Even the machines that dig the dirt are made across the water.Instead of digging silicon we should be working with it.

The future for the Australian electronics industry is NOT in computers, consumer electronics or semiconductors. These ‘commodities’ are produced in high volumes and we don’t have the high volume plants or low labour costs of Asia. What we do have (and it has escaped your analysis) is a vibrant, growing and successful electronics industry in Australia that produces high value-added niche products for diverse global markets in relatively small volumes. These ‘hardware’ products have significant ‘embedded’ software and are sold principally in the developed markets of USA and EU.

This industry is heavily concentrated in Adelaide, which has 5.5% of Australia’s population and 22.3% (ABS 8126.0-2003) of all electronics design and manufacturing employment. This proportion continues to grow and likely now exceeds 25%. One third of the electronics industry in Adelaide is defence related, the other two thirds produces industrial, commercial, telecommunications, medical and scientific systems.

Adelaide is one of a small number of global places that have developed such a ‘nationally significant’ concentration of electronics industry, others include Austin, Silicon Valley, Boston, Dublin, Glagow/Edinburgh.

Revenue of Adelaide-based electronics industry firms in 2005-06 will exceed A$3 billion and at its 5 year average growth rate will double in the next 5 years, as this industry continues to attract talented, well trained and well paid people to this ‘new-economy’ industry.

What happens when the resource boom busts? we all fall about in dismay.

Patrick Donahoo in an article a couple of days ago raised a similar issue in relation to R and D - we dont do it - because as long as we are doing ok today the future will take care of itself - or so we think.

We are, at an individual level fairly innovative, but most of it has relied on private and individual initiatives - but once we get to the implementation phase capital from both the public and private sector recedes farther faster than the tides at Broome.

We have just lept of the sheeps back and are now riding on the coal train.

As long as we lack a national vision based on sustainability, of the economy, the environment and social cohesion we will lurch from crisis to crisis.

The third oil shock will hit us where it hurts and erode some of the gains from resources boom. It is likely we will exploit our uranium reserves to offset the slide in other resources and dress it up to be a greehouse frinedly approach to the energy crisis. But in the end being lucky enopgh to have expensive dirt in ones back yard and beclever enough to dig it up is not really a solution for the future - at least long term - but it does seem to be the only one we can dream up

Hi Ronald,
I thought that somebody might raise the existence of the local non-consumer electronics industry. I mentioned there was "no significant local manufacturers of *consumer* electronics". I do not disagree that there is a significant local electronics industry in the automotive, medical and defence related electronics which is doing well and is to be commended.
I would argue that there is scope for Australia to have its own Apple, Sony, or AMD and the commodification of these areas actually creates as many opportunities to join in as it takes away. As you rightly say the commodification of these industries does squeeze margins, but there is still plenty of money being made in these companies and industries even in high labour cost countries.
With regards to the lack of large manufacturing plants locally, this is exactly what I believe should be addressed. These plants can be created with the right incentives. Semiconductor plants for example are actually not very dependent on the local cost of labour as they are so automated. As such are also not huge direct employers but they can be used to found a wider industry.
I think it is time we admitted that the niche approach is not the way to get seriously involved. It has not worked to get us into the thick of it so far and is unlikely to do so in the future.
Regards
Damian

Maybe if we processed our iron ore/minerals ourselves instead of shipping it overseas, and selling as a finished product,we could afford to build our own war ships, planes and tanks instead of buying them 'off the shelf'from other countries.
We need to bolster our manufacturing industries, not dumb them down, we may have urgent need of them one day and they will not be there.

I am an Indian citizen who studied in a reputed University in Melbourne and returned to India last year. I have worked in IT industry in India as a microchip design engineer for 3 years and have seen closely electronics Industry in Australia and India. Its hard to get a job in electronics industry in Australia even if you are a permanant resident of Australia. Motorola's chip design spinoff Freescale closed its Adelaide office and 135 engineers lost thier jobs(extended till september). And not too many electronics giants are having operations in Australia and in many cases if they have one its marketing office. India's silicon valley Bangalore have now become a land of opportunity..almost all big chip design/telecom companies have operations in Bangalore and have a large workforce. Right now only chip design activity is happening in India and manufacturing i.e semiconductor fabs are in far east like Taiwan, China & Korea. The first semiconductor fab is coming up in Hyderabad(Not in Bangalore as quoted in this article)with the invest of US$3 billion. Chip designing requires lot of intelligence unlike chip manufacturing which sucks lot of resources and leads to pollution. Given Australia's abundant natural resources, If Australia invests heavily in education and develops a skilled pool of young people then it definitely can produce world class electronics companies. I have seen in Australia university education is affordable only to the well off people unlike in India where government pays for students education if he is a merit candidate and student has to pay only the nominal fees(usually $200-$300 a year for an electronics engineering degree).