The old model of Australian manufacturing gave us massive union power who recently funded the return to government of the ALP, their political wing. They are not well disposed to high tech industries who do not employ lots of drone members, why should they be? Their support is not assured, nor is their funding if something else should become available, it is not a recipe for sustained development.

You have a huge problem to overcome with culture in our manufacturing industry that you hope to sweep under the carpet with the new green mantra of Emerging Technologies.

These CRC are money sinks and great places to work for academics, who don't have to meet cash flow objectives or profit projections, do they even know what those are, I wonder. It's all about spin though isn't it?

We have a few, a very few, high tech industries who have managed to win overseas work at enormous cost to the taxpayer, and maybe a few more to come. No more than our statistical allowance really, nothing special there at all. It does not mean Australians are better at this, we've just had our share of good fortune and being in the right place at the right time.

I have huge doubts about this whole wishful thinking behavior of the green industry, that somehow we will develop all these emerging technologies and they will replace all the other industries that the green types want to see wiped out. it has no basis in reality, it smacks of youthful enthusiasm of someone who is not in business and attends too many seminars on how good it's going to be.

You want to develop business, it's not difficult, lower the tax rates, give us reasonable employment conditions, don't hang millstones around our necks and let us (yes us, the ones who take risks and run businesses) reinvest a share of our profits in R&D unencumbered by government and academics who think they know better - the fact you are not in business and want to give me advice is laughable.

There is an elephant in the room that dare not be mentioned. High tech modern industry is not labor intensive, it is capital and technology intensive. Modern car companies show that output these days is maximised using robotics and fewer people. The less people that develop software the faster and better it is. Committee design just doesn't work. (Which is why most government attempts at technology "leadership" fail.)
True, companies cannot be tied down by inflexible labor forces particularly when the markets are changing so quickly. Also true, a country must have employed population to be viable as a country. We can't all choose rich parents.
The current "solution" of make-work and excessive middle management...business as adult daycare, must end; However extremely high unemployment is not the answer either.
Part of the solution is population control, part reduced working hours, part re-enabling family wealth (company profits must return to reasonable levels), and part public spending on R&D to future proof society.
Sorry rpg, we have just seen what happens when "important" businesses are given too free a reign. They implode with greed and inefficiency. Small business must be allowed to operate with minimal interference, but *not* totally unfettered. Sometimes history teaches lessons that are lost in the fog of day to day operations and it is indeed governments job to govern. (They are very poor at leading or ruling but they can at least govern. Democracy is the safety valve.)

I'm disappointed in this article, Leon - its little more than a puff piece for the AMCRC

Not only emerging industries but also existing manufacturing that we have lost and that needs to be recovered here so as to reduce our foreign debt, our balance of payments crisis and our unemployment levels.
We are at about 10 or 11% manufacturing as the portion of our workforce presently and this is shrinking further.

Ozandy - "we have just seen yada yada implode with greed and inefficiency." I'm not sure what you mean here. What manufacturers have you seen implode, apart from heavily unionized (government subsidized of course) businesses that become uncompetitive and , I agreed, become adult daycare.

Free up R&D and Export grants for small to medium business, at the moment you cannot get a grant without such overbearing investment and reporting - lots start out having a go and give up. Few companies engage in CRCs, oh I'm sure you have a huge list of companies, who have registered their marketing manager, in the hope something comes their way, tell me if I'm wrong.

Red tape in the present R&D schemes is out of control, the government won't back anything unless it is GUARANTEED a winner, and if you can do that, you don't need a grant.

The USA has a tax reinvestment scheme that is simple and amazingly, you'll be stunned by this - it works! (without CRCs or PHDs) this of course allows the companies themselves to reinvest their money, not the government guided by academics who don't run businesses making business investment decisions (which is farcical)

If you want to see manufacturing evolve and improve, then stick to business fundamentals, a bold plan for business developed by academics is just a bad joke. You take money from businesses as tax then give to CRCs to "play at business".

The problem we all face is lack of cash due to tax and socialised R&D. Who says that the best way to develop R&D in a country is to have the government and academia picking winners anyway?

We can help create conditions for sustained economic growth, but can’t determine which industries will flourish when we do. Growth is about transformation, about change. Policies which embrace openness, competition, change and innovation will promote growth. Policies which have the effect of restricting or slowing change by protecting or favouring particular industries or firms are likely over time to slow growth to the disadvantage of the community. So policy-makers need to understand the drivers of economic growth, and whether and how policy can influence them. Policies developed without this understanding, and particularly those with mainly political objectives, are unlikely to be successful, and have often had serious negative consequences both economically and politically.

