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MANUFACTURING WORKFORCE ISSUES PAPER

October 2013

Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 1

ISBN 978-1-921916-98-4 (online)

© Commonwealth of Australia 2013

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth.

Requests and inquiries concerning reproduction and rights should be addressed to the Department of Industry, GPO Box 9839, Canberra ACT 2601.

Disclaimer: The material contained in this paper has been developed by the Australian Workforce and Productivity Agency.

The views and recommendations do not necessarily reflect the views of the Australian Government, or indicate its commitment to a particular course of action.

The Australian Government and the Australian Workforce and Productivity Agency do not guarantee or accept any legal liability or responsibility for the accuracy, completeness, or usefulness of any information disclosed.

The Australian Government recommends that users exercise their own skill and care with respect to their use of this paper and that users carefully evaluate the accuracy, completeness and relevance of the material in the paper for their purposes and where necessary obtain any appropriate professional advice relevant to their particular circumstances.

The paper can be accessed at www.awpa.gov.au.


http://www.awpa.gov.au/

ContentsList of figures.........................................................................................................................................4

List of tables..........................................................................................................................................4

Abbreviations and acronyms...............................................................................................................5

1 The study........................................................................................................................................6Introduction......................................................................................................................................6

AWPA’s approach to workforce development.................................................................................7

Issues paper....................................................................................................................................7

Consultation.....................................................................................................................................7

2 Manufacturing—what lies ahead?...............................................................................................8Introduction......................................................................................................................................8

Context............................................................................................................................................8

Manufacturing—more than just making things................................................................................8

Globalisation....................................................................................................................................9

Asian century.................................................................................................................................10

Technology....................................................................................................................................11

Strengths and opportunities...........................................................................................................11

Known opportunities......................................................................................................................12

3 Manufacturing workforce—present and future........................................................................15Introduction....................................................................................................................................15

Where are the jobs now?...............................................................................................................15

Who works in these jobs?..............................................................................................................20

What skills do we have now?........................................................................................................21

What challenges do we need to address—now and in the future?...............................................26

4 Leadership and management.....................................................................................................35Introduction....................................................................................................................................35

Definition........................................................................................................................................35

Manufacturing management in Australia.......................................................................................36

Future manufacturing leadership and management......................................................................37

5 Preparing for the future—support programs, policies and initiatives...................................39Introduction....................................................................................................................................39

Initiatives to address existing skills challenges..............................................................................39

Future-focused initiatives to support Australian manufacturing in the 21st century......................41

Initiatives to drive leadership and management............................................................................42

Attachment A—How to respond to this issues paper......................................................................44Submission on Manufacturing workforce issues paper.................................................................45


List of figuresFigure 1 Employment in manufacturing by subsector, 2002–03 and 2012–13...............................15

Figure 2 Average annual projected employment growth to November 2017, by manufacturing subsector (%)....................................................................................................................16

Figure 3 Employment in manufacturing by occupational classification, May 2013.........................19

Figure 4 Highest qualification achieved by workers in the manufacturing industry (%)..................22

Figure 5 LLN skills of adults at level 3 and above, by skill and age group (%)...............................27

Figure 6 Average management performance in manufacturing, selected OECD countries...........36

List of tablesTable 1 DAE scenarios, projected average annual employment growth by manufacturing

subsector, 2011–2025 (% p.a.).........................................................................................17

Table 2 DAE scenarios, projected average annual growth rate for top 10 manufacturing occupations, 2011–25 (% p.a.).........................................................................................20

Table 3 VET qualifications completed by AQF level in manufacturing, 2007–11, numbers of graduates..........................................................................................................................23

Table 4 Contract completion rates (%), technicians and trade workers, for contracts commencing in 2008..............................................................................................................................24

Table 5 Proportion of students enrolled in Manufacturing Skills Australia and all Industry Skills Councils courses, by type of provider (%), 2007–12........................................................25

Table 6 Proportion of qualification completions in Manufacturing Skills Australia and all Industry Skills Councils courses, by type of provider (%), 2007–11...............................................25


Abbreviations and acronymsABS Australian Bureau of Statistics

Ai Group Australian Industry Group

ANZSCO Australian and New Zealand Standard Classification of Occupations

ANZSIC Australian and New Zealand Standard Industrial Classification

AWPA Australian Workforce and Productivity Agency

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAE Deloitte Access Economics

DEEWR Department of Education, Employment and Workplace Relations

GDP gross domestic product

LLN language, literacy and numeracy

MSA Manufacturing Skills Australia

NCVER National Centre for Vocational Education Research

NWDF National Workforce Development Fund

OECD Organisation for Economic Co-operation and Development

SME small and medium enterprise

RTO registered training organisation

VET vocational education and training

WELL Workplace English Language and Literacy


1 The studyIntroductionThe Australian Workforce and Productivity Agency (AWPA) is an independent statutory body which provides advice to the Australian Government on current, emerging and future skills and workforce development needs. In conjunction with industry, AWPA also analyses sectoral skill needs to support workforce planning and productivity. As part of this work AWPA is preparing a workforce development strategy for the manufacturing sector.

Manufacturing is the fourth largest employing sector in Australia, employing 921,400 individuals, or 8.0 per cent of total employment.1 The sector also accounts for 7.1 per cent of Australia’s gross domestic product (GDP), 35.0 per cent of exports and 24.4 per cent of business expenditure on research and development. While the sector is dominated by small businesses (80 per cent of employing manufacturing business have 1–19 staff), large manufacturing businesses (over 200 employees) produce over half of the industry value added of the entire sector.2

The manufacturing sector has been under pressure from factors such as the high Australian dollar, competition from overseas competitors in low-cost economies and slow productivity growth across the economy. The sector’s output has not kept pace with the broader Australian economy, with average annual growth in industry gross value-added of 0.2 per cent since 2002–03, compared to 3.0 per cent growth in GDP over the same period. Employment in the industry has also declined at an average annual rate of 1.2 per cent over this time. This trend is projected to continue in the medium and long term.

While these figures potentially cast a shadow over the sector, they are not necessarily a predictor of the future of manufacturing in Australia. The nature of manufacturing has been moving away from the concept of simply ‘making things’ to integrate value adding services such as design, prototyping and marketing. This has, and is expected to continue to, contribute to the sector’s demand for skilled workers. In many subsectors, lower-skilled and labour-intensive jobs such as packing and product assembly are being replaced by automated processes or moved to low-cost economies, while the demand for higher skilled jobs such as technicians and production managers has increased. Public perceptions of manufacturing as a declining industry also affect recruitment of today’s graduates.

The demand for higher skilled jobs, coupled with projected declines in employment for most subsectors of manufacturing, will place pressure on the sector’s existing workforce. A relatively high proportion of the current manufacturing workforce have low language, literacy and numeracy skills and 45 per cent have no post-school qualifications, therefore pathways for workers to up-skill or retrain will be important. An ageing workforce will mean businesses will need to consider how to retain older workers to utilise their experience and knowledge withinthe business. Improved leadership and management skills are also necessary for businesses to increase productivity, innovate, adapt to changing business models and integrate into global supply chains.

AWPA’s final report to the Australian Government will outline possible strategies for industry, the education and training sector, and government to promote attraction and retention of skilled workers, increase the availability and supply of specialist skills, improve ongoing skills development and promote the effective utilisation of skills in the workplace.

1 Department of Industry, 2013, Manufacturing Data Card, http://www.innovation.gov.au/Industry/Manufacturing/Pages/ManufacturingDataCard.aspx accessed 21 October 2013.

2 ABS, 2013, Counts of Australian businesses, cat. no. 8165 and ABS, 2013, Australian industry 2011–12, cat. no. 8155, table 2.1.


AWPA’s approach to workforce developmentAWPA believes that workforce development is concerned with:

providing knowledge and skills through tertiary education

matching tertiary provision to the needs of industry, individuals and society

using knowledge and skills effectively at work

further developing knowledge and skills in the workplace.

An effective workforce development strategy requires a collaborative approach between industry, unions, employer groups, the tertiary education sector and government as well as a shared agenda between stakeholders responsible for workforce development.

Workforce development refers to more than just training. It also involves integrating business strategy, work organisation and job design to facilitate continuous improvement in skills development and utilisation.

Issues paperThis paper seeks to highlight key issues that will impact the workforce requirements of the manufacturing sector over the next five to 10 years. It has been developed to generate discussion and input from stakeholders on the workforce needs of the sector. Feedback from stakeholder submissions and consultations will be incorporated into AWPA’s final report. This paper draws on the considerable body of research on the sector, initial consultations and other data sources to:

examine current and future developments in the industry and consider the impacts on workforce and skills requirements

identify the key challenges related to skills demand and supply for the sector

consider current initiatives to address these challenges and identify methods to replicate best practice in workforce development across the industry.

ConsultationAWPA is inviting submissions on the issues paper by 22 November 2013. Information on making a submission is at Attachment A of this paper.

As a part of the consultation process, AWPA is also seeking case studies, or candidates for case studies, to provide real-world examples of successful approaches to workforce and skills development in the manufacturing sector for the final report. Examples of relevant case studies could include:

manufacturers that have navigated their way through significant restructure (what they did and what strategies they employed to bring the workforce along with them)

examples of best practice workplace development strategies at the enterprise level (this could include strategies used to attract and retain staff, apply skills and training and job design)

successful programs or initiatives offered by government, industry, or education and training providers which address skills gaps and encourage or enable workforce development.


2 Manufacturing—what lies ahead?IntroductionGlobalisation of supply chains, technological advances, and changing consumer demands have presented difficulties, opportunities, challenges and potential rewards across the manufacturing subsectors. The structural changes that are occurring now are likely to continue, or accelerate, into the future and are expected to impact on the required skill profile of the manufacturing workforce. This section deals with the drivers of change for the sector over the next 10 years and what skills the manufacturing workforce may need.

ContextThe contribution of manufacturing to the Australian economy has decreased over time. The sector’s contribution to GDP dropped from 9.7 per cent in 2002–03 to 7.1 per cent in 2012–13.3 The range of products being made in Australia has changed, reflecting changing markets, the impact of global supply chains and some shifting of production to countries with low-priced labour costs, particularly in Asia. The manufacturing subsectors with average annual growth for industry gross value added over the 10 years to 2012–13 were non-metallic mineral products (1.2 per cent); metal products (1.7 per cent) and machinery and equipment (1.0 per cent). Industry gross value added for all other manufacturing subsectors declined, with the greatest contraction in textile, clothing and other manufacturing (6.4 per cent per annum).

Employment in manufacturing has also been in decline over the last 10 years. There were around 1.04 million manufacturing employees in August 2003. By August 2013, employment levels in the sector had reduced to 921,400, a decline of 11.3 per cent. In the same period, the total average employee numbers (including manufacturing) increased by over 22.3 per cent.4

The downward trend in total employment across the manufacturing industry and in more than half its occupational classifications is indicative of the structural pressures. Manufacturing Skills Australia (MSA) highlight that many lower-skilled and labour-intensive jobs in manufacturing are being replaced by automated processes with workers taking greater responsibility in quality control and operational efficiencies.5

Manufacturing—more than just making thingsTransforming raw materials into finished products is an essential component to any definition of manufacturing, but it seems now that manufacturing encompasses the need to add greater value to the finished product at each stage of production.

This paper is underpinned by the assumption that the current and emerging skills requirements of the manufacturing sector will need to be reinforced by skills that enable manufacturers to increasingly do more than just transform materials into products in a competitive manner. They also require the capacity to identify, design, develop, make, sell and service products and services that are in demand in a quickly changing global environment.6

Manufacturing is no longer a synonym for production; it represents ‘the full cycle of activities from research and development, through production, logistics and services, to end of life management’.

