Gold Coast Convention and Exhibition Centre
Broadbeach, Queensland
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First up, let me congratulate Alistair Murray on his induction into the Victorian Manufacturing Hall of Fame in Melbourne last night.
His name has been inscribed in the honour roll for individuals who have made an outstanding and sustained contribution to manufacturing excellence. There are only fourteen names on that roll, so he is in pretty elite company.
The same commitment to excellence is on display at this conference, and it’s great to see people taking time out from a very busy week on the marine industry calendar to be here.
Many of the participants here will also be displaying their products at the Sanctuary Cove International Boat Show, which kicks off the Australian boat show season this week.
Some have also been nominated for the Australian Marine Awards and Australian Superyacht Awards.
Together, these events – conference, boat show and award ceremonies – provide a good demonstration of how the innovation process should work.
Here at the conference we are debating ideas and transferring knowledge.
At the boat show, companies will be developing – and getting feedback from – their markets. Listening to customers is integral to the innovation process.
Finally, the awards ceremonies focus our attention on excellence. If we want to hold our own internationally, we need high-achievers. And when we find such people, we need to nurture them, recognise them, and reward them.
The budget
This week is a big one for the marine industry, and last week was a big one for the government.
Our first budget is about building a strong economy through responsible economic management.
It is about fighting the war on inflation while honouring our commitments and delivering for working families.
It is about providing for Australia’s long-term defence and security needs.
It’s about reversing eleven years of neglect on education, health, infrastructure, climate change and water. And it’s about preparing Australia for the future by thinking and investing long-term.
In the weeks before the budget, inflation hit a sixteen-year high and the Australian dollar hit its highest level against the greenback since the 1980s. There was every chance interest rates would continue to rise. Australian families were hurting and Australian industry was hurting. The war on inflation had to be our number one priority.
In my portfolio, Commercial Ready was a casualty of that war. This was a big program and letting it go was a very, very tough decision.
Having said that, I’m a glass-half-full rather than a glass-half-empty man, and I think it’s important to focus on the positive.
We have to balance the savings measures in my portfolio – which totalled about $1.2 billion – against the new initiatives – which total $1.1 billion. As far as our bottom line is concerned, it’s close to status quo.
The new initiatives are:
- $251 million over five years for Enterprise Connect
- $240 million over four years for Clean Business Australia, comprising the Green Building Fund, Retooling for Climate Change, and Climate Ready
- $42 million over four years to improve small business advisory services at thirty-six Business Enterprise Centres
- a Small Business Advisory Committee to monitor regulatory proposals that may affect small business
- $326 million over four years for 1,000 Future Fellowships, which will get and keep the world’s top mid-career researchers working in Australia
- $209 million over four years to double the number of postgraduate scholarships
- and $37 million over five years to establish the Excellence in Research for Australia quality assurance system to ensure that our publicly funded research is up to world standard.
If those last three research-related initiatives seem remote from the day-to-day concerns of Australian industry, they shouldn’t. They are essential to boosting our innovation effort, and boosting our innovation effort is essential to making Australian industry more productive and competitive.
NIS Review
We understand the importance of manufacturing to Australia, its centrality to the innovation system, and the acute pressures it is now facing. That’s why we have established the new portfolio of Innovation, Industry, Science and Research.
Our task is to address more than a decade of neglect in innovation and industry policy. At a time when every business must innovate to stay competitive, these are one and the same thing.
Our Review of the National Innovation System is critical to this endeavour. It will set the policy agenda for the next decade and lay the basis for our budget bids for the next two years and beyond – if the electorate continues to support us.
Our aim is to increase the concentration, connectivity, capacity and creativity of Australia’s innovation system. This review will show us how.
The review panel has conducted public consultations which attracted over 1,000 participants, it has received over 630 written submissions, it will be holding specialist workshops this month to explore specific issues, and it is receiving input from a bevy of international experts.
The review chairman, Dr Terry Cutler, and his colleagues will present a Green Paper to the government by the 31st of July, and the government will respond with a policy White Paper by the end of the year.
Marine industry innovation
The Australian marine industry already has a proud tradition of innovation. We lead the world in the use of lightweight materials for high-speed vessels, in computer-aided design and manufacture, and in the development of cutting-edge technologies.
In this connection I think we should pause to remember the contribution of John Button, who died last month. Button’s shipbuilding industry reforms of 1984 and 1989 transformed an industry that depended on protection into an industry that thrived on exports.
Button didn’t just exhort shipbuilders to export and leave it at that.
He made them to take a hard look at their financial, commercial and technological capabilities. He required them to invest in their workforce and workforce skills. And he developed programs to help them with R&D, innovation and marketing.
That was the way forward in the 1980s, and it is still the way forward today.
So, what are we doing about it?
Enterprise Connect
To begin with there is Enterprise Connect, which will give small and medium-sized businesses better access to new ideas, know-how and technologies.
Enterprise Connect will create a network of manufacturing centres in each state, along with five dedicated innovation centres for mining technology, clean energy, creative industries, remote enterprise and innovative regions.