Over the last 20 years, variations in growth between regions and countries have increasingly been explained by “endogenous” growth theory, in which growth depends on characteristics of the economic environment rather than on exogenous factors. Explanations with the clearest implications for policy come from “Schumpeterian” growth theory, based on the notion of “creative destruction.” They stress the dynamic nature of modern economies and the importance of change - including firm entry and exit - in driving growth in productivity and national income.

This has implications not only for policies which are clearly economic in nature, but also a wide range of policies which affect economic outcomes, for example in education and training, social welfare, regulation and provision of infrastructure services. For example, arguing that longer school attendance or more tertiary education will boost growth is meaningless unless you understanding the underlying connections and can demonstrate that the proposed use of resources exceeds their opportunity cost (the best risk-adjusted rate of return on alternative uses, including tax cuts).

Briefly, we need policies which make it easier for firms to create and retain wealth, whatever their scale, industry or export-focus. More specifics later!

We can actually determine which industries will flourish simply by doing the patriotic and right thing and reintroduce protectionism.
Production of iron, steel and aluminium locally- a cinch if you have a captive market by preventing any imports of those resources; and reducing motor vehicles fom overseas and giving preference to an whole new Australian motor vehicle industry.
It is easy to work out demand and act accordingly.
ONESTEEL and other Australian companies could employ more workers without worrying about metals coming in from Asia.
Time that we tell Kevin 07 and M Turnbull & co that they need to wakeup and realise that protectionism is very good when done in key industries to the extent necessary to restore full employment, for strategic and national reasons and to reduce our foreign debt. Great multiplier effect here with metals and motor vehicle production.
Only import for other things once we sort out how many industries require a green light against imports.

Possibly the worst place in Australia to develop blueprints for export industries would be a university. The education system is one of the worst culprits for imports.

The education department in one state imported 40,000 laptop computers for its teachers, and then it installed imported software only onto those laptops. Although the laptops were paid for by the public, no hardware or software came from Australia. This is typical of the education system for primary and high schools, but there is almost nothing in a University that is made in Australia also.

When the teachers have no interest in anything made in Australia, then the students gradually become the same also, and eventually there is no desire for locally made products, or even a desire to produce locally made products.

There has to be a change in the attitude of the public. At present it is completely acceptable or even fashionable to buy imported products. This does nothing for Australia in the longer term, as we will gradually lose the ability to produce anything

Webby, we trade because it makes us better off. We export things we produce competitively - ore, some metals, agricultural produce, tourism, education - and buy things we don't - small cars, electronics, clothing and footwear, etc, etc. Protectionism means making things we aren't good at; prices are higher, quality lower, living standards fall. Some years ago the cost of protecting too many, too small car producers was that on avaerage cars cost more than $4000 more than without protection, and Australian-built cars were consistently at the bottom of reliability surveys. The high price of cars was built into the price of every product and service whose manufacturers used cars, making them less competitive. Under protection, the firms which can compete are taxed to shelter those who can't. Madness, in my view.

We should do what we do well, i.e. can be world conmpetitive in, and not prop up industries which can't compete. That gives us higher living standards and employment, better and more varied products, and better things to spend taxes on.

We can actually determine which industries will flourish simply by doing the patriotic and right thing and reintroduce protectionism.
Production of iron, steel and aluminium locally- a cinch if you have a captive market by preventing any imports of those resources; and reducing motor vehicles for overseas and giving preference to an whole new Australian motor vehicle industry.
It is easy to work out demand and act accordingly.
ONESTEEL and other Australian companies could employ more workers without worrying about metals coming in from Asia.
Time that we tell Kevin 07 and M Turnbull & co that they need to wakeup and realise that protectionism is very good when done in key industries to the extent necessary to restore full employment, for strategic and national reasons and to reduce our foreign debt. Great multiplier effect here with metals and motor vehicle production.
Only import for other things once we sort out how many industries require a green light against imports.
Too much emphasis on wealth creation is really just a poor excuse for greed justification and the discredited trickle down effect emenating from Sydney's North Shore and Melbourne's Kew. And I am bored with it.

Leon - I was sufficinetly intriged by your claim that manufacturing was Victoria's biggest employing sector to look up a few stats. Here are the Aus stats. the first figure is number, the second percentage.
ANNUAL AVERAGE 2008
`000 %
Agriculture, forestry and fishing 354.6 3.3
Mining 163.2 1.5
Manufacturing 1 049.1 9.8
Electricity, gas, water and waste services 122.9 1.1
Construction 986.5 9.2
Wholesale trade 404.5 3.8
Retail trade 1 216.0 11.3
Accommodation and food service 709.2 6.6
Transport, postal and warehousing 566.4 5.3
Information media and telecommunications 223.6 2.1
Financial and insurance services 402.4 3.7
Rental, hiring and real estate services 203.2 1.9
Professional, scientific and technical services 792.2 7.4
Administrative and support services 341.5 3.2
Public administration and safety 644.2 6.0
Education and training 808.3 7.5
Health care and social assistance 1 109.0 10.3
Arts and recreation services 187.5 1.7
Other services 456.1 4.2

And I was surprised to find that manufacturing was still important - not as important as you claim but important. Its share of the employment pie has been declining for decades. Can we do anything about manufacturing? One of the major lessons Australian governments have learnt in recent years that any serious attempt to help specific sectors in the economy simply backfires. The high tariff barriers of past years did nothing more than protect profits, and some jobs, plus a lot of antiquainted equipment and bad management practices. We were all better off when they went. Attempts to pick winners also proved a waste of time. Your centre has its uses but maybe we should give industry policy a rest. The reason manufacturing has been hard hit is that there is a global financial crisis on..