3 ABS, Australian System of National Accounts, cat. no. 5206.0.4 ABS, Labour force Australia, detailed, quarterly, cat. no. 6291.0.55.003.5 Manufacturing Skills Australia, 2013, Environmental scan: a new era for manufacturing, p. 32. 6 Future Manufacturing Industry Innovation Council, 2011, Trends in manufacturing to 2020, p. 1.


Manufacturers must operate in globally competitive markets, inventing, and innovating and managing, global supply chains and providing aligned services.7

These definitions, which reflect themes common to much of the recent literature on the future of Australian manufacturing, are an important foundation for workforce planning. It is likely that the forces that shape manufacturing in a highly competitive and complex global environment will include a greater shift to customisation and personalisation, the growing importance of the low-carbon economy, technology that transforms business models, and collaboration and connectivity.

The occupations measured as part of the sector relate, for the most part, to traditional perceptions of workers involved in manufacturing processes, as measured by the ABS using ANZSIC8 and ANZSCO9 definitions. However, while these occupations continue to have relevance in parts of the sector, many are in decline, while new occupations requiring different skills are emerging. The Future Manufacturing Council notes that:

Business models these days are often bundles of services which package a manufactured product or range of products and these may not be counted as manufacturing in the ABS data. In other words the size of manufacturing and related skills is significantly understated.10

GlobalisationGlobalisation is expected to continue to impact Australian manufacturing. Global companies in emerging economies are reshaping manufacturing competition through a ‘high-value, low-cost model’,11 which will impact the future of company models and structures in Australia.

Another effect is that manufacturers are not always sourcing products and services locally. The Smarter manufacturing for a smarter Australia report noted that global supply chains are increasing their share of world trade and that industry value chains are an important source of technology, collaboration, and knowledge.12

Australian manufacturers will have the opportunity to identify which products and services are best managed and sold domestically and internationally. There are advantages to be gained from new and larger markets by customisation of products and services for international markets. Additionally, integration of some aspects of the manufacturing activities into external locations to take advantage of local knowledge and operational efficiencies can underpin these expanded marketing opportunities. AWPA’s initial consultations suggest that the skills and experience of dealing in global supply chains are, and will continue to be, important for manufacturers.

An example of the opportunities in global supply chains in operation can be seen in formal initiatives such as the Defence Materiel Organisation’s Global Supply Chain program. The program provides opportunities for Australian industry to access global supply chains of large multinational firms such as BAE Systems and Boeing. These programs are intended to identify and position Australian firms by highlighting advantages such as capability, product, delivery schedule or price.

Australia’s location means that manufacturers are well positioned to take advantage of global supply and distribution chains with Asian linkages. This will be vital to the future of Australian manufacturing

7 Australian Business Foundation, 2011, Manufacturing futures, p. 15.8 ABS, 2013, Australian and New Zealand Standard Industrial Classification (ANZSIC), cat. no. 1292.0,

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1292.02006%20(Revision%202.0)?OpenDocument, accessed 5 August 2013.

9 ABS, 2013, ANZSCO—Australian and New Zealand Standard Classification of Occupations, cat. no. 1220.0, http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1220.02013,%20Version%201.2?OpenDocument, accessed 5 August 2013.

10 Future Manufacturing Industry Innovation Council, 2011, Trends in manufacturing to 2020, p. 11.11 Brown, P and Lauder, H, 2012, ‘The great transformation in the global labour market’, Eurozine, September

2012, www.eurozine.com/articles/2012-09-05-brown-en.html, accessed 29 May 2013.12 Prime Minister’s Manufacturing Taskforce, 2012, Report of the non-government members, Smarter

manufacturing for a smarter Australia, p. 43.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 9

http://www.eurozine.com/articles/2012-09-05-brown-en.html

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/1292.02006%20(Revision%202.0)?OpenDocument

because emerging Asian markets are contributing more to global growth than established economies. Asia will be a growing market, particularly for food products. The range of opportunities will enable Australian manufacturers to consider where they can and want to be located in the various supply chain opportunities they identify. Australian businesses are already focusing on those elements of supply chains—from conception to production to consumer—where they have a comparative advantage.

Question for discussion

What are the priority skills required in the manufacturing workforce to work in global supply chains?

Asian centuryThe Australia in the Asian century white paper, 2012, examines the implications and opportunities involved in taking advantage of the largest structural shift in two centuries which is now taking place in the world economy.

Conservative estimates suggest that increasing non-resource exports to Asia through improved Asian capabilities could provide the Australian economy with an additional $60 billion to $115 billion over 10 years.13 As manufactured products currently represent around 76 per cent of Australian merchandise exports excluding mining,14 a substantial part of this potential export opportunity should be available to Australian manufacturers.

The ability of the Australian economy to flourish in the coming decade will depend on our ability to raise productivity, develop a deeper understanding of the changes taking place in the Asian region and build successful long-term relationships. This will require ‘new capabilities, new business models, open mindsets, greater investment in skills and education and a higher degree of specialisation in areas where Australia has a distinct comparative advantage’.15 Put another way, manufacturers will need to foster innovation in their business models and workforce to maximise potential Asian opportunities.

The Asialink strategy for developing an Asia-capable workforce states that ‘one of the biggest impediments to realising the Asian opportunity is the absence or underdevelopment of critical individual and organisational capabilities’.16 The strategy suggests that building a workforce capable of performing in the Asian century requires broad change on a national scale. It recommends that business, in conjunction with governments and the training and education sectors, take the lead in developing Asia capability17 in the Australian workforce, particularly in the pre- and post-transformation roles of future manufacturing.

13 Asialink Taskforce, 2012, Developing an Asia capable workforce—a national strategy, Asialink, University of Melbourne.

14 ABS, International trade in goods and services, Australia, cat. no. 5368.0.15 Australian Government, 2012, Australia in the Asian century, white paper, p. 109.16 Asialink Taskforce, 2012, Developing an Asia capable workforce—a national strategy, pp. 4–5.17 Although the phrase ‘Asia capability’ is often used in the strategy, it does not attempt a precise definition, but

discusses a range of components. These include the ability to work cross-culturally by having sufficient understanding of local business and legal environments, knowledge of socio-political-cultural history and traditions (cultural literacy) and language skills, although many submissions to the Australia in the Asian Century Task Force suggested that language capabilities were not a top priority.



If manufacturers are to exploit opportunities from the Asian century, what are the capabilities leaders, workers and managers need?

TechnologyThe increased use of advanced technologies like robotics and other forms of automation has decreased demand for lower skilled jobs across assembly lines in many subsectors of manufacturing. For some roles involving new integrated technologies such as in mechanical and electrical manufacturing, it means that workers need skills to operate and manage computerised and technological advances in machinery and equipment.

The effects of contemporary technological tools and the ability of technicians to adapt computerised and mechanical solutions to specific needs of manufacturers is producing a revolution not only in the production of goods, but also in the total scope of their development, design, delivery and servicing. The digital economy will enable and perhaps compel the manufacturing sector to advance by adopting a range of technological options. Intelligent manufacturing is expected to encompass ‘smart factories’ with agile manufacturing and customisation, virtual factories which create value through globally networked manufacturing and logistics, three dimensional (3D) printing and digital factories with design and product life cycle management.18 These developments highlight the need to continue developing a wide digital skills base across the manufacturing workforce and management with the skills to apply technologies across their business processes.

The CSIRO considers that lightweight robotics and advanced ICT-based systems will be integral to creating smart, flexible factories of the future. In its white paper on the value of lightweight assistive manufacturing solutions, it argues that assistive information technologies and robotics-based technologies will enhance, rather than replace, the roles of manufacturing sector workers. Lightweight assistive systems will facilitate humans’ work in factories, resulting in jobs with more high-value tasks and fewer repetitive tasks and physically demanding activities such as weight lifting and tool picking. Remote training systems will facilitate continuous on-the-job training for workers.19


How are recent and emerging advances in technology impacting on skill requirements?

Strengths and opportunitiesThe Smarter manufacturing for a smarter Australia report identified the need for Australian manufacturing to continue to compete and innovate in low to medium technology areas where it has comparative advantages.20 It also identified niche areas of potential growth. The taskforce’s report nominates current and emerging manufacturing opportunities in:

upstream processing in extractive, forestry and agricultural industries

18 Roos, G, 2011, Manufacturing into the future, p. 25.19 CSIRO, 2012, An initiative to enhance SME productivity through fit for purpose information and robotic

technologies: the value of lightweight assistive manufacturing solutions, p. 12.20 Prime Minister’s Manufacturing Taskforce, 2012, Report of the non-government members, Smarter

manufacturing for a smarter Australia, p. 8.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 11

machinery, equipment and consumables, particularly to the mining and construction sectors

niche areas of knowledge-intensive manufacturing, such as medical and scientific equipment, pharmaceuticals, transport equipment including aerospace and advanced materials

niche products that use creative design and marketing to establish unique brands and reach new markets, such as cosmetics and high-value fashion

building critical mass in automotive and defence supply chains.21

Similarly, the Future Manufacturing Council noted that the resilience of Australian manufacturing lies in firms that optimise the use of their human, intellectual and material capital, dealing in products (and services attached to them) that are in demand.22

Growth in manufacturing exports may also provide a clue into where future opportunities lie for the sector. In 2012, 70 per cent of Australia’s manufacturing exports fell into three categories: primary metal and metal products; machinery and equipment; and food products. These subsectors have each risen by around 2 per cent per annum over the seven years to 2012, while overall manufacturing sector exports have only risen by 1.2 per cent.23

The scarcity of many natural resources (such as petroleum, rare earths and readily accessible metals), calls for greater environmental sustainability and the growing importance of a low-carbon economy are giving rise to the emergence of leading-edge ‘sixth wave’ innovations. The innovations include biomimicry,24 green chemistry and green nanotechnology,25 whole system design, industrial ecology, greater resource productivity, sustainable energy and satellite technologies.26

To take advantage of Australian manufacturing’s strengths and opportunities, workforce planning and development for the range of skills required will need to recognise that future manufacturing will demand strong leadership and management skills. AWPA’s initial stakeholder consultations indicate that trade qualifications will still be in demand in the manufacturing sector and that the base skill qualification in the manufacturing sector now needs to be at a Certificate III level. Managers and supervisors will need to seek productivity gains by encouraging innovation at all levels of the workforce and by working collaboratively to analyse job design and work organisation as part of the workforce development process. The sector will also require innovative and knowledgeable specialist technical and ICT staff and capable marketing people with abilities across culturally divergent markets.

Known opportunitiesThe following summaries of two AWPA sectoral studies highlight opportunities for Australian manufacturing in the next decade.

Defence materiel supply The defence materiel supply industry’s workforce accounts for a relatively small proportion of Australia’s current employment, consisting of around 30,000 employees in subsectors such as aircraft manufacturing, fabricated metal products and explosive manufacturing.

21 Ibid., p. 2.22 Future Manufacturing Industry Innovation Council, 2011, Trends in manufacturing to 2020, p. 1. 23 ABS, 2013, International trade in goods and services, Australia, January 2013, cat. no. 5368.0, Table 32a.

Due to change in ANZSIC code, information before July 2005 is unavailable.24 Biomimicry (from bios, meaning life, and mimesis, meaning to imitate) is a new discipline that studies nature’s

best ideas and then imitates these designs and processes to solve human problems. http://biomimicryinstitute.org/about-us/what-is-biomimicry.html, accessed 29 July 2013.

25 ‘Encompassing nanoscale science, engineering and technology, nanotechnology involves imaging, measuring, modeling, and manipulating matter … at dimensions of roughly 1 to 100 nanometers (one-billionth of a meter)’. http://www.ausnano.net/content/about, accessed 29 July 2013.