And it will provide $10 million to place public sector researchers in businesses with ideas that would benefit from expert input.
Creating a network with rich and persistent connections will also give firms the chance to learn useful lessons from innovative companies in sectors other than their own.
For example, what can the marine industry learn from the automotive industry? Rod Keane will be giving us his take on that question shortly.
Today, it is only people smart enough to attend the Marine Innovation Conference who will benefit from hearing what Rod Keane has to say.
Once Enterprise Connect is in full swing – and we expect all the pieces of the network to be in place by year’s end – this kind of cross-sectoral knowledge transfer will be available to anyone who chooses to use the service.
If you want to learn more about Enterprise Connect, hunt out the AusIndustry representatives here today.
And don’t miss this afternoon’s presentation by Jim Walker, who has agreed to chair Enterprise Connect’s Manufacturing Centres Interim Advisory Board – and who always has something worthwhile to say.
Industry innovation councils
In a related initiative, we will establish a series of Industry Innovation Councils to promote dialogue and develop strategy. These will take over where the old industry action agendas left off. They will broaden and deepen our engagement with industry and serve as a forum for ongoing discussion about future directions.
We are talking to stakeholders now about the coverage and composition of these councils.
I have asked my department to make sure it talks to the leaders of this industry in particular, recognising that it is a model of innovation and international competitiveness, and a leader in lightweight materials and advanced manufacturing. We want you on board.
Education revolution
The new initiatives in my portfolio will touch all the bases John Button’s shipbuilding industry plans touched – extending business capabilities, facilitating innovation, and augmenting skills.
But they’re a long way from being the whole story. We are also investing in infrastructure to ease capacity constraints and accelerating regulatory reform to reduce the burden of compliance.
And that education revolution you’ve been hearing about isn’t just a slogan.
The budget includes a net $5.9 billion in additional new spending on education across the spectrum – and that’s just what was announced for Julia Gillard’s portfolio last Tuesday.
If you total up all the new commitments in education across the government since the election, the figure is more like $17.6 billion.
Our aim is to dramatically expand educational opportunities. No one in corporate Australia needs to be told why.
A recent survey by global business consultant Grant Thornton International found that the shortage of skilled workers was the biggest single barrier to business expansion in Australia.
Meanwhile, research undertaken by the previous government last year showed that 44 per cent of Australian businesses were having trouble recruiting the people they need. A survey published last month by the Australian Industry Group found that 68 per cent of businesses were being hurt by skills shortages.
What we have in this country is a skills crisis, and the government has made fixing it a national priority. That doesn’t just mean plugging the skill gaps we have today – it means building the skills we will need tomorrow.
The challenge
Australia can claim some stunning achievements in innovation, science, and research. It has many firms and industries – like this one – that are deeply committed to innovation.
Yet our performance overall is uneven.
As far as business spending on R&D goes, we manage only two-thirds of the OECD average, and a half or less of what the world leaders achieve. As far as innovation goes, two Australian firms in three don’t do it (2004 and 2005).
As far as PhDs in the workforce go, we are well behind the Europeans and Americans. As far as collaboration between researchers and industry goes, we are the OECD’s wooden-spooners.
Forgive me for being a Jeremiah about this, but I think that’s more responsible than being a Pollyanna.
The challenges facing Australian industry are acute. Global markets are increasingly dominated by huge, low-cost producers like Brazil, Russia, India and China. China and India in particular are investing heavily in innovation and moving rapidly up the value chain.
The challenges facing Australian society are acute. Our population is ageing; our health is at the crossroads; homelessness won’t go away; and Indigenous disadvantage is a national disgrace.
The challenges facing the Australian environment are acute. Ours is already the driest on earth and climate change is making it drier. At the same time, it is exposing our coastline – where most Australians live, and which the marine industry calls home – to more extreme and destructive weather events.
Do I think these challenges are grave and pressing? Yes, I do. Do I think they are insurmountable? No, I don’t.
We can answer them if we are prepared to embrace new ideas, new technologies, and new ways of doing things. We can answer them if we are prepared to innovate.
I’m happy to play the prophet of doom if that’s what it takes to get people’s attention, but I am also a product of that social democratic tradition which credits all men and women with goodness, intelligence and the ability to build a future that is better than the past.
I guess that makes me a Jeremiah with an optimistic streak.
The future
And whenever I attend an event like this, I can’t help thinking that optimism is totally justified.
The marine sector has to contend with the same tough conditions as every other Australian industry, but it is responding to those conditions in what I think is the very best way – by getting smarter and more creative.
The Low Carbon Marina Initiative to be launched later today by the Marina Industry Association of Australia is just one example.
This conference itself is another. There is plenty of food for thought in the first three sessions – on innovative technologies, product design and environmental solutions – but I’m especially intrigued by the final session on innovation strategies.
Here is an industry thinking not just about how it can improve products and services, but how it can improve the innovation process itself.
That puts you a long way ahead of the curve. It is evidence of how sophisticated this industry is today, and a clear sign that it is heading for an even brighter future.