The biggest 2010 manufacturing challenge in Australia

– By Heather Ridout, Chief Executive, Australian Industry Group

As we turn the corner on what’s been a tough and testing 18 months for manufacturing, we enter 2010 with challenges still ahead.

Last year, manufacturers have focused on:

• further integration into global supply chains
• new products and markets
• skills development and training
• reduce operational costs.

However, one of  longer-term challenges in the manufacturing sector needs to remain at the top of the policy agenda: addressing the productivity challenge as our population ages.

In this regard, we need to look at our education and training levels, we need to look at how healthy we are, we need to be able to remain in the workforce for longer.

We need to encourage women who are having children to get back into the workforce including through better childcare and more flexible work arrangements. We need to invest in infrastructure so that when we work we get more bang for our dollar. We need to invest in better technology, which of course in the nineties was a key source of productivity growth. Finally, we need to make sure we have flexible labour markets. This is an old mantra of employers but it has shown to be extremely effective in the past.

A key issue for business in both the near and long-term is the availability of skilled staff.  There are roles for both business and government in addressing this.

Many manufacturers have made a major effort to keep skilled workers and maintain training budgets during the downturn. These businesses will benefit from this foresight as the improved job outlook for 2010 and renewed demand for skilled people is expected to see shortages emerging in the near future.

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