26 Future Manufacturing Industry Innovation Council, 2011, Trends in manufacturing to 2020, p. 12.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 12

http://www.ausnano.net/content/about

http://biomimicryinstitute.org/about-us/what-is-biomimicry.html

In the 10 years to 2020, extensive enhancement in defence land, air and sea capability is planned, with Defence materiel expenditure expected to be over $210 billion at current prices.27 Growth in the shipbuilding sector alone will be significant. The Abbott Government has committed to ensuring that any work on the replacement of the existing Collins class submarines fleet will centre around the South Australian shipyards.28

Historically, around 53 per cent of acquisitions have been sourced from Australian industry.29 If this trend continues into the future, it would imply domestic defence materiel supply outlays of around $10 billion a year, a rise of more than 40 per cent compared to projected annual outlays for 2013–14. In turn this would indicate an increase in the defence materiel supply industries workforce in the absence of any offsetting productivity gains. The Defence Materiel Organisation has estimated that over five jobs are created in the defence materiel supply industries per million dollars of expenditure.30 As a first estimate, growth of this nature (potentially $4 billion a year) could result in a need for around 20,000 additional employees over the life of these projects.

AWPA’s 2012 report, Building Australia’s defence supply capabilities—main report for the Defence Industry Workforce Strategy, identified a number of challenges impeding the defence industry’s capacity to access the skills required to compete for defence sustainment and acquisition contracts, including:

a restricted labour pool due to a requirement for high-level security clearances in some sections of the defence materiel industries that precludes suppliers from accessing skills supply from Australia’s skilled migration programs. This also results in a significant number of international students not being eligible to be employed by defence companies

existing weaknesses in skills supply in some trades, including electronics, electrical, and structural steel and welding

strong competition for skilled workers from the resources sector and for large infrastructure projects such as the National Broadband Network.31

In addition, the Defence Materiel Organisation’s Global Supply Chain program which was launched in 2009 establishes agreements with large multinational defence companies to enable access to opportunities for Australian industry to directly supply each company and participate in the supply chain of key sub-suppliers. Currently there are seven multinational companies in the program including Boeing Company and BAE Systems.32

In this context, despite a projected continued decline in manufacturing employment, defence materiel manufacturing is a sector where additional manufacturing workers will be required en masse. In addition, the movement of manufacturing workers into defence materiel–related work will provide broader benefits such as the diffusion of technology, specialised knowledge and higher level skills to the wider manufacturing industry.

27 Department of Defence, 2011, Defence capability plan 2011, p. 9.28 The Coalition, 2013, The Coalition’s policy for stronger defence, p. 4,

www.defence.gov.au/whitepaper2013/docs/WP_2013_web.pdf, accessed 4 July 2013.29 Parliament of Australia, 2010, Supplementary budget estimates hearing: questions taken on notice,

Department of Defence response to question W3, http://www.aph.gov.au/senate/ committee/fadt_ctte/estimates/sup_1011/def/Ans_QoN_DEF_02_Oct10.pdf, accessed 4 July 2013.

30 www.awpa.gov.au/publications/documents/Defence-Industry-Workforce-Strategy-Background-Paper-January-2012.pdf, p. 24.

31 Ibid.32 Defence Materiel Organisation, Global Supply Chain program,

http://www.defence.gov.au/dmo/id/gsc/index.cfm, accessed 29 July 2013.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 13

http://www.defence.gov.au/dmo/id/gsc/index.cfm

http://www.awpa.gov.au/publications/documents/Defence-Industry-Workforce-Strategy-Background-Paper-January-2012.pdf

http://www.awpa.gov.au/publications/documents/Defence-Industry-Workforce-Strategy-Background-Paper-January-2012.pdf

http://www.aph.gov.au/senate/

http://www.defence.gov.au/whitepaper2013/docs/WP_2013_web.pdf

Food manufacturingAustralia’s food and beverage processing industry accounts for 21.2 per cent of total manufacturing industry value-added,33 or $22.5 billion. The industry also contributes greatly to Australia’s export income, with exports valued at $18.2 billion in 2012 (representing 7.3 per cent of total merchandise trade).34

In 2012, the food and beverage processing sector employed approximately 220,700 Australians. Over the past decade, employment has increased in the sector relative to other parts of manufacturing, making it the largest-employing manufacturing sector.35

The Smarter manufacturing for a smarter Australia report identified food manufacturing as an area for potential growth.36 Similarly, theAustralia in the Asian century white paper outlined a vision for a more globally competitive and innovative Australian agriculture and food processing sector, noting that opportunities to deliver high value-added products focused on customer demands in Asia are likely to expand in the future. It also noted that capitalising on these opportunities will require a highly skilled workforce.37

Stakeholders have suggested that there is a significant gap between the business and supply chain capability in several sectors, and that this gap will be need to be addressed if the industry is to compete effectively in these emerging markets.

Given this, AWPA is conducting a study of the food and beverage workforce (covering agricultural production and food and beverage processing) to examine the skills and labour issues in the food industry, and existing workforce development initiatives. The final report, due in late 2013, will make recommendations to government and industry aimed at ensuring that the growth potential of the sector is maximised.

33 Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, 2013, Performance of manufacturing March 2013, Table 1, p. 40. Figures are for 2012, chain volume measures.

34 Ibid., Table 14, p. 52.35 Food Processing Industry Strategy Group, 2012, Final report of the non-government members, p. 50.36 Prime Minister’s Manufacturing Taskforce, 2102, Report of the non-government members, Smarter

manufacturing for a smarter Australia, p. 8.37 Australian Government, 2012, Australia in the Asian century, white paper, p. 21.


3 Manufacturing workforce—present and futureIntroductionThis section examines the profile of the current manufacturing workforce as well as the changes in trends that will influence the future makeup for this sector. It also aims to present the current skills and qualifications held by manufacturing sector workers, as well as determining what the future gaps for this sector will be and the skills challenges the industry must consider now and into the future.

Where are the jobs now?

Employment by industry nowManufacturing is the fourth largest employing sector in the country. In August 2013, it employed approximately 921,400 people, accounting for 8.0 per cent of employed persons in Australia. The majority (81 per cent) of employing manufacturing businesses are small (one to 19 employees); 18 per cent are medium (20 to 199 employees) and one per cent are large (over 200 employees).38 The largest employing subsectors in manufacturing are food, beverage and tobacco (24.1 per cent); machinery and equipment (12.8 per cent); primary metal and metal products (8.2 per cent); and transport equipment (8.6 per cent).

Figure 1 Employment in manufacturing by subsector, 2002–03 and 2012–13

Petroleum and Coal Product

Pulp, Paper and Converted Paper Product

Polymer Product and Rubber Product

Beverage and Tobacco Product

Non-Metallic Mineral Product

Textile, Leather, Clothing and Footwear

Wood Product

Printing (including Recorded Media)

Basic Chemical and Chemical Product

Furniture and Other

Fabricated Metal Product

Primary Metal and Metal Product

Transport Equipment

Machinery and Equipment

Food Product

0 25 50 75 100 125 150 175 200

2012-13 2002-03 Employment ('000)

Source: ABS, 2013, Labour force, Australia, detailed, quarterly, cat. no. 6291.0.55.003.

38 ABS, 2013, Counts of Australian businesses, cat. no. 8165.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 15

Employment in the sector as a whole has declined by 11.3 per cent over the last 10 years and has declined in most subsectors. The largest employing subsector (food, beverage and tobacco) has experienced the strongest growth over the past decade. Employment in primary metal and metal product manufacturing has also grown. The Smarter manufacturing for a smarter Australia report highlighted that these are areas where Australian manufacturing should continue to benefit from access to high-quality research and efficient processing.39

Employment by industry in the futureMedium term employment projections (from November 2012 to November 2017) show a slight increase in employment in the manufacturing sector, with an average annual growth rate of 0.3 per cent over the five-year period.40 In keeping with past trends, food product manufacturing, beverage and tobacco product manufacturing and primary metal and metal product manufacturing are expected to continue to exhibit positive growth over the medium term.

Figure 2 Average annual projected employment growth to November 2017, by manufacturing subsector (%)

Textile, leather, clothing & footwear

Petroleum & coal product

Furniture & other

Non-metallic mineral product

Polymer product & rubber product

Basic chemical & chemical product

Fabricated metal product

Machinery & equipment

Transport equipment

Pulp, paper & converted paper product

Wood product

Primary metal & metal product

Food product

Beverage and tobacco product

Printing (inc reproduction of recorded media)

-3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0

-2.5

-2.3

-1.7

-1.2

-1.0

-0.7

-0.7

-0.1

-0.1

0.0

0.2

0.2

0.2

0.8

0.9

per cent

Source: DEEWR, 2013, Industry employment projections 2013, http://lmip.gov.au/default.aspx?LMIP/EmploymentProjections, accessed 31 July 2013.

Despite an overall increase projected in the manufacturing workforce up until 2017, the sector’s proportion of national employment will decline. Average annual employment growth of 1.4 per cent is predicted for all industries, which is substantially higher than the 0.3 per cent increase expected for the manufacturing sector.41

39 Prime Minister’s Manufacturing Taskforce, 2012, Report of the non-government members, Smarter manufacturing for a smarter Australia, p. 16.

40 Department of Education, Employment and Workplace Relations, 2013, Industry employment projections 2013.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 16

http://lmip.gov.au/default.aspx?LMIP/EmploymentProjections

With a view to avoiding skills shortages, improving productivity and enhancing participation, AWPA has developed a suite of scenarios for Australia to 2025 as a basis for modelling Australia’s workforce needs and developing policy to help meet those needs. The four scenarios—Long Boom, Smart Recovery, Terms of Trade Shock and Ring of Fire—outline possible, plausible futures for Australia that help plan for an uncertain world. Economic modelling against each of these four scenarios was undertaken by Deloitte Access Economics (DAE) to determine the skills demand for the economy into the future.

These scenarios are useful to explore possible long-term employment levels in the sector. They project that the future of the manufacturing industry to 2025 will involve further declines in most subsectors. Deloitte Access Economics scenarios project declines by 1.0–1.5 per cent within the three most plausible scenarios,42 with only beverage and tobacco manufacturing and primary metal and metal product manufacturing showing positive growth in all scenarios. The projected overall decline within manufacturing is largely attributed to the more competitive international trade environment envisaged under these future worlds, along with higher terms of trade, the pressures of structural adjustment and increased supply from other countries presenting challenges for the future. These projections suggest that, while the manufacturing sector will still be a major employer, its contribution to total employment will decline in the long term.

41 DEEWR, 2013, Industry employment projections 2013 report, Canberra, available at http://lmip.gov.au/default.aspx?LMIP/Publications/IndustryEmploymentProjections. The DEEWR projections include unusually high growth (3.6 per cent per annum) for the industry category ‘Manufacturing, nfd’ (not further defined). The ABS has advised AWPA that this category relates to ambiguous answers to survey questions where a response is not easily identifiable to a particular subsector or overlaps multiple subsectors. Therefore the magnitude of this category fluctuates based on the quality of answers recorded and can vary each quarter.

42 AWPA has taken the view that the Ring of Fire scenario is a relative outlier in terms of workforce and qualifications outcomes for Australia in the future and should not be considered as a focus of analysis and planning. Figures for this scenario have still been provided for completeness.


http://lmip.gov.au/default.aspx?LMIP/Publications/IndustryEmploymentProjections

Table 1 DAE scenarios, projected average annual employment growth by manufacturing subsector, 2011–2025 (% p.a.)

