Industry 4.0 strategy needed for Australian manufacturing

Australia’s manufacturing workers are crying out for specialised training to upskill, recognising their jobs are under threat, according to a new report developed by PwC Australia, Swinburne University of Technology, Siemens and the Australian Manufacturing Workers’ Union (AMWU).

The report also shows Australia’s manufacturing industry is facing an image crisis, with two-thirds of workers who responded to a survey for the research indicating they would not recommend the manufacturing industry as a career path for young people, in line with perceptions of the industry in the United States and Britain.

The report calls for the Commonwealth Government to facilitate the development and release of a manufacturing Industry 4.0 strategy and provides recommendations on ways in which manufacturing businesses must adapt and evolve.

“The consequences of the Fourth Industrial Revolution are profound,” said Jeff Connolly, Chairman and CEO of Siemens in Australia Pacific region. “Industry 4.0 is expected to add $21 trillion to global GDP by 2030 and there will be a significant net increase in jobs created. However, Australia needs to act quickly to capture its share of the potential and avoid being left behind.

“The transformation is about new globally shared standards, innovative application of research, new business models and rethinking the role of education for job-ready outcomes. Importantly, it’s also about ensuring a cyber-secure environment. Provided there is a complementary set of actions put in place by government, researchers, education, industry and organised labour, there is little to be feared and much to be gained.”

Manufacturing workers responding to the report survey agree traditional job roles are changing and that specialised training is needed to upskill employees. Nevertheless, more than a third indicate they do not have a strong understanding of the Fourth Industrial Revolution known as ‘Industry 4.0’, which encompasses end-to-end digitisation and data integration of the value chain.

“There’s an urgent need for investment in cross-sector collaboration to respond to employee needs for development of essential skills required by the Industry 4.0 economy,” said Professor Aleksandar Subic, Deputy Vice-Chancellor (Research & Development) at Swinburne University of Technology. “It must link the manufacturing industry with the education sector to facilitate collaboration and seamless learner pathways across the entire continuum of education and training, from VET across higher education and research. This will help bridge the skills gap that continues to grow between the fast-paced and rapidly digitising manufacturing industry and the workforce that underpins it.”

“The research really underlines the fact that the reskilling and upskilling agenda in Australia is becoming more important and demands an urgent response,” said Sara Caplan, PwC National Skills Lead. “Businesses need to be thinking about how they will tackle this with their workforce. Education and training providers also need to rise to this challenge by working with industry to deliver training that fills the gaps Industry 4.0 is creating.”

“There’s so much potential for Australian manufacturing, but we’re at a critical juncture for the sector’s success into the future,” added Andrew Dettmer, National President at the Australian Manufacturing Workers’ Union. “This report provides a great road map for all stakeholders to work together to ensure Australian manufacturing workers are getting the right support to reskill or upskill to meet the challenges and take advantage of the opportunities in the 4.0 environment.”

The report presents seven recommendations to improve policies, programs and initiatives targeted at futureproofing Australia’s manufacturing industry:

1. Commonwealth Government to facilitate the development and release of a manufacturing Industry 4.0 strategy.
2. Develop a new online portal that provides consolidated and easy-to-access information on government incentives and programs for manufacturing businesses.
3. Establish hubs for Industry 4.0 commercial manufacturing activity focused on priority industry sectors.
4. Continue to remove barriers between Vocational Education and Training (VET) and Higher Education in Australia’s tertiary education system to facilitate collaboration opportunities and seamless learner pathways.
5. Establish a workforce transformation leadership program.
6. Create funding and accreditation models to support lifelong learning, reskilling and upskilling throughout the work life cycle.
7. Enhance the integration of manufacturing business supply chains through strategic procurement.

Chris Matthews, PwC’s Victoria Education and Skills Leader, said, “Australia’s manufacturing sector employs 933,900 people and makes a significant contribution to our economy. Our report recommendations highlight that we need a combination of business, government and education and training providers working together to make sure the manufacturing sector in Australia gets the skills it needs to thrive into the future.”