Election campaigns are a time when nations pause to consider their futures, considering the priorities and policy directions that will shape their coming years.
For engineers in Australia, the two years dominated by the COVID-19 pandemic have highlighted the significance of sovereign capability to the country’s future. Whichever party takes government after next month’s vote, this issue is one Engineers Australia has identified as a priority.
As the COVID-19 pandemic has shown, Australia needs to revisit its understanding of sovereign capability, expanding its purview beyond the realm of defence and seeing it through a broader economic and social lens.
Promise and unrealised potential
Engineers Australia Chief Engineer Jane MacMaster FIEAust CPEng told create that while some of the current government’s progress on sovereign capability has shown promise, other aspects — particularly in renewable energy — have been disappointing.
“I think we would’ve liked to have seen a more widespread support for engineering skills across the board,” she said.
“To build sovereign capability that we can sustain, we need to think it through. We need to take the long-term approach and build that pipeline of capability, otherwise it’s not going to be sustained.”
That requires thinking through the full pipeline. One example MacMaster gave relates to gender equality: rather than encouraging girls and women to simply be involved in manufacturing, future governments should be looking to increase gender equality in all areas of STEM.
“We can’t just snap our fingers and make it happen. We’ve actually got to design some initiatives that will work to encourage women to choose maths and science and engineering or a technology qualification, and then become interested in manufacturing,” she said.
“It’s not something that we can wave a magic wand at a particular point in a supply chain and hope that will happen, it takes a rigorous thought-through well-designed approach to build a sovereign capability in anything that can be sustained.”
Engineers Australia sees opportunity in batteries and solar panels as a future export industry, supporting tax incentives for Australia-owned and operated manufacturers.
“There’s a lot more innovation to do in the battery side of things,” MacMaster said.
“Are we devoting enough time, attention and money to that? Importantly, there are the ecosystems around that — the tax incentives and other regulatory constraints … we need to be competitive in a global market for us to thrive domestically as well.”
Another proposal made by Engineers Australia would see efforts to streamline and centralise government grants for research and development, the creation of additional innovation hubs, and the implementation of a globally competitive tax regime for investing in start-ups.
“To be competitive and to build sovereign capability, we need to build future exports; the domestic market’s not going to be big enough if we want to remain competitive,” MacMaster said.
“The other one is obviously infrastructure. There’s a priority put on that by governments at all levels.”
Investing in infrastructure
Engineers Australia has highlighted the potential in addressing Australia’s infrastructure deficit by requiring transnational corporations who receive government contracts to partner with smaller domestic firms.
“I think it’s the big transport mega-projects that we find in infrastructure,” MacMaster said.
“But it absolutely also goes to energy and electricity infrastructure: how we integrate renewables into the grid, our capacity. Can we keep up with the planned installation rate? How are we going to get all our solar panels? Where are the batteries coming from? Where’s the innovation we know we need?”
For MacMaster, even a focus on manufacturing requires more careful consideration.
“It’s all very well to say manufacturing, but manufacturing in what? What does that actually mean?,” she said.
“Is it manufacturing across the board? Is it defence manufacturing? Is it renewable energy manufacturing? Is it technology and IT components? What actually is it? Then we need to ask, well, what skills do we need to do that and what technology do we need to do that?”
She believes the country would benefit from someone within government willing to take ownership of the question of sovereign capability.
“Where we struggle is who can act … who can actually make a difference, and that’s where the process falls down,” she said.
“What we’re missing is someone to really own this, to really see that it’s a real problem, and to take ownership and really champion this with the decision-makers.”
Review Engineers Australia’s guide to the 2022 Australian federal election here.
My reading of sovereign capability is not necessarily about designing and manufacturing a few niche products for export. If anything Covid-19 border closures demonstrated the country’s weakness in supply chains to the extent that basic protection gear for health professionals, like PPE and masks, had to be imported at a high cost. On the flip side even our biggest asset, agriculture, suffered as produce was left to rot in the fields due to shortage of labour to harvest.