IndustryLong Boom

Smart Recovery

Terms of Trade Shock

Ring of Fire

Manufacturing –1.5 –1.3 –1.0 0.6

Food product –2.3 -2.1 –1.7 –0.1

Beverage and tobacco product 2.6 2.8 3.2 4.9

Textile, leather, clothing and footwear –6.5 –5.9 –5.3 –2.9

Wood product –2.6 –2.2 –1.6 0.9

Pulp, paper and converted paper product –8.7 –8.4 –7.8 –5.4

Printing (including reproduction of recorded media) –3.1 –3.0 –1.8 –0.4

Petroleum and coal product –0.7 –0.5 0.2 2.3

Basic chemical and chemical product –0.9 –0.7 0.0 2.1

Polymer product and rubber product –5.8 –5.6 –4.9 –2.9

Non-metallic mineral product –0.6 –0.5 –0.8 0.7

Primary metal and metal product 2.5 2.5 2.6 3.6

Fabricated metal product –3.8 –3.8 –3.7 –2.8

Transport equipment –3.6 –3.5 –3.6 –1.8

Machinery and equipment –0.2 –0.1 –0.1 1.7

Furniture and other –1.8 –1.2 –0.6 2.0

All industries 2.0 1.5 1.6 0.7

Source: Deloitte Access Economics, 2012, Economic modelling of skills demand and supply, scenario output—detailed employment results.

Key occupations nowThe manufacturing sector workforce comprises a broad range of occupational groupings as well as great variations in skill levels. The occupations mostly engaged in transformative processes (technicians and trades workers, and machinery operators and drivers) account for 41 per cent of the workforce, as depicted in Figure 3.


Figure 3 Employment in manufacturing by occupational classification, May 2013

15%

10%

28%

1%

10%

5%

13%

18% Managers

Professionals

Technicians and trades workers

Community and personal service workers

Clerical and administrative workers

Sales workers

Machinery operators and drivers

Labourers

Source: ABS, 2013, Labour force, Australia, cat. no. 6291.0.55.003. Note: There are perceived shortcomings of the ANZSCO classification system in identifying new and developing occupations and identifying changing skill levels for existing occupations.

Key occupations in the futureMedium term projections forecast marginal growth for most of the top 20 employing occupations. Managerial occupations are projected to show strong growth until 2017–18, with a 3.2 per cent rise forecast for advertising and sales managers and a 2.3 per cent rise for office managers.43 Meat, poultry and seafood process workers show the greatest decline in employment (1.3 per cent), followed by manufacturers (-0.7 per cent) and metal fitters and machinists (0.6 per cent).

For the long term, key occupations are projected by AWPA to decline for many of the labourer classified occupations (product assemblers, food and drink factory workers) in the years to 2025. Employment levels are not projected to grow in many of the top 10 manufacturing occupations. Occupations with the strongest projected growth include production managers, bakers and pastry cooks, and sales assistants.

43 DEEWR, 2013, Industry employment projections 2013, http://lmip.gov.au/default.aspx?LMIP/EmploymentProjections, accessed 31 July 2013.


Table 2 DAE scenarios, projected average annual growth rate for top 10 manufacturing occupations, 2011–25 (% p.a.)

IndustryLong Boom

Smart Recovery

Terms of Trade Shock

Ring of Fire

Structural steel and welding trades workers 0.2 –0.1 –0.3 –0.1

Metal fitters and machinists 1.0 0.7 0.5 0.1

Production managers 2.0 1.7 1.7 1.8

Packers –0.1 –0.5 –0.3 –0.3

Product assemblers –2.4 –2.6 –2.5 –1.6

Food and drink factory workers –0.5 –0.7 –0.5 0.2

Forklift drivers 0.8 0.5 0.4 0.1

Sales assistants (general) 1.1 0.7 0.7 0.2

Cabinetmakers –2.6 –2.7 –2.7 –1.6

Bakers and pastry cooks 1.3 1.1 1.2 1.4

All occupations 2.0 1.5 1.6 0.7

Source: Deloitte Access Economics, 2012, Economic modelling of skills demand and supply, scenario output—detailed employment results.

Who works in these jobs?

Age profileA significant number of manufacturing workers are approaching retirement age. This can create great challenges for succession planning and retention. The proportion of the manufacturing workforce aged 45 and over increased from 34.8 per cent to 40.9 per cent between 2002 and 2012.44 This is a larger increase than in the overall workforce, which increased from 34.0 per cent to 38.7 per cent in the same 10-year period. MSA states that to ensure knowledge retention and transfer, older workers need to be encouraged to stay in the workforce longer and become skilled in training and mentoring.45

The ageing population will undoubtedly have implications for the future size and skill profile of the workforce. Some subsectors will have higher skill requirements, while for other sectors new technologies are replacing or decreasing the skills required for traditional job roles. Both scenarios could have implications for mature-aged workers: some will need to up-skill, while others may need to retrain entirely for a change of role if they are to continue working. The ageing workforce may present challenges for the adoption of new technologies, as some workers in older age groups may find the rapidly changing workplace processes and practices more difficult to learn and adopt. Products of the

44 ABS, 2013, Labour force, detailed, quarterly, cat. no. 6291.0.55.003.45 Manufacturing Skills Australia, 2013, Environmental scan: a new era for manufacturing.


future will need to be designed so that older, less technically savvy people find them easy to use.46 However, the nature of future manufacturing may also allow more mature-aged workers to work for longer, as many of the physical and labour-intensive positions are replaced with automated processes.


What strategies do businesses use to engage and retain older workers?

Women The manufacturing workforce has a lower proportion of female workers (25.5 per cent) than the total workforce (45.7 per cent). This is the third lowest proportion of all industries, behind construction and mining. Trends suggest that future manufacturing workers will continue to be predominantly male. The percentage of female workers in manufacturing dropped 1.5 per cent between 2000 and 2012, while the overall percentage of women in the workforce rose 1.6 per cent. However, female representation varies considerably between the subsectors, from a low of around 12 per cent in primary metal manufacturing to over 50 per cent in textile and clothing manufacturing.47

Workplace culture and infrastructure within manufacturing present barriers to increasing female representation within the sector. Manufacturing workplaces often do not provide workplace facilities and uniforms that are inclusive of women, further hindering potential female workers from entering the sector.48 Another contributing factor to the underrepresentation of women working in manufacturing businesses could be the high level of full-time employment (85.7 per cent) compared to all industries (70.4 per cent), which is second only to mining. Offering more flexible working arrangements could attract more female workers, particularly if they are balancing work and family responsibilities. Programs specifically targeted at female participation may also be beneficial in conjunction with more flexible working arrangements.


What strategies are being used to attract and retain women in manufacturing?

What skills do we have now?In order to remain globally competitive, the Australian manufacturing industry needs to focus on innovation, efficiency and productivity. Innovation through the development of a skilled workforce can provide a competitive advantage for Australian manufacturing; therefore investment in skills must be a key priority for the coming decade.

The Australian Business Foundation has called for manufacturing enterprises to urgently invest in the new skills needed for high-performance workplaces. It believes that a deepening and expanding of skills and capabilities across management and the workforce is essential to innovative manufacturing. Industries that harness and deploy creativity and tacit knowledge best will generate new sources of competitive advantage and productivity. This covers not only expertise in high-level technical, scientific

46 Future Manufacturing Industry Innovation Council, 2011, Trends in manufacturing to 2020.47 Manufacturing Skills Australia, 2012, MSA background research—women in the manufacturing industry, pp .1–

2, http://www.mskills.com.au/DownloadManager/downloads/Women%20in%20the%20Manufacturing%20Industry.pdf, accessed 2 August, 2013.

48 Australian Human Rights Commission, 2013, Women in male-dominated industries: toolkit of strategies, p. 9.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 21

http://www.mskills.com.au/DownloadManager/downloads/Women%20in%20the%20Manufacturing%20Industry.pdf

http://www.mskills.com.au/DownloadManager/downloads/Women%20in%20the%20Manufacturing%20Industry.pdf

and engineering disciplines and in new and emerging technologies, but also the ability to build the intangible assets that are increasingly important to competitiveness and sustainability.49

Qualification profileA large proportion (45.2 per cent) of the manufacturing industry workforce does not have any post-school qualifications. This is particularly significant as it has been claimed that 87 per cent of available jobs in the industry require a post-school qualification.50 University qualifications are substantially lower than the national average, at 14.5 per cent of the manufacturing workforce compared to 27.2 per cent for all industries.

The proportion of workers with post-school qualifications varies greatly between different occupational groups. For example, ABS data indicate that five of the top 20 employing occupations in manufacturing (structural steel and welding trades workers; metal fitters and machinists; bakers and pastry cooks; cabinetmakers; and electricians) the proportion of workers with post-school qualifications ranges from 55 to 85 per cent. By contrast, in another four of the 20 occupations (packers; food and drink factory workers; product assembly workers; and meat, poultry and seafood workers) the proportion is markedly lower, ranging from 25 to 65 per cent.51

A concerted effort will need to be made in the manufacturing sector to raise the base educational standards of its workforce in order to improve productivity and innovation in an increasingly knowledge-based and technologically integrated industry. Raising the overall education profile will greatly benefit overall productivity. Studies have indicated that an increase in the average level of education by one year would result in a 3 per cent to 15 per cent growth in GDP per capita.52

Figure 4 Highest qualification achieved by workers in the manufacturing industry (%)

14.5

7.9

29.8

2.7

45.2

27.2

10.5

20.3

3.2

38.7

0 10 20 30 40 50 60

Bachelor Degree or Higher

Advanced Diploma/Diploma

Certificate III/IV

Other Certificate

No Post-School Qualifications

Manufacturing All industries

Note: Excludes ‘Level of education not stated’ from total. Source: DEEWR, 2012, Australian Jobs 2012 (ABS 2011 Census data).

49 Australian Business Foundation, 2011, Manufacturing futures, p. 7.50 Industry Skill Councils, 2013, No more excuses: an industry response to the language, literacy and numeracy

challenge, p. 39.51 ABS, 2011, Census of Population and Housing; ABS labour force survey custom request. The data covers the

entirety of the Australian workforce, not just manufacturing.52 AWPA, 2013, Human capital and productivity, p. 4.


There are concerns within the industry that those workers with Certificates I–II as their highest qualifications may no longer be adequate for key occupations as minimum entry requirements move towards Certificate III–IV level qualifications. Statistical data suggests that this transition is already underway, as there is a significant increase in the proportion of manufacturing sector workers with a Certificate III/IV as their highest qualification (20.9 per cent), compared to those with a lower Certificate qualification (2.7 per cent). There is also evidence showing a strong association between educational attainment and achieved literacy levels. ABS figures show that people who had completed a greater number of years of formal education achieved higher language, literacy and numeracy scores.53

Vocational education and trainingTraditionally, skills for many manufacturing aligned occupations have been gained through trade and technical qualifications delivered by the vocational education and training (VET) sector. MSA notes that while the trades play an important role in the manufacturing industry, most trade workers are not employed in manufacturing goods, but rather in support role such as machinery commissioning, servicing and maintenance.

TAFE remains the major provider of off-the-job training for apprenticeships. Table 3 shows the number of VET completions of MSA courses from 2007 to 2011. Overall, the data show the number of completed Certificate I–II level qualifications are considerably lower than for those in Certificate III and higher. Qualification achievement is trending towards higher qualification levels, with the greatest numerical increases in Certificates III and IV.54

Table 3 VET qualifications completed by AQF55 level in manufacturing, 2007–11, numbers of graduates

AQF qualification level 2007 2008 2009 2010 2011

Average annual

growth (%)

Advanced diploma 62 215 314 415 560 73.4

Diploma 910 1,020 1,287 1,651 2,022 22.1

Certificate IV 2,403 2,295 2,554 3,712 5,247 21.6

Certificate III 8,166 10,300 11,775 11,696 12,323 10.8

Certificate II 2,932 2,504 2,693 3,136 3,612 5.4

Certificate I 1,157 1,293 1,482 965 1,048 –2.4

Total 15,630 17,627 20,105 21,583 24,812 12.2

Source: NCVER, 2013, Students and courses data by Industry Skills Council (Manufacturing), table 2, http://www.ncver.edu.au/resources/vsi/vsi_table_list.html?

