Australian Manufacturing Has To Be Better Than Good To Have A Sustainable Future

The last four weeks have seen an unprecedented interest in Australian manufacturing, but perhaps for the wrong reasons. The federal government introduced its Solar SunShot program in late March, to boost Australian industry participation in the renewables transition. And a week later Anthony Albanese announced the Future Made in Australia plan, to create a stronger base for Australian manufacturing.

Future Made

The idea has been met with some very strong criticism. A lot of economists do not like the idea of government support for manufacturing because China can do it cheaper, while the proponents of Future Made in Australia point to sovereign capability, onshoring the value-add end of our resources industries and the need for some domestic control of our future energy system.

I lean towards the government’s approach because the global uptake of technology is accelerating and the nations that control innovation can carve a path for themselves that will be available to other nations. Australia – with its high levels of science and engineering graduates, its powerful resources industry and its already strong base of advanced manufacturing – has the potential to be at the forefront of the global technology boom, but it will need an innovative manufacturing sector to take full advantage.

Harrison SPARC

I have a vested interest in this argument. Our R&D business – Strategic Projects and Advanced Research Centre (Harrison SPARC) – received $1.9 million from the federal government’s Critical Minerals Development Program to 2023 to support of our enhanced lithium-extraction technology.

SPARC grew out of a successful manufacturing business that employs 150 people and makes industrial lubricants such as grease. As COVID took hold in 2021 and a number of global supply chains looked very fragile, we realised there would be a new global economy on the other side of the lockdowns and the restrictions, and Australian manufacturing could be a part of that emerging system if we invested in innovation. We started SPARC to pursue innovation across six focus-areas, including water, energy, agriculture, construction, health and sustainability.

We thought we could do this because manufacturing employs so many clever and inventive people, but they are often not included in the R&D end of the industry. To better capture this untapped wealth of knowledge we instituted an ‘ideas hopper’ where team members across all Harrison group companies submit their ideas for evaluation and if those ideas result in commercial technology, the team member shares in the IP royalty. The further enhance the acceptance of the hopper, an app was built for it so that team members can now lodge their ideas directly from their phones, wherever inspiration may occur.

One of the first ideas to be taken-up by SPARC was the process by which we could help lithium refiners extract greater yields of lithium from spodumene ore. Our new lithium frothers are being tested in Western Australia and when this technology operates at scale it could mean an extra $400 million earned in the national economy.

New Innovations

We have other projects vying for internal funding at the Harrison Group. We are increasing our R&D spend from 1.2% of expenditure to 5% over a five-year cycle and we have research relationships with UNSW and Curtin University.

The most important advantage enjoyed by Australian manufacturing is a superior workforce, but you do not leverage their innovative selves by ignoring their ideas. So we have invested in people as much as we have invested in technology or IP.

For the manufacturing detractors, I give you this insight: Harrison SPARC will be revenue-positive in its fourth year – 2025 – which it will do by commercialising proprietary IP via licensing agreements to the manufacturing sector.

There are no guarantees in manufacturing. However, there are some outcomes that are more certain than not: if we do not make it here, we will have to import it; if we do not have a manufacturing sector, then our great inventions – such as WIFI, PERC solar cells and the heart pacemaker – will always be imported back to the land of their creation; and, if we do not value-add our amazing resources industry we will forgo hundreds of millions of dollars of potential export earnings. 

The New World

I do not think all Australian manufacturers have to invest in R&D to the extent that we do at Harrison. But I do think that the government is on the right track in recognising that manufacturing – and all the R&D and innovation that coalesces around it – gives this country many more options as the global technology equation develops. And it will not just be in self-sufficiency that manufacturing will add value: it also allows us to be part of the advanced-technology, high-value strategic supply chains as envisaged by US Secretary of Treasury, Janet Yellen. Yellen foreshadows an Indo-Pacific supply chain partnership of advanced manufacturers in an arrangement she calls ‘friendshoring’, and it is hard to see where Australia fits into this arrangement if we do not make high-quality, cutting edge stuff.

In other words, the manufacturing that is relevant for this region will be the high-end, high-value industry where smart people matter more than just a lot of machines. Australia will want to be a part of this new world and the government is right to prepare manufacturing for that future.