Think HBR

Reinventing the Hunter’s manufacturing and service firms

Bede Boyle
Manufacturship Group
Australia is the lucky country richly endowed with Agricultural and Mineral Resources. We fell off the sheep’s back into a hole in the ground in the resources boom. With the dramatic down turn in coal and iron ore prices we need to climb out of the hole in the ground and engage with Asia and develop globally competitive manufacturing and service firms.
With its foundation built in supporting the Newcastle Steelworks the Hunter has a strong engineering and manufacturing. This capability further developed from the mid-1990s with the growth of Australia’s coal industry. With University of Newcastle and TAFE we have graduates and skilled trades to support innovative firms in development of Advanced Manufacturing to forge the Hunter’s place in the Asia Century.
Latest ABS data illustrates an 8% reduction from 1990 to 2014 in the share of Gross Value Added contributed by Australian Manufacturing. Reflecting the growth of Gross Value Added by mining, construction, financial and other business services. Australia’s manufacturing industry operates in an increasingly competitive global market as evidenced by the announced withdrawal of GM, Ford and Toyota from vehicle manufacture in Australia.
Australian manufacturers will need to reinvent themselves by leveraging innovation and advanced manufacturing through new servicification business models to engage with Asia.
The sustained economic development in Asia presents many opportunities beyond the resources sector on which Australia has become dependent.
We are experiencing a fundamental and historic shift in the world’s economic activity from West to East:
• in 1990 China and India together accounted for less than a tenth of the world GDP, and by
• 2010 almost a fifth of the world GDP, and by
• 2020 China and India are projected to account for more than a quarter of world’s GDP, and in
• 2025 Asia as a whole is projected to account for half of the world’s GDP.
Australia is placed in the right place at the right time. Australia’s proximity to Asia presents manufacturers and service firms with a massive opportunity for strategic growth by leveraging Asia-centric value chains into one of the most dynamic regions in the world underpinned by the economic development China and India.
Australia’s closest trading partners are members of the Association of South East Asia Nations [ASEAN] Economic Community of 10 Asian nations including Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Lao PDR, Myanmar, Cambodia, and Vietnam.
China overtook the United States in 2014 as the world’s largest economic power when measured in real purchasing-power terms. China is already Australia's largest export market for both goods and services, accounting for nearly a third of total exports, and a growing source of foreign investment.
India is the world's largest democracy and is a market of 1.2 billion people. Its youthful population, diversified economy and middle class growth trajectory present significant opportunities for Australian manufacturers and service firms.
ASEAN is expected by ANZ to replace China during the next 10 years as the world’s manufacturing hub and ANZ expects it to become the fifth largest economy in the world by the end of thedecade. A summit of the ASEAN group of countries in April 2015, hosted by Malaysia, brought the 10 Asian nations one step closer to realising plans to launch the ASEAN Economic Community (AEC) by the start of 2016.
The Manufacturship Foresight Study identified six sectors where Australian manufacturers have strong capabilities thatcan be leveraged through innovation,advanced manufacturing and Servicification to rapidly improve profitability and return on investment into the Asian century.
Sector 1 - Mining Equipment,Technology and Services (METS)
Sector 2 - Defence Industry
Sector 3 - Advanced Manufacturing
Sector 4 - Oil, Gas and Energy Technologies
Sector 5 - Agriculture and Food Technologies
Sector 6 - Medical Technologies and Pharmaceuticals
The Manufacturship Foresight Study is available free of charge by contacting
There are lessons from firms who have effectively engaged with Asia to rapidly improve profit and return on investment:
The Foundation of effectively engaging with Asia is to acquire an in depth understanding of:
1. Export barriers to entry including non-tariff barriers
2. Financing exports: pricing, payment methods, custom tariffs, etc.
3. Intellectual property, legal factors, licenses and concessions
4. Accessing export assistance programs, funding grants and awards
The four steps to effectively engage with Asia are:
1. Conduct export market research and rigorous competitor analysis
2. Develop your unique value proposition in an Asia context
3. Develop business acumen and export marketing skills
4. Finally, establish your channels to Asian markets
For further information contact: Bede Boyle on 0419 213 010, email or visit
Bede Boyle Bede Boyle
Is Chairman of Manufacturship Group founded by Jason Furness with the vision to be part of a massive reinvention of manufacturing globally by assisting CEOs to rapidly lift their profits and ROI by forging alignment of operations, innovation and marketing to achieve global competitiveness.