53 ABS, 2013, Programme for the International Assessment of Adult Competencies, Australia, 2011–12, cat. no. 4228.0, ABS, Canberra, www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4228.0Explanatory%20Notes12011-12?OpenDocument, accessed 16 October 2013.

54 NCVER, 2013, Australian vocational education and training statistics: students and courses 2012, p. 14–15. http://www.ncver.edu.au/publications/2642.html, accessed 31 July 2013.

55 The AQF (Australian Qualifications Framework) is a nationally consistent framework of credentials offered in post-compulsory education and training that covers qualifications from Certificate I through to a doctoral degree. For more details on the AQF, go to www.aqf.edu.au.


http://www.ncver.edu.au/resources/vsi/vsi_table_list.html?filter_2_1=9&class_type_id=2&class_type_name=Industry+Skills+Council&ANZSCO_search=ANZSCO_search&proceed=false&classification_name=Industry+Skills+Council

http://www.ncver.edu.au/publications/2642.html

filter_2_1=9&class_type_id=2&class_type_name=Industry+Skills+Council&ANZSCO_search=ANZSCO_search&proceed=false&classification_name=Industry+Skills+Council, accessed 1 August 2013.

VET completion rates for the Manufacturing Training Package have remained at around 25 per cent over the last four years (2008–11), which is comparable to other Industry Skills Council figures.56 Completion rates for apprenticeships, however, were 57.3 per cent in 2011 for trade occupations and 54.4 per cent for non-trade occupations.57

Completion rates differ for apprentices and trainees in particular occupations, as highlighted in Table 4. The highest completion rates are in engineering, ICT and science technicians (58.6 per cent) and printing trades workers (57 per cent) and are relatively low for food trades workers (30.4 per cent) and wood trades workers (38.9 per cent).

Table 4 Contract completion rates (%), technicians and trade workers, for contracts commencing in 2008

Occupation (ANZSCO) group Completion rate (%)

Engineering, ICT and science technicians 58.6

Automotive and engineering trades workers 50.1

Construction trades workers 42.5

Electrotechnology and telecommunications trades workers 54.1

Food trades workers 30.4

Other technicians and trades workers 44.6

Printing trades workers 57.0

Textile, clothing and footwear trades workers 47.8

Wood trades workers 38.9

Miscellaneous technicians and trades workers 61.4

Source: NCVER, 2012, Completion and attrition rates for apprentices and trainees, Table 1, p. 7.

MSA has raised concerns that ‘if the TAFE system is to continue to play a major role in the development of skills for the Australia economy, the apprenticeship completion rates need to be improved.’58 Ai Group also calls for apprenticeship completion rates to increase. It also noted the importance of apprenticeships in providing work-based competencies and has cited concerns about registered training organisations pushing to progress or complete apprentices according to their progress off the job, regardless of their progress at work.59

56 NCVER, 2013, Australian vocational education and training statistics: students and courses 2012, p. 14–15, http://www.ncver.edu.au/publications/2642.html, accessed 31 July 2013.

57 NCVER, 2012, Australian vocational education and training statistics: apprentices and trainees 2011—annual, p. 1, http://www.voced.edu.au/content/ngv52447, accessed 31 July 2013.

58 MSA, 2013, MSA submission to the House of Representatives inquiry into TAFE system, p. 5.59 Ai Group, 2013, Apprenticeships: achieving excellence, p. 6–7.


http://www.voced.edu.au/content/ngv52447

http://www.ncver.edu.au/publications/2642.html



TAFEs are the primary providers of training for MSA qualifications, accounting for 75 per cent of enrolments in 2012. Enrolments in privately operated providers have increased from 7 per cent of all MSA courses in 2007 to 25 per cent in 2012. This is a trend across other Industry Skills Councils training packages over the same period.

Table 5 Proportion of students enrolled in Manufacturing Skills Australia and all Industry Skills Councils courses, by type of provider (%), 2007–12

2007 2008 2009 2010 2011 2012

Private (MSA training packages) 7 8 9 13 21 25

Private (all ISC training packages) 8 8 10 13 19 21

Public (MSA training packages) 93 92 91 87 79 75

Public (all ISC training packages) 92 92 90 87 81 79

Source: NCVER VOCSTATS, Students and courses, course enrolments 2002 to 2012.

Table 6 Proportion of qualification completions in Manufacturing Skills Australia and all Industry Skills Councils courses, by type of provider (%), 2007–11

2007 2008 2009 2010 2011

Private (MSA training packages) 8 7 8 13 22

Private (All ISC training packages) 12 13 15 21 29

Public (MSA training packages) 92 93 92 87 78

Public (All ISC training packages) 88 87 85 79 71

Source: NCVER VOCSTATS, Students and courses, qualifications completed 2002 to 2011.

Higher educationUniversities have historically been a minor source of skilled employees for the manufacturing industry. Currently 15 per cent of workers in the top 20 employing occupations hold a qualification at the bachelor level and above, and in many of the highest employing occupations, university-educated workers are almost non-existent.60

However, as work activities change in manufacturing, university-level skills and competencies are becoming the requisite level for many occupations in manufacturing. The Deloitte Access Economics modelling for AWPA projects increases in qualifications at bachelor and above level for all manufacturing sector occupations except labourers and machinery operators and drivers.61

60 ABS, 2012, Census of population and housing 2011.61 AWPA, 2013, Manufacturing snapshot, pp. 10–11.


Promoting the career opportunities available in manufacturing to those at the undergraduate and postgraduate level will be particularly important to attract skilled managers and professional into the industry.

Stakeholders have also indicated that although universities are able to deliver strong theoretical skills, emerging graduates tend to lack practical competencies. One strategy proposed by Ai Group to address this concern is to develop a ‘pathway back into VET’ after a person has graduated from university.62 Coupling the practical, work-related VET skills with the theoretical skills the university system provides should help graduates to be more quickly utilised in the workforce.

Unrecognised skillsMany of the skills manufacturing workers possess are not formally recognised or do not make up a formal qualification. This is particularly the case for those positions deemed ‘unskilled’ or ‘low skilled’. The cause of this lack of recognition lies in traditional notions of what a ‘skill’ entails, and how these skills are therefore accredited. A study of Toyota production lines found that many of the workplace processes in these roles used skills outside conventional recognition. The study found that many of the unrecognised skills are ‘real, learned capabilities for awareness, coordination, and interaction—not “competencies of compliance”, although they are frequently “invisible” in many work processes’.63 This may mean that the process of identifying skills should be revisited, as there are perceived gaps in what formal skills recognition is currently covering.

Questions for discussion

Are education and training providers currently producing graduates with the skills and competencies required by the manufacturing industry today and into the future? If not, what are the skills gaps?

What is currently working or is a best practice example of work-integrated learning in higher education?

How important is the use of short course targeted training and non-accredited training in your sector?

What challenges do we need to address—now and in the future?Regardless of what eventuates in the future, there are a number of skills challenges already affecting the existing manufacturing workforce. There are also a number of anticipated future challenges that must be addressed now to help ensure that the industry is equipped to capitalise on growth opportunities and effectively manage structural adjustment.

Language, literacy and numeracyLanguage, literacy and numeracy (LLN) skills are major components of human capital. MSA estimates that almost 50 per cent of workers in the manufacturing industry have LLN skills below required functional level, which places the sector below the national average.64

LLN skills across the economy tend to be lower among older age groups. Results from the Program for International Assessment of Adult Competencies Survey (PIAAC) show that proportions of people at level 1 (the lowest level) are higher among the oldest age groups (people aged 60 years and older) 62 Ai Group, 2012, A more competitive manufacturing industry, p. 130.63 Weerasombat, T and Hampson, I, 2012, ‘Skills and control in the Toyota production system: the case of Toyota

Mot Thailand (TMT)’, report prepared for the International Labour Process Conference, p. 15.64 Manufacturing Skills Australia, 2012, Response to future focus discussion paper, p. 3.


than in the younger age groups (people aged 15 to 29 years) for both literacy and numeracy skills.65 Level 3 is regarded by the survey developers as ‘the minimum required for individuals to meet the complex demands of everyday life and work in the emerging knowledge-based economy’ for literacy and numeracy, and Level 2 and above for problem solving in technology-rich environments.66 Given the high number of older workers in the manufacturing industry, the concerns expressed by industry about the current workforce’s LLN skills are not unexpected.

The link between age and low LLN skills is demonstrated in Figure 5. As this figure shows, the proportion of workers with LLN skills of level 3 and above tends to be highest in the 25–34 cohort. The proportion of the workforce with low LLN skills increases from around age 45.

Figure 5 LLN skills of adults at level 3 and above, by skill and age group (per cent)

15–19 20–24 25–34 35–44 45–54 55–640

10

20

30

40

50

60

70

Literacy

Numeracy

Problem Solving in Technology-rich Environments

Source: ABS, 2006, Adult Literacy and Life Skills Survey, summary results.

The LLN skill levels of the manufacturing workforce have implications for training. Insufficient LLN skills may affect the ability of workers to receive benefits from education and training.67A recent NCVER report that examined three manufacturing companies found that improving the LLN levels of workers was not considered a means for improving productivity in these companies or a barrier to how employees worked in their existing jobs.68 However, these findings may be the effect of the companies using ‘work-arounds’ in the production processes and the use of computing to overcome the low levels of literacy. Further, the extent to which LLN skills levels limited the firms’ capacity to adjust to future changes and innovate were not explored in the study.

65 ABS, 2013, Programme for the International Assessment of Adult Competencies, Australia, 2011–12, cat. no. 4228.0, ABS, Canberra, www.abs.gov.au/ausstats/[email protected]/ Lookup/4228.0main+features992011-2012, accessed 16 October 2013.

66 ABS, 2013, Programme for the International Assessment of Adult Competencies, Australia, 2011–12, cat. no. 4228.0, ABS, Canberra, www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4228.0Explanatory%20Notes12011-12?OpenDocument, accessed 16 October 2013.

67 Industry Skills Councils, 2013, No more excuses: an industry response to the LLN problem, p. 1.68 Black, S, Brown, T, and Yasukawa, K, 2013, Investigating the ‘crisis’: production workers’ literacy and

numeracy practices, NCVER, Australia, p. 3.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 27

The uses of pre-training reviews of LLN skills by registered training organisations have been beneficial in lessening the impact of low LLN on training objectives.69 It is important to note that initial assessments can be intimidating and so steps should be taken to ensure that pre-training reviews are not viewed as ‘screening people out’, but instead as identifying areas where additional support is required.

Another significant LLN issue for manufacturing businesses is the low level of problem-solving skills held by the existing and potential future workforce. The 2013 PIAAC study found that only 22.5 per cent of workers have problem solving in technology-rich environments competencies at an adequate level to properly function in the workplace, well below the national average of 34.2 per cent for all industries.70 Initial industry consultations highlight that a marked improvement in the LLN levels of the manufacturing workforce may be required to encourage and promote innovation.

To address these challenges, MSA proposes that the VET system use the 2012 Australian Core Skills Framework and the Foundation Skills Training Package (2013) to address these issues for learners in need.71 MSA has also recommended that the VET workforce undergo up-skilling so that they are able to provide the appropriate training to meet the increasing need for high-level LLN skills in the manufacturing industry.72A recent NCVER report into the skills of the LLN and VET workforces in delivering numeracy training found that there was a mismatch between what is required to address numeracy skills and the current capacity of VET practitioners in terms of their understanding of numeracy requirements and their qualifications, skills and experience.73

There is evidence to suggest that higher education may have a substantial part to play in addressing Australia’s LLN requirements. The PIAAC Survey identified a sharp increase in the proportion of persons at level 3 or above for those holding a bachelor degree or above.74The strong correlation between LLN and formal qualifications suggests that the LLN skill levels in the manufacturing workforce are likely to rise if the qualification base of the manufacturing industry is lifted. The extent to which this may impact the overall LLN levels of the industry will vary depending on the proportion of the future workforce drawn from tertiary institutions.

