Australia is at a pivotal moment. What we do now will shape our place in a world economy built on technological solutions. Senator Tim Ayres, Australia’s Minister for Industry and Innovation, and Minister for Science shares his vision for the nation’s future success.
When Tim Ayres reflects on the urgency of building Australia’s future industrial capability, he tells a cautionary tale. He remembers the decline of the automotive sector in Australia, and the moment when factories closed and global manufacturers withdrew.
“What I’d observed in the years before the closure in and around the auto sector was that, though it was highly capital intensive – with lots of robotics and automation, and Australian research and design – there were enormous spillover benefits into the rest of Australian manufacturing,” the federal Minister for Industry and Innovation, and Minister for Science told create.
When the industry moved offshore, those benefits vanished. “Imagine how much less behind we would be in EV development, hybrid car development, the battery sector and the supply chain if there was still the tens of billions of dollars’ worth of development going on.”
For Ayres, the collapse of automotive is more than economic history – it is a warning. Without deliberate effort, capability can be lost, leaving the nation dependent on others. The challenge now is to ensure we rebuild capabilities and take advantage of the current rapid technological advances.
Though the pace of change is rapid, it’s nothing new. And with change comes opportunity.
“I’ve seen wave after wave of technological innovation and change make its way through the manufacturing and engineering sectors,” Ayres said. “Waves of automation, robotics, laser technology – our sector has been transformed over the last 30 years, and this is the next wave of technology.”
He is blunt about the stakes. “We can either grasp it and be confident about the role Australia can play – confident in Australian science, in Australian research and development, in Australian engineering – or we can fall behind.”
Australia, he argues, starts from a position of strength. “We are rebuilding confidence in Australia, Australians and Australian engineering to be able to meet these challenges.” The question is whether those strengths will be converted into lasting prosperity or allowed to dissipate as opportunities slip away.
Setting the direction
The Future Made in Australia (FMA) strategy is central to Australia’s push to do the former.
“Future Made in Australia is designed to reshape and change the composition of the economy,” Ayres said. “It means we’re moving from mining and exporting raw materials to processing materials and moving up the value chain in new technologies. It’s the largest ever Australian pro-manufacturing package, and that’s what it’s designed to do. It’s very ambitious.”
FMA identifies industries that can anchor this shift. “The policy’s priority sectors include green metals, renewable hydrogen and critical minerals – industries that demand both engineering breakthroughs and large-scale investment.”
Alongside FMA is the National Reconstruction Fund (NRF). “We’re great at coming up with ideas, but with commercialisation, we’re very poor,” Ayres admitted. “The NRF aims to change this,” he said, pointing to the fund’s investment in PolyActiva, which is developing innovative drug delivery implants to combat glaucoma, as an example of the NRF’s positive impact.
“It’s the kind of thing that otherwise might have gone offshore,” he said. “That IP, that research and development here in Australia, is what that fund is about – to deliver investments and co-investments that secure local manufacturing capability.”
Digital infrastructure
Ayres insists digital capability must be understood as a system. “It’s not just about data centres. It’s about digital connectivity, and it reaches right through to our critical minerals and our capacity in Australia to be supplying the base materials that are required for chips and for the broader compute sector.”
He stresses that energy, resources and digital must work together. “I am absolutely focused on seizing the advantage. In digital infrastructure terms, Australia has an energy advantage and a proximity to big emerging markets that are big adopters of the technology themselves.
“We are a Five Eyes secure country with deep relationships with major markets and secure governance. There are a lot of reasons why Australia is a very good place for digital infrastructure development and investment.”
And integration is the key. “We’re very focused on getting the pathways right, sending the right investment signal.”
Green metals and mining
Few sectors illustrate the stakes more than steel and aluminium. Ayres is emphatic about the opportunity.
“To secure the future of our iron ore sector and Australia’s place in an uncertain world – and to lower the emissions profile of the steel sector – Australia has to play its part. And that means iron production in Australia.”
The stakes are both environmental and economic. “The steel sector is an outsized contributor to global emissions, but it’s fundamental to the economy. So getting this right is a really significant contribution that Australia can make.
“I don’t want Australia to just be a quarry exporting ore to the world to be processed somewhere else. I want Australia to be extracting the maximum value. This is the moment, if we grab it.”
Hydrogen and low-carbon fuels are another focus.
“Future Made in Australia is about renewable hydrogen and low-carbon fuels as well as critical minerals. These are areas where Australia has a natural advantage and where we can lead globally.”
For Ayres, engineers will play a decisive role in scaling up. “It is going to take the application of engineering skills in order to build the infrastructure, build the systems and make sure that these industries can grow at the pace required.”
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Engineers at the centre
Ayres is unequivocal about the role of the profession. “None of this can be achieved without engineers as experts and practitioners, and also engineering leadership.”
And he emphasises partnership. “Government must play its part, but the majority of this progress is going to be made in our private sector with government support, and that means everybody needs to step up. There’s a responsibility on the government to provide the leadership, but there’s also a responsibility on our manufacturing and engineering firms, our university sector.
“There is a world to win, and we’re only going to win if we work together.”
Ayres ends with a note of urgency, but also confidence. “Putting our shoulder behind the wheel and being confident in each other that we can make the progress” is how he describes the challenge.
For him, Australia must not repeat the mistakes of automotive manufacturing. Instead, it must seize the opportunities in AI, green metals, hydrogen and advanced manufacturing – and ensure that engineers are at the centre.
“There’s no progress in society without engineers,” he said. The question now is whether the profession will seize this moment and not be bystanders to a wave of change, but leaders shaping a future made in Australia.
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Economic complexity and national resilience
Australia’s recent fall to 105 of 145 countries for economic complexity – sitting between Botswana and Côte D’Ivoire – is a sobering reminder of the stakes. Falling complexity, Ayres argued, is “directly linked to declining research and development intensity and declining productivity”.
Leadership in technological integration is not an abstract pursuit, but a pathway to economic sovereignty, he said.
“We can be an economy that goes up the value chain in minerals production, that adopts new technologies to make sure we’re big in medical technology, in advanced manufacturing, that we’re driving manufacturing opportunities in the renewable economy and the energy economy.”
This story was originally published in the November 2025 edition of create with the headline “Innovation nation”.
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