I do still wonder about manufacturing in Oz..
I’ve done a bit myself in the past.
I’ve been thanked for doing that by being bastardized by government in every way past imagination.

Manufacturing isn’t difficult.
It takes little more than husbanding resources and performing the task.

What scares most off from making product is the total refusal of banks to finance projects and the total refusal of ‘governance’ to abide by their own rules of engagement purportedly supporting OzIndustry in its vain attempts to get the job done.
I mean by this – going to one’s own bank with an ‘Official Purchase Order’ from the Commonwealth and being told to go away by that bank.
Excuse being that the ‘customer’ (being the C of A) might not honour the agreement or pay for the product once manufactured.
Now how compromised could that be?

The bottom line is – stuff this country.
Why keep pretending that individuals of imagination should keep bashing their brains out against the brick wall of stupidity; the dolts entrenched within ‘governance’ and their network pals within the ‘professional guilds’.
This place still operates on the same rules insinuated by the Rum Corps.

To summarise –
“How do you make a small fortune manufacturing in Australia?
Easy. Start with a humungous fortune and watch it wither away!”

The fundamental problems for Australian manufacturing are free trade and globalization.These two fashionable words give a warm inner glow to a lot of people who have either never bothered to look into the enormous costs to individual nations or they have a vested interest.

Sure,as a number of commenters have said,there are problems with governments in protectionism but at least we can do something about our governments if we keep informed and politically active.
Once control is lost to a mindless,at best,or to a hostile foreign entity or system,try doing something about that.

If we want a civil society,and the alternative is rather scary,then the citizenry must have ultimate control of the nations's direction.

Faustino,
If we are better off as you say, then why do we have such a large trade deficit. Could it be that we are now living beyond our means, and simply have our heads in the sand.

While not agreeing fully with protectionism, I do think that governments should be at least encouraging local manufacturing.

Also you can cross education from your list of what we do best, as it is a significant net importer, and not an exported as many in the education system would like others to believe. In some areas of education, student marks have now fallen below world average, while at the same time the education system imports everything it can possibly purchase.

I was in an agricultural industry that used the soil to hold up the plant, and the crop was grown with fertilizers that were imported. Almost all equipment used in that industry was imported, and most other agricultural industries are the same.

The mining industry does not value add, and the ore or coal eventually runs out. Most of the equipment used in mining is being imported also.

Overall, I would think we are becoming the mentally lazy country, where we use items that were invented or developed elsewhere, and we pay for those items with a quarry.

I guess this might be off Topic , my topic is Timber Corp , I don't really know much about it but I have been there .
I refer to the Boort Project the Olive Plantation .
Most in Oz would see this project as a fraudulent Tax Rort and the adds between the pages on OLO would reinforce this thinking.
I am not saying the Ad's are bad and no one can say that the plantations are bad .
Garret should be promoting these schemes as Carbon Sinks paid for by the shareholders who have now lost everything .
I would urge people to check out this Plantation , it will take you all day to do so , it is a humongous scheme and a credit to those who built it.
It has been built on practically useless farming land however land that suits Olives .
It employs a lot of People .
It is irrigated by ultra efficient no loss systems .
It is producing Olives just like it was supposed to .
It will be an efficient Carbon Sink for 200 years plus.
A continuing Employer in a high unemployment area .
It will support Boort a Tourist Hub for Country People in districts surrounding Boorts Lake a Sporting Facilities.

Should our Government through a lifeline to the investors who built this amazing project ?

Why should our Investors burn because our Government and US Governance failed to properly Regulate "Jock Straps" running US Banks .

Dear ShazBaz001,

Your interest in the topic of Timbercorp was addressed in the Editorial of News Weekly magazine ( May 30th, 2009 edition...not currently on their website yet but should be there within the next week or so or you could contact them and get a complimentary copy sent to you).
The url is: http://www.newsweekly.com.au/
however it is for the prvious edition currently. Wait for the May 30th edition to go online and go to EDITORIAL by Peter Westmore, the National Prsident of the National Civic Council.
The article is entitled "Australia's biggest financial scam?".
I read it today as I am a subscriber.