In addition, as noted above, the PIAAC results show that younger people tend to have higher LLN skills than those in the age group approaching retirement. As such, as the proportion of younger workers in the manufacturing sector increases it is anticipated the LLN skills levels of the industry will increase.75 However, effective strategies to address LLN in the manufacturing industry are still needed to ensure all workers can contribute to their full potential and up-skill as required.


What kinds of strategies or initiatives are effective in addressing the LLN skills development needs of the manufacturing workforce?

69 AWPA, 2013, Future focus, 2013 national workforce development strategy, pp. 95–96, http://www.awpa.gov.au/our-work/national-workforce-development-strategy/2013-workforce-development-strategy/Documents/FutureFocus2013NWDS.pdf, accessed 26 July 2013.

70 ABS, 2013, Programme for the International Assessment of Adult Competencies, Australia, 2011–12, cat. no. 4228.0, ABS, Canberra,www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4228.0Explanatory%20Notes12011-12?OpenDocument, accessed 16 October 2013

71 Manufacturing Skills Australia, 2013, Environmental scan: a new era for manufacturing, p. 19.72 Manufacturing Skills Australia, 2012, Response to future focus discussion paper, p. 11.73 Berghella, T and Molenaar, J, 2013, Seeking the L in LLN, NCVER, Australia, p. 8.74 ABS, 2006, Adult Literacy and Life Skills Survey, summary results, p. 32–4.75 ABS, 2013, Programme for the International Assessment of Adult Competencies, Australia, 2011–12,

cat. no. 4228.0, ABS, Canberra,www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4228.0Explanatory%20Notes12011-12?OpenDocument, Table 2, accessed 16 October 2013


Displaced workers and workers at risk of displacementThe manufacturing industry has been undergoing structural adjustment for many years with employment over the last decade declining steadily in the majority of its subsectors.76

The overall employment figures are expected to continue to decline. This means that a significant portion of workers have needed to look for new employment opportunities, both in and outside the manufacturing industry.

Lower-skilled workers, particularly those with low LLN skills, are most at risk of becoming long-term unemployed as a result of structural adjustment. Skills development is vital to finding new employment for these workers.77 Currently, under the National Partnership Agreement on Skills Reform all states and territories committed to provide all working-age Australians (up to 65 years of age) access to a government-subsidised training place to a minimum of the first Certificate III qualification.78 People with a Certificate III or higher level qualification who want to up-skill or reskill often need to fund their own training. However, there is a range of government programs that provide additional support to enable workers affected by structural adjustment the opportunity to up-skill or reskill.

While small-scale redundancies are common across the economy, post-redundancy packages for manufacturing workers made redundant through structural adjustment can be complex because they often involve large groups being retrenched simultaneously in smaller labour markets. Industry also has a role to play in ensuring that workers are supported to undertake lifelong learning so they are adaptable and remain employable despite the changing work environment.

It is important to acknowledge that it may take some time for people to regain employment. Industry assistance packages should consider intervening before redundancies occur because intervention gives employees time to fully consider their options and better plan for the future.

Longer assistance programs are also more likely to deliver a structured approach to services provision that delivers better outcomes for all stakeholders.79

The provision of employment services through Job Services Australia is pivotal to managing structural adjustment to industry. Strategies to provide a pathway into training and employment are also needed. This includes providing career development advice, based on a strong understanding of what skills are transferable to which industry, and what gaps exist, to encourage people to think more broadly about their options. Recognition of prior learning processes must also be effective and assist people to identify and formalise their existing skills.

In the case of the Bridgestone Australia closure in 2009, the South Australian Government developed a two-stage skills recognition project to provide skills assessment services to workers. The first stage sought to identify the skills workers had gained on the job. The second aimed to formally recognise those skills by awarding qualifications through recognition of prior learning process. Bridgestone Australia supported this process by providing relevant information such as competency statements, skills matrices and letters of verification from managers.

76 Prime Minister’s Manufacturing Taskforce, 2012, Report of the non-government members, p. 16.77 Manufacturing Skills Australia, 2012, Foundation skills strategic framework, p. 9.78 Council of Australian Governments, 2012, National Partnership Agreement on Skills Reform, p. 23,

www.federalfinancialrelations.gov.au/content/national_partnership_agreements/Other/COAG/Skills%20Reform.pdf.

79 Loxton, E, Schirmer, J, and Dare, M, 2011, Technical report 208: structural adjustment assistance in the Australian forest industry—a review of recent experience and recommendations for best practice design of future structural adjustment packages, Cooperative Research Centre for Forestry, p. 47, www.crcforestry.com.au/publications/downloads/TR208-compiled-for-online.pdf, accessed 7 November 2012.



What employment and training strategies are effective to help displaced workers or at-risk workers to transition to new employment?

Transferability of skillsDuring initial consultations, stakeholders raised concerns that skills of manufacturing workers may not be easily identified as transferable, which can negatively affect the industry in a number of ways. First, the mass closures in areas such as the automotive industry leave government and industry in the difficult position of attempting to ensure employment opportunities for a large number of displaced workers. In the fallout of such closures, the costs associated with reskilling displaced workers causes further economic strain to those involved. Providing workers with the capacity to identify how their skills may be more universally applicable would assist in alleviating that strain, and provide a wider range of career pathways within manufacturing and other industries for those moving on.

Even for workers who are not displaced, ensuring the breadth and universality of skills is important. As the speed at which new technologies are adopted increases, workers will need to acquire a broader range of skills, undertake multiple tasks, and learn quickly and work flexibly.80 MSA reports that ‘increasingly there are calls for cross-skilling and hybrid skills that enable an employee to work with integrated technologies, especially across mechanical, electrical, digital and sustainability skills’.81

The transferability of skills involves not only cross-industry transfer, but a transnational competence in the manufacturing sector. Many firms now have multiple working sites spanning international locations, so developing the skills transferable over these more varied supply chains will be an issue of increasing importance to manufacturing employers. Up-skilling existing employees will be important to ensure that skills remain current and adjust according to changing industry needs.


What types of continuous learning programs have been effective in teaching manufacturing workers skills that can be broadly applied across the industry and to other industries?

Replacement, attraction and retention Attracting and retaining an appropriately skilled workforce is a vital issue for the future of the manufacturing sector. While employment levels in manufacturing will decline overall in the next five to 10 years, a significant proportion of the current workforce is approaching retirement. This means there is a need to ensure that there is an adequate supply of skilled workers to meet the replacement demand. AWPA has estimated that the majority of job openings in the manufacturing sector are created more by replacement demand than by new growth under all four scenarios, with the only exception to this trend being forklift drivers.82

80 Ai Group, 2012, A more competitive manufacturing industry, p. 129.81 Manufacturing Skills Australia, 2013, 2013 Environmental scan: a new era in manufacturing, p. 11,

http://www.isc.org.au/pdf/Manufacturing%20Skills%20Australia%20Environmental%20Scan%202013.pdf, accessed 24 July 2013.

82 AWPA, 2013, Industry snapshots, manufacturing, p. 7, http://www.awpa.gov.au/our-work/national-workforce-development-strategy/2013-workforce-development-strategy/Pages/2013-Industry-Snapshots-.aspx, accessed 24 July 2013.


http://www.awpa.gov.au/our-work/national-workforce-development-strategy/2013-workforce-development-strategy/Pages/2013-Industry-Snapshots-.aspx


http://www.isc.org.au/pdf/Manufacturing%20Skills%20Australia%20Environmental%20Scan%202013.pdf

The Abbott Government indicated in its election policy that it plans to introduce a Seniors Employment Incentive to increase the participation rate of workers over the age of 50. An incentive payment worth up to $3,250 will be given to businesses who hire a mature age job seeker who has been unemployed for six months or more, registered with Centrelink and is receiving unemployment benefits. This strategy aims to improve the participation rates for mature age workers, helping to reduce the impact of replacement demand. The Seniors Employment Incentive is due to commence on 1 July 2014.83

Competition in the labour market for skilled employees and trainees is already intense, and the manufacturing sector does not offer the high wages associated with high-earning industries such as mining. Average ordinary time weekly earnings in manufacturing are $1,223, which is lower than the national all industries average of $1,396 and well below the competing mining industry ($2,361).84 This situation impacts on the manufacturing industry’s perceived desirability as a career option and puts it at a disadvantage when attempting to attract skilled workers.

In this context, retaining skilled workers, in particular older workers, will involve the industry finding new ways to keep them engaged in the workforce as long as possible. This may require offering older workers the chance to use new skills such as mentoring and possibly new employment arrangements that cater to older workers.85

The manufacturing sector has recognised that unless it can market itself as a viable and rewarding career path, it will miss recruiting new generations of capable employees. The manufacturing industry has been historically depicted as being dirty, manual work with limited career options. Coupled with the recent publicised downturn in the sector, this has created a negative image about the viability of the industry as a whole and the range of career options available in manufacturing.

As noted in section 2, the future of manufacturing will involve embracing of new technologies, and an ongoing overall shift to medium and high-skilled occupations. However, unless its image is ameliorated it is likely that workers with relevant skills will overlook manufacturing as a viable career choice. As such, the Manufacturing Leaders Group, which provides strategic advice on manufacturing to the Australian Government, has recognised the importance of the currently negative image of the manufacturing sector by establishing as its first priority ‘Improving the public perceptions of Australian manufacturing to attract and retain skilled workers and investment and to supply high-value products and services globally.’86 The Manufacturing Leaders Group endorsed the former Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education commissioning Wallis Consultancy Group to conduct research on public perceptions of manufacturing in Australia.

Science, technology, engineering and mathematics skillsThere is broad recognition by industry and governments of the need to increase science, technology, engineering and mathematics (STEM) skills at all levels, starting early in school. While school education will not be addressed in this study, it is important to acknowledge that the proportion of STEM literate secondary school students could affect the potential number of future entrants into highly skilled manufacturing occupations.

The 2011 OECD report, Over-qualified or under-skilled: a review of existing literature noted that there is increasing international demand for STEM graduates in the workforce at a time when Australia is

83 The Coalition, 2013, The Coalition’s policy to create jobs by boosting productivity, p. 15–16.84 ABS, 2013, Average weekly earnings, industry earnings 2012,

www.abs.gov.au/ausstats/[email protected]/Lookup/6302.0main+features6Nov%202012, accessed 14 June 2013.85 Manufacturing Skills Australia, 2013, 2013 Environmental scan: a new era in manufacturing, p. 11,

http://www.isc.org.au/pdf/Manufacturing%20Skills%20Australia%20Environmental%20Scan%202013.pdf, accessed 24 July 2013.

86 Manufacturing Leaders Group, 2013, http://www.innovation.gov.au/Industry/Manufacturing/LeadersGroup/Pages/default.aspx, accessed 16 July 2013.


http://www.innovation.gov.au/Industry/Manufacturing/LeadersGroup/Pages/default.aspx


http://www.abs.gov.au/ausstats/[email protected]/Lookup/6302.0main+features6Nov%202012

behind in the number of STEM graduates from tertiary institutions.87 In addition, the 2011 Trends in Mathematics and Science Study (TIMSS) indicates that Australia’s performance in mathematics and science has plateaued over the last 16 years.88

An Ai Group survey indicates that manufacturing sector employers experience difficulty recruiting employees with STEM skills. Technicians and trades workers with sufficient STEM skills were reported as difficult to recruit by 41 per cent of employers, professionals by 27 per cent and managers by 26 per cent, across many industries.89 The highest response recorded for difficulty recruiting individuals with STEM skills was for technicians and trades workers in the manufacturing industry (44 per cent of survey respondents).90

A number of manufacturing occupations, including some specialised occupations, rely heavily on STEM skills. Examples include metal casting, forging and finishing trade workers, food and wine scientists, mechanical engineers, technicians in all areas, and toolmakers and engineering patternmakers.91,92 It is likely that the importance of STEM skills in manufacturing occupations will further increase as the industry shifts to having more medium- and high-skilled occupations.

