I’ve been asked to pontificate on this subject on national radio on Sunday night. My main message will be that yes, manufacturing will be smaller than now and will generally follow the trend it’s been following and that that’s fine. There’s not much that’s special about manufacturing, though perhaps in areas of national specialism it’s a host of important R&D. That’s not true in the iconic areas like car manufacturing which have relatively high levels of technical skill, but are – alas – run as back offices of other countries.
Anyway, perhaps others have wise words and thoughts that are worth spreading.
It will be still be here but smaller.
A stronger $A means lower costs for inputs particularly investment.
Ger,many showed a strong currency doesn’t limit manufacturing
They aren’t the cheapest but they are the best.
My prediction is that Australian business in general (including manufacturing) will do well in niche areas, unusual places, and all the industries that stay right off the government radar (better yet, off everyone’s radar). We will continue to do poorly in the highly visible, mainstream manufacturing spheres such as automotive, and white goods.
Basically the industrial equivalent of …
http://en.wikipedia.org/wiki/Long_Tail
… plus a bit of basic Austrian / Libertarian theory that says the more government gets involved, the more they tinker, the more they break stuff because they don’t know what they are doing.
The Australian product of the future will consist of a handful of standardized parts, (those parts made in stupidly large numbers overseas and imported for very little money); local assembly into a nice product with some software and support/installation services, a bit of custom tweaking and small production runs.
You’re probably right about the niche areas stuff with regards to manufacturing – we just don’t have the economies of scale or the crushingly nasty working conditions that would allow us to compete on the open market in mainstream manufactured goods.
However, your stuff about governments ruining things tinkering is pure ideology with no basis in historical reality.
Look at state-led capital development in China, Germany, Japan, South Korea – the world-beaters. Heck, even the US’s manufacturing sector was very much built up in the context of government-led investment (aka WW2). John Galt, to the extent that he exists, wears cheap slacks and works in a government bureaucracy.
Who’s ahead in developing robots? They’ll probably be doing a lot of the manufacturing.
What about the general world economy …. if we enter a long period of stagnation with high unemployment, might not the globalisation model come under populist pressure? A bit more support for local enterprises? And we’ll have a bigger population, to buy local.
Probably Japan is ahead, but lots of other countries are in the running. I expect that the price of robots will become so cheap that it’s not worth making them, just buy someone else’s robots. Check out how fast the price of 3D printers is falling.
So, next question must be, what are the implications for
Australians most of all younger ones, and others out side of Australia, rivals and friends alike?
If labour intensive employment isn’t going to grow, what’s the point behind the scramble to bring vast numbers of offshore labor in when the labor market here is difficult enough for local unemployed and union-busters have us on “The Road to Serfdom”, already?
Nicholas
The answer to everything in this domain is here
http://www.thinkers.sa.gov.au/thinkers/roos/who.aspx
Smaller in what way?
http://www.pc.gov.au/research/commission/tiam/keypoints