News Summary 1

Title of Article: Manufacturing not all bad news

URL: http://www.skynews.com.au/businessnews/article.aspx?id=965674    

           The Australian manufacturing sector has seen a steady job loss but this job loss is not all bad news. According to the article, this decrease in employment is due to a transition from heavy industrial manufacturing to hi-tech, and higher valued, goods. Australia has shown to be globally competitive in this type of manufacturing. Sue Beitz, general manager of the Australian Workforce and Productivity Agency (AWPA), commented on the transition to hi-tech saying “we do see that there are fabulous opportunities in the areas of pharmaceutical, biotechnology, food and beverage, either in moving to the higher end of production or entering new markets.” The economic concept of adaptability or “spontaneous change” fits with this transition because Australia sees opportunities in places where they aren’t at and want to fill those gaps. Australia’s manufacturing sector has an opportunity to grow and ultimately make more jobs in this transition. They are adapting to the new market structure. The growing markets in hi-tech is due to the rapid advancements in technology and the growth in demand for new and better technologies. Policies that promote businesses to make this transition and make it easier will benefit the employer and employee. Incentives are an example of this promotion.

            An issue pointed out in the article is that much of the current manufacturing workforce is not skilled, by that I mean have no post-school qualifications. With much of the workforce not qualified, this limits the productivity and profit for the manufacturers. Mrs. Beitz said “the issue is really about how we continue to adapt our manufacturing industry from the capital intensive to knowledge intensive offering… and the challenge of getting clever people out of laboratories and into businesses.” To continue to adapt, more clever people in the businesses would help solve that problem, but to get them to the businesses, one thing that businesses could do is provide incentives and communicate to them that going into business is a viable option for them. One could also approach with a more broad approach. This broad approach involves improving the education system to 1) educating the students more effectively and 2) finding these students who are the “clever people” that businesses are looking for and nurturing them. A problem with the education system could be that these clever people are never found and never are able to reach their full potential. This broad approach tackles that problem.
           The biggest issue is the unemployment increase. The article states that the Australian manufacturing jobs have “declined 10.2 percent over the past decade… and that they were forecast to continue to decline 1.0 to 1.5 percent per annum out to 2025.” Unemployment is a tough problem to face in manufacturing because some jobs are being automated with robots and other technologies. This means that some recovery of the unemployment is not possible but to solve this issue, companies need to start up and move to this market because of the rich opportunities with relatively low risk. I say relatively low risk because these industries are growing fast and there are lots of opportunities to succeed. Policies that make it easier and safer for businesses to start up in the hi-tech manufacturing will increase employment in Australia’s manufacturing sector.