To respond to this issue, MSA is currently exploring engineering pathways at the vocational level and has committed to continue to review VET courses for manufacturing roles across the STEM skill areas.93

Digital literacyDigital literacy is defined as the ability to effectively and critically navigate, evaluate and create information using a range of digital technologies. Although this capability is not currently measured in LLN testing, people aged 55 years and over (a growing cohort for manufacturing) have been identified as being more affected by low digital literacy skills.94

As the manufacturing industry shifts to occupations increasingly integrated with technology, the ability to manage and navigate these technologies will be of greater importance. It is vital to ensure that the manufacturing workforce is able to operate effectively in this new environment and that industry is able to capitalise on the competitive advantages offered by new technologies and innovative processes. The recent Ai Group report into the digital readiness of Australian businesses identified that there were variations in investment in ICT across sectors with manufacturing more likely to invest in automation and control equipment.95

87 OECD, 2011, Over-qualified or under-skilled: a review of existing literature, OECD Social, Employment and Migration Working Paper, No 121.

88 Wernert, K, et al., 2012, Highlights from TIMSS & PIRLS 2011 from Australia’s perspective, Australian Council for Educational Research, Melbourne, http://www.acer.edu.au/documents/TIMSS-PIRLS_ Australian-Highlights.pdf, accessed 24 July 2013.

89 Ai Group, 2013, Lifting our science, technology, engineering and mathematics (STEM) skills, p. 1. 90 Ibid., p.5.91 Ibid., p.1.92 AWPA, 2013, Industry snapshots, manufacturing, p. 12,http://www.awpa.gov.au/our-work/national-workforce-

development-strategy/2013-workforce-development-strategy/Pages/2013-Industry-Snapshots-.aspx, accessed 24 July 2013.

93 Manufacturing Skills Australia, 2013, 2013 Environmental scan: a new era in manufacturing, p. 9, http://www.isc.org.au/pdf/Manufacturing%20Skills%20Australia%20Environmental%20Scan%202013.pdf, accessed 24 July 2013.

94 Innovation and Business Skills Australia, 2013, Digital literacy and e-skills: participation in the digital economy, p. iii.

95 Ai Group, 2013, Ready or not? Technology investment and productivity in Australian businesses, p. 11, http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Publications/Reports/2013/tech%2520investment%2520report%2520FINAL.pdf, accessed July 2013.


http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Publications/Reports/2013/tech%2520investment%2520report%2520FINAL.pdf

http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Publications/Reports/2013/tech%2520investment%2520report%2520FINAL.pdf




InnovationInnovation will be an important aspect of realising the potential of Australian manufacturing. Studies show that innovative businesses are also more productive.96 The importance of the workforce supporting innovation in the workplace has been highlighted in initial consultations as an important area for the manufacturing workforce now and into the future.

The increasingly competitive global environment means that productivity growth is likely to occur through people working in a smarter, more effective and efficient manner.97 Industry commentators have noted that there has historically been a ‘mutual dependence and interaction between manufacturing industry, science and technology’ and that the connection between innovation and the sector has ‘become increasing important in the competitive strategies of manufacturing firms’.98

An educated and skilled workforce is vital for successful innovation because it is more likely to create and implement new ideas and adapt to new technologies and organisational changes.99

There are a number of factors at workplaces that could potentially contribute to a greater rate of production and adoption of both technological and business process innovation. Business model innovation; participatory work organisation processes to improve skills utilisation and skills formation; and collaboration on innovation such as joint research, design and engineering appear to be important factors for raising productivity. Improving business management performance and adopting transformative management practices will therefore be a key aspect of driving business model innovation and collaboration.100 There are excellent examples of manufacturing businesses innovating to create efficiencies in their sector, for example additive process manufacturing areas such as plastics and composites are improving traditional tooling in the plastics industry.101

The cyclical link between skills and innovation has already been identified within the manufacturing industry with 88 per cent of the respondents to MSA’s 2013 EScan Survey reporting that skills are changing in their firms and 37 per cent reporting they needed more innovation skills.102

Manufacturers are also facing increasing pressure to achieve environmental sustainability, resource efficiency and a lower carbon footprint. Their capacity to respond to these challenges will depend on having access to a whole new range of ‘cleantech’, low-carbon solutions and the staff that can create and manage them.103 The CSIRO is working with industry to develop eco-efficient manufacturing processes which reduce waste, and decision-making tools using life cycle assessment models and inventory databases.104

96 Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, customised data request from the ABS Business Characteristics Survey, cat. no. 8158.0.

97 Productivity Commission, 2009, Submission to the House of Representatives Standing Committee on Economics: Inquiry into raising the level of productivity growth in Australia.

98 Toner, P, ‘It’s technology stupid: manufacturing’s crucial role in our economy, The Conversation, 3 February 2012, http://theconversation.com/australias-choice-the-high-road-to-productivity-or-a-race-to-the-bottom-10695, accessed 29 July 2013.

99 Department of Industry, Innovation, Science, Research and Tertiary Education, 2012, Australian Innovation System report 2012, p. 30, http://www.innovation.gov.au/innovation/policy/australianinnovationsystemreport/aisreport2012.pdf, accessed 26 July 2013.

100 Department of Industry, Innovation, Science, Research and Tertiary Education, 2012, Australian Innovation System report 2012, www.innovation.gov.au/Innovation/Policy/AustralianInnovationSystemReport/AISR2012/index.html, accessed 12 July 2013.



103 Australian Business Foundation, 2011, Manufacturing futures, p. 27.104 CSIRO, Future Manufacturing National Research Flagship: manufacturing a cleaner future,

www.csiro.au/en/Organisation-Structure/Flagships/Future-Manufacturing-Flagship/Future-Manufacturing-Flagship-Overview/The-challenge.aspx, accessed 13 June 2013.


http://www.csiro.au/en/Organisation-Structure/Flagships/Future-Manufacturing-Flagship/Future-Manufacturing-Flagship-Overview/The-challenge.aspx

http://www.csiro.au/en/Organisation-Structure/Flagships/Future-Manufacturing-Flagship/Future-Manufacturing-Flagship-Overview/The-challenge.aspx



http://www.innovation.gov.au/Innovation/Policy/AustralianInnovationSystemReport/AISR2012/index.html

http://www.innovation.gov.au/Innovation/Policy/AustralianInnovationSystemReport/AISR2012/index.html

http://www.innovation.gov.au/innovation/policy/australianinnovationsystemreport/aisreport2012.pdf

http://www.innovation.gov.au/innovation/policy/australianinnovationsystemreport/aisreport2012.pdf

http://theconversation.com/australias-choice-the-high-road-to-productivity-or-a-race-to-the-bottom-10695

The Abbott Government’s election policy indicated support for innovative manufacturers with the establishment of a competitive manufacturing transition grant program aimed at supporting the transition to new markets and technologies. It also indicated a commitment to extra tax incentives for research and development.105


What strategies can be used to encourage innovation (technical and non-technical) in the workplace?

105 The Coalition, 2013, The Coalition’s policy to boost the competitiveness of Australian manufacturing, p. 6.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 34

4 Leadership and managementIntroductionBoth AWPA’s literature reviews and initial consultations have highlighted leadership and management skills development as critical workforce development issues. Given the importance of this area, leadership and management is explored separately to other skills issues.

The challenges for the manufacturing sector discussed elsewhere in this report make it crucial that manufacturing businesses are innovatively led and competently managed. The extent of innovation, recent market and technological changes and expected further changes highlights the importance of focusing on change management. Expert change management will be vital in ensuring workforce development leads to the competent application of new and disparate skills and accepting new and challenging workplace cultures.

The influence of competent management on the outcomes of organisations has been widely recognised. On average, well-managed companies grow and prosper, whereas poorly managed companies do not. Well-managed companies can internationalise their operations and have a sound chance of success outside Australia.106

A priority area for skills development in the manufacturing sector is leadership and management. MSA has stated that:

Manufacturing needs strong leadership to help realise and capitalise on opportunities … Leaders must be able to effectively manage change and transition their organisations into high performing workplaces … SMEs … need to be specifically targeted for leadership and management development.107

One of the three recommendations in the McKell Institute report Understanding productivity—Australia’s choice is that Australia needs to create better managers. In particular, ‘Australian governments and businesses must prioritise building innovation and management capability. This should include a focus on management education and leadership development …’108

DefinitionAlthough often referred to jointly or as synonyms, leadership and management are different. While the role of a manager can include leadership, its essence is to perform well-known processes such as planning, budgeting, structuring jobs, staffing jobs, measuring performance and solving problems. It is easy to underestimate how complex this task really is (especially for those not in senior management jobs). Management is crucial—but it is not leadership.

Leadership is entirely different. It is associated with taking an organisation forward, finding opportunities that are emerging and successfully exploiting those opportunities. Leadership is about vision, about people buying in, about empowerment and, most of all, about producing useful change.

If it is not recognised that talking about management is not the same as leadership, there will be a tendency work harder to manage, rather than provide leadership. Over-managed and under-led organisations will eventuate—and they will be increasingly vulnerable in a fast-moving world.

106 Samson, D, 2011, Karpin report revisited: leadership and management challenges in Australia, p. 34.107 Manufacturing Skills Australia, 2013, Environmental scan: a new era for manufacturing, p. 9.108 Green, R, Toner, P and Agarwal, R, 2012, Understanding productivity—Australia’s choice, p. 46.


Manufacturing management in AustraliaDavid Gruen from the Australian Treasury has compared the effectiveness of Australian manufacturing management internationally, using data from several management studies, shown in Figure 6.109 Australia’s management in manufacturing enterprises compares unfavourably with countries such as the United States, Japan, Germany and Sweden and is on a par with the United Kingdom, France and Italy.

Figure 6 Average management performance in manufacturing, selected OECD countries

Australia, like some other countries, has a somewhat larger tail of companies with relatively poor management performance than the United States. Significantly, managers in the manufacturing sector have one of the lowest proportions of tertiary qualifications across surveyed countries, hampering Australia’s ability to participate effectively as a ‘high cost’ economy in global markets and supply chains.110

One of the key findings of the studies is that large companies tend to be much better managed than small ones. This is particularly relevant for Australian manufacturing, which has a larger proportion of small firms than almost all other OECD countries. Ownership arrangements are also important: multinationals tend to implement strong management practices; publicly listed companies perform well; but family-run businesses tend to exhibit inferior management performance. The level of education and skills of both managers and non-managers is positively correlated with management performance.

The Productivity Commission notes that managerial and creative capabilities matter in Australia’s ‘adopt and adapt’ model of innovation:

Organisations need people who can develop new and better ways of doing things, including through adopting and adapting existing knowledge and technologies. Managerial skills are a

109 Dolman, B and Gruen, D, Australian Treasury, 2012, Productivity and structural change, paper presented by Gruen to the 41st Australian Conference of Economists, 10 July.

