Is ‘new-collar work’ the answer for AU manufacturing?

Could ‘new-collar work’ be the answer for Australian manufacturing?

The ‘World’s Factory’ is on the ropes as manufacturing moves from China, Ryan Clarkson-Ledward, Editor, Money Morning, 14/08/20 (Link to Article)

Manufacturing as we know it is about the change drastically and ‘made in China’ will be on fewer goods in the coming years. Chinese manufacturing will not disappear overnight, they will still be a powerhouse producer however they will have far more competition as India, Southeast Asia and Americas build their own manufacturing ecosystems and Australia has a pandemic-induced resurgence of self-sufficient strategies.  This is the wake-up call that will force industry and policy alike to adapt to a new reality, one that relies far less on China.

In 2015, Australia was dead last in manufacturing self-sufficiency of the 36 OECD member nations – outing us as the nation that is most reliant on others to make the goods we want and need.  We use c.$565b of manufactured goods each year but only produce $380b worth.

This is an opportunity and with support and direction, Australian manufacturing could flourish again. A belief firmly held by Andrew Liveris — the ex-CEO of the Dow Chemical company — who has been onboard with a local manufacturing renaissance for some time now.

Enter the term ‘new-collar worker’ which, according to Wikipaedia refers to an individual who develops technical and softskills needed to work in the contemporary technology industry through non-traditional education paths. The term was introduced by IBM CEO Ginni Rometty in late 2016 and refers to “middle-skill” occupations in technology, such as cybersecurity analysts, application developers and cloud computing specialists.

Can 500,000 ‘new-collar’ jobs turn manufacturing around in Australia? Andy Park, Amy Donaldson and Laura Kewley, ABC News, 13/08/20 (Link to Article)

According to Andrew Liveris we can create half a million new-collar jobs with very high salaries in the digital-meets-manufacturing world. He did caution that a balance needs to be struck between self-reliance and open trading relationships but affirmed that Australia needs capability onshore to mitigate against the risk that we will not be able to get it from offshore.

Larry Marshall, chief executive of the CSIRO, said the ways that science will get us through the pandemic. Not only will it navigate us through this crisis, with the data and the [potential] vaccine, science has a way to create a new economic pillar to grow us out of the financial issues that we’re having to deal with post-COVID.

“Innovation in Australia went down consistently over 30 years of uninterrupted economic growth. So, it seems like we need a crisis to get us off our backsides, get us working together.” – Larry Marshall

The CSIRO’s roadmap highlights industries where jobs could be created including healthcare, food and agriculture, agribusiness, and of course the transition to zero emissions that can create whole new industries for Australia, which means we keep growing.

Will JobTrainer be enough to address Australian manufacturing’s skills shortage? Ryan Pollett, BDO Australia 23/07/20 (Link to Article)

Recently announced, is the $2 billion JobTrainer program – a two-part package aimed at ‘retraining and upskilling’ Australians in high-growth sectors, including manufacturing.

For manufacturers, whose biggest threat to business is shortage of labour, the JobTrainer package – while very welcomed – is a bandaid fix that will not be enough to keep all current apprentices and trainees in their jobs; or be enough to attract new ones, especially in this period of uncertainty.

The future success of Australian manufacturing must embed Industry 4.0 capabilities to survive. Yet, this also requires a shift from ‘blue collar’ to ‘new collar’ workers as the sector increases advancement in technology, with a digitally-driven modern manufacturing supply chain.

This will require investment in workers who undertake vocational education and apprenticeships and given the historical stigma associated with vocational education, more is needed to boost its relevance in today’s modern manufacturing world.

Manufacturers are looking at how they can continue in the next 8-9 months and are putting in place measures that consistently assess their cash flow, defer payments and negotiate contract terms.

Given this, they are less likely to take on new trainees, or worse still, let go of their current apprentices. If we reduce the number of new apprentices now, we aren’t going to see the effects of this for another four years, when those apprentices are finishing their courses – this coupled with the pace of change in the sector currently, the manufacturing sector will be left behind competitively.