst RDA Sydney is providing the initial stimulus, the website and secretariat support to the group, it is going to very quickly need additional specialist industry and secretariat support with funding assistance from government similar to that provided to HunterNet. 9 P a g e

10 Addendum: Figure 1: NSW Defence Industry Sector Primary Business Activities Source: 2009 NSW Capability Study by Australian Business Limited Defence Unit Figure 2: NSW Defence Industry Sector Business Unit Locations by Region (number of business units per region is shown) Source: 2009 NSW Capability Study by Australian Business Limited Defence Unit 10 P a g e

11 Greater Sydney (includes Western Sydney) The Greater Sydney regions had combined revenue of $6.6 billion of which $932 million was derived from defence activity amongst the 209 companies located in this region. The main activities undertaken in the region are Design (33%), MRO (31%), Project Management (30%), In Service Support (26%) and Manufacturing (25%). Table 3: Greater Sydney Categories CATEGORY NUMBER OF COMPANIES AEROSPACE 76 MARITIME 95 LAND 78 ELECTRONIC SYSTEMS 49 HELICOPTER SYSTEMS 37 INTELLIGENCE SYSTEMS 17 NAVY TRAINING 33 ARMY TRAINING 25 AIR FORCE TRAINING 22 JOINT TRAINING 13 CIVILIAN TRAINING 21 SIMULATION 21 APPLICATIONS 19 NETWORKS 18 ARCHITECTURE P a g e

12 COMMUNICATIONS 28 WEAPONS & MUNITIONS 18 GARRISON SUPPORT 7 COMPREHENSIVE MAINTENANCE 21 PERSONNEL SERVICES 6 ENVIRONMENTAL & HERITAGE 13 STRATEGIC INFRASTRUCTURE 12 STRATEGIC PLANNING & ESTATES 12 INFRASTRUCTURE ASSET DEVELOPMENT 18 HEALTH SERVICES 7 HUMAN RESOURCES 3 FINANCE 4 LEGAL 0 NAVY LOGISTICS 31 ARMY LOGISTICS 21 AIR FORCE LOGISTICS 20 JOINT LOGISTICS 19 Source: 2009 NSW Capability Study by Australian Business Limited Defence Unit 12 P a g e