110 Green, R, 2009, Manufacturing matters in Australia: just how productive are we? p. 23.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 36

critical input into innovations in organisational practice, while creative talent enables the development of new products as well as engaging client interest.111

As high scores in management are positively correlated with measures of success such as sales, productivity, employee numbers and market valuation, it is vital for Australian manufacturing businesses to take steps to improve management and leadership performance. However, as is common among managers worldwide, Australian managers tend to overrate their own effectiveness, suggesting that there may be less than a universal acceptance of the need to improve in this area.112

Future manufacturing leadership and managementInnovation and Business Skills Australia commissioned research to identify contemporary and emerging skill needs of Australian leaders and managers and consider options for how the VET system can best meet these needs. One of the findings was that future management will need to be strong in leadership—meaning modelling behaviours, motivating and leading groups, leading project teams and having highly developed communication skills. Another skill that managers need to possess and use is continual review and communication of the skills needs of the business, so that workforce skills do not fall behind in rapidly changing environments. Managers will have people management, productivity and performance management skills as well as being innovative and working well with diversity in workplaces and markets. These managerial and leadership skills were found to be requirements at all levels of management.113

The Management matters report suggests that ‘focusing on the critical mass of poorly managed manufacturing firms within the country is the most effective way of enhancing Australia’s overall management capability and performance’.114 However, although Australia has a large number of business schools, most are based on the Harvard model, which produces graduates for working in large multinational firms.

There may a mismatch between what is needed and what is being taught, given that most Australian managers will work in SMEs and family businesses. It is often said that SME managers are too involved in their business to concentrate on the business. Mostly, these manufacturing businesses are under such pressure to produce and manage costs that finding time and funding for implementing innovative training and practices is very difficult. But these are the very businesses that have the most to gain from identifying their skills needs, enabling the integration of innovative solutions and fostering an innovative workplace culture that encourages all staff to apply their knowledge and training and be innovators and problem solvers. Similarly, the continuity of SME manufacturers (and their knowledge bases) could be improved by earlier and more thorough succession planning and training. Given the high proportion of SMEs in manufacturing, it will be important to address this issue by tailoring programs to this segment of the industry.

Skills utilisationA key challenge for managers is to identify the skills needs for their business and to implement strategies for skills utilisation. The application or use of skills in the workplace is just as important as skills development. High-performance working strategies have a positive impact on profitability and productivity across a range of organisations.115 Increasing qualifications and foundation skills will help equip the manufacturing workforce with the tools to hold a competitive advantage, but these

111 Productivity Commission, 2009, Australia’s productivity performance, submission to the House of Representative Standing Committee on Economics, p. 44.

112 Green, R, 2009, Management matters in Australia: just how productive are we?, p. 6.113 Innovation and Business Skills Australia, 2013, Leadership and management scoping report, pp. 2–3.114 Green, R, 2009, Management matters in Australia: just how productive are we?, p. 7.115 Skills Australia, 2011, Skills utilisation literature review, p. 12.


capabilities will be of little benefit if they are not utilised correctly. People need to be in jobs that allow them to apply their skills effectively, to enable productivity to increase meaningfully.116

A longitudinal study of 308 UK manufacturing companies found a 9 per cent increase in value added per employee when the high-performance workplace practices of empowerment and extensive training were adopted.117 The clear correlation between skills utilisation and increased productivity, employee engagement and satisfaction demonstrates that employers must make this area of workforce development a key priority if they are to enhance their global competitiveness. There is a need to develop the capacity of manufacturing enterprises to undertake effective workforce planning and development to identify the skills needs of the enterprise and then to plan workforce development to utilise existing skills and develop new skills in the existing workforce.


What short- and medium-term enhancements can be made to improve the leadership, innovation and management skills in Australian manufacturing, particularly in SMEs?

Have we got the issues right? What are the gaps in our analysis?

116 Ibid., p. 3.117 Birdi, K, et al., 2008, ‘The impact of human resource and operational management practices on company

productivity: a longitudinal study’, Personnel Psychology, vol. 61, no. 3, p. 496.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 38

5 Preparing for the future—support programs, policies and initiativesIntroductionAWPA’s preliminary research and consultations have identified a large range of initiatives aimed at improving the manufacturing sector’s productivity, innovation and skills utilisation. There are also many programs that seek to ensure manufacturing skills supply (attraction and retention) through workforce planning and skills needs analysis, participation, and skills creation and development. These initiatives have been developed by government and industry at both the state and federal level, and in many cases involve collaboration and co-funding.

This section provides an overview of some of these initiatives. As the manufacturing industry has been managing many of the challenges outlined in this paper over a number of decades, some of the strategies used by industry and governments have been used for a long time. Yet, many of the reports cited in this paper highlight that, despite the substantial support provided by governments to address labour and skills issues and the wide range of industry initiatives in place, stakeholders are still concerned that the workforce development needs of the industry are not being met. However, several key initiatives are new or forthcoming and so their impact cannot currently be assessed.

A number of workforce development programs and policies specifically target the food manufacturing sector. As AWPA’s food and beverage workforce study discusses these initiatives, this study will not examine them in detail.

Initiatives to address existing skills challengesThe range of manufacturing industry skills challenges outlined in section 3 highlight the need for the industry to invest in its workforce by providing avenues for workers to capitalise on their skills and up-skill as required. Studies show that employee satisfaction levels and engagement also increase when enterprises make better use of their employees’ skills.118 This is equally important for workers facing redundancy as it will assist them to transition into a new role within manufacturing or retrain entirely.

The National Workforce Development Fund (NWDF) is an Australian Government program to assist individual enterprises to increase their workforce capacity. It provides existing and new workers with opportunities to enhance their skills through formal training. The NWDF aims to increase the supply of labour and skills in sectors and occupations where there is a current or emerging skills need. It is a co-contribution model based on partnerships between industry and government.

Manufacturing sector stakeholders have commented that the NWDF is useful for manufacturers and that the co-contribution model encourages enterprises to participate more fully in training. For manufacturing, up-skilling programs in competitive systems and practices are the most popular type of training accessed under the fund, with more than 80 per cent of applications targeting Certificate III and IV qualifications from that particular training package.119

However, MSA has raised concerns that SMEs (a prevalent business group in manufacturing) are not successfully accessing the fund because they find the application process arduous and may be deterred by the 30 per cent contribution required from them.120Program data for the NWDF for 2011–12 does not include data on take-up by micro businesses; however, it does show that approximately 56 per cent of learner enrolments are from businesses with fewer than 100 employees. Learner

118 Skills Australia, 2012, Better use of skills, better outcomes: a research report on skills utilisation in Australia.119 Manufacturing Skills Australia, 2013, Environmental scan: a new era in manufacturing, p. 5.120 Manufacturing Skills Australia, 2013, Environmental scan: a new era in manufacturing, p. 22.


enrolments from small businesses with fewer than 20 employees are around 30 per cent.121 AWPA’s 2013 National Workforce Development Strategy recommends that joint funding between Enterprise Connect and the NWDF be explored to achieve greater alignment of business improvement and skills programs to support SMEs.122

The Skills Connect Fund was announced in the 2013–14 Commonwealth Budget. The fund provides grants to individual firms and business clusters to support the cost of accredited training. It complements and adds choices to the funding initiatives already available through Skills Connect. By providing more flexible access to Australian Government funding for skills and training, it aims to provide the opportunity to support diverse capability and training needs to fit a business plan or meet wider whole-of-workforce needs. The fund replicates the NWDF’s co-contribution model, although different funding arrangements may apply for mature-aged workers. A total of $45 million is available for grants in 2013–14.123

Manufacturing stakeholders raised concerns that many firms lack the knowledge or expertise to determine their business skills needs or existing skills gaps in their workforce. In 2011 MSA received funding from the NWDF for an innovative project to form the Manufacturing Workforce Development Service (MWDS). Established in February 2013, the MWDS aims to assist firms to make more strategic use of their existing skills and knowledge. The program is being implemented collaboratively with the Australian Industry Group and the Australian Manufacturing Workers’ Union in New South Wales, Victoria and South Australia and will run until June 2014. Through the program, expert advisers provide a free service to SMEs to create workforce development plans by working closely with them to identify the critical skills in the business. They also give guidance on implementing the plan, assistance with NWDF funding applications and advice on how to select a suitable registered training organisation.124

In addition, since 2008 the Australian Government’s Enterprise Connect program has offered eligible businesses a free comprehensive, confidential and independent business review. This has helped build lasting capability and address gaps for large numbers of SMEs in the manufacturing sector and received support from industry stakeholders.125 Enterprise Connect is also complemented by a range of state government initiatives such as the Victorian Government’s Grow Your Business program.126

MSA also offers the MskillsManager, a workforce development tool to support enterprises to develop and manage workforce capability. The tool helps businesses to assess work requirements, connect work tasks to competency standard units, develop work specifications, create competency profiles, undertake skills audits and analyse training needs.

Raising the skills profile of the current manufacturing workforce is dependent on industry addressing LLN skills issues. The Workplace English Language and Literacy (WELL) program is the Australian Government’s primary program for providing LLN training in the workplace. The program assists workers whose level of LLN skills affects their capacity to perform workplace tasks and/or work-related training. MSA has a WELL broker contracted to raise awareness of the program and assist businesses

121 Department of Industry, Innovation, Science, Research and Tertiary Education, 2012, National Workforce Development Fund program data to 30 September 2012, based on preliminary unaudited data received in November 2012. These figures do not include the 5 per cent of total organisations that did not report their size. When organisations that did not report their size are removed from the total, the proportion of enrolments from businesses with 0–19 employees was 31.6 per cent, and the proportion of enrolments from businesses with 20–99 employees was 27.3 per cent.

122 AWPA, 2013, Future focus: 2013 National Workforce Development Strategy, p. 57.123 Australian Government, 19 June 2013, Skills Connect Fund, http://skillsconnect.gov.au/faqs-case-studies-and-

news/skills-connect-fund, accessed 20 June 2013.124 Asia Pacific Magazine, 25 February 2013, ‘New workforce development service for manufacturers’, aviation

business, www.aviationbusiness.com.au/news/new-workforce-development-service-for-manufacturers, accessed 19 June 2013.

125 Department of Industry, Innovation, Science, Research and Tertiary Education, 2013, About us, http://www.enterpriseconnect.gov.au/about/Pages/default.aspx, accessed 18 June 2013.

126 http://www.business.vic.gov.au/grants-and-assistance/grow-your-business, accessed 4 September, 2013.Australian Workforce and Productivity Agency Manufacturing workforce issues paper |Page 40

http://www.enterpriseconnect.gov.au/about/Pages/default.aspx

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http://skillsconnect.gov.au/faqs-case-studies-and-news/skills-connect-fund

to determine their workforce development needs in foundation skills such as LLN and digital literacy. Access to the program is important to ensure that the entire manufacturing workforce will have the opportunity to be up-skilled.127

As discussed in section 3, access to government-subsidised training places is crucial for displaced workers. In recognition of the important role skills development plays in enabling people to transition to new roles, all levels of government have introduced programs to specifically cater to this group. For example, in 2008, the Australian Government established the Automotive Industry Structural Adjustment Program for workers who have been made redundant in the automotive manufacturing industry. It provides intensive employment services, including training and skills development. In addition, Job Services Australia helps program participants to develop a tailored Employment Pathway Plan and they are eligible for extra assistance through the Employment Pathway Fund. Other similar programs, such as the Textile, Clothing and Footwear Structural Adjustment Program and the Steel Transformation Plan, exist in other industry sectors.

Future-focused initiatives to support Australian manufacturing in the 21st centuryThe issues and trends affecting the manufacturing industry now and into the future require the industry to adapt as the knowledge and skills required evolve. It also makes it an imperative that the manufacturing sector attracts workers with the required skills. To address these challenges, a number of initiatives focus on increasing the productivity and innovative capacity of manufacturing firms by helping them identify and implement more efficient or effective ways to do business.

The establishment of a $50 million manufacturing transition grant program, announced by the Abbott Government as an election commitment, will provide up to $10 million of grant funding to help communities and business