Sovereign capability context needs to be established before deciding how to tackle it.
While I wholeheartedly agree with the need for taking our sovereign manufacturing capability back to the level it was in the 1970’s, when Australia was a world leader in manufacturing, I see some red flags in the thinking quoted in this article:
1) “The need for export to make Australia competitive”. Manufacturing has changed since the 1970s. The widespread use of computer based manufacturing such as laser cutting, 3D printing and robotics mean the initial investment to manufacture an item economically does not need to be as huge as it once was and designs can be changed on-the-fly. Labour content can be lower than in historically conventional manufacturing. Thousands of contemporary Australian manufacturers are doing it already.
2) What do we manufacture? Whatever we need. We used to make everything from textiles to whitegoods to cars. We have all the raw ingredients. We have the skills and we have the intellectual property to draw on locked away in museums, archives and the brains of baby boomers all over the country. Any patents protecting that IP have probably been allowed to expire by the overseas owners. Do we really need a 2022 standard of truck, forklift, washing machine to do the job or will a brand new 1975 model do the job?
3) Make the work environment comfortable, safe, clean with good ergonomics and people will come to fill the jobs.
There is an emphasis in the article on getting students into STEM from school. The latest thinking is to get young people to experience different work after their secondary education period and decide what they really like from being immersed in it. This is where life-long learning is the key. A young person might start in a production role and then be identified as having aptitude. A Trade – Associate Degree – Technologist – Graduate pathway is becoming easier to pursue and can not only take someone from indecision about their career path but also answer the fear of being stuck in a dead-end production job for life.
In addition to all the technical advances, we really need to re-think the antiquated economic theories like Keynesian Economics and “economies of scale”, which no longer hold true or are not viable in the modern political and economic environment.
The final piece that has changed the whole game is the concern about atmospheric carbon and the impact on our future. Removing the long transport components from global logistics, sourcing locally from natural resources and recycling materials now play a much bigger economic role in the cost of manufacturing and consequently, reducing the need for a large market to make it viable.
The notion of sovereignty is closely linked to the robustness of people to external shocks. Sovereignty is an early casualty in big tech’s onward and upward march. Where the rub is in the right to repair and the data enabling such. If natural or man-made calamity should befall Australia or its direct suppliers, how is the technology that we have become so dependent on kept going? We can’t rely on the benevolence of the foreign owners of the tech and their archives of information may be forever lost. The right to repair is not just about preventing waste and landfill but supports the fundamental tools for the resilience of a society and its culture.
It is a case (as usual) of “too little, too late”. The issue of national sovereignty is not limited to renewable energy or gender equality. In fact – these may be the least important aspects of being a truly independent country.
Germany being dependent on Russian gas, or transfer of almost every branch of industry to “cheaper” regions of the world by all and sundry, are the prime examples of “what not to do”. It is all great for profits and some (very limited number of) folks getting really rich – but in the interest of national sovereignty it is not.
When the first pipelines had been built from Russia to Western Europe – I considered this a madness.
A country is sovereign when it can provide more than Redback boots for its soldiers, when it is energy independent, and when it has functioning industry not limited to digging dirt and sending it overseas.
Which presents a lot of opportunities to think about the future.
Canada for it’s billion dollar shipbuilding program has a 100% local content requirement. Other countries mandate content. Our program requirements do not mandate and also promote a narrative that it introduces too much risk to manufacture in Australia. This means program primes are contractually required to manufacture in Canada for the Australian programs.
Having set up a full equipment manufacturing capability in Canada for naval shipboard design equipment manufacturing (as an Australian), we need to stop this narrative (at the government and project level) that Australian manufacturing is risky. We need to believe in ourselves and develop products. Once we do this the final cost to programs reduces as foreign products are marked up a number of times on the way to the end user and end up more expensive without subject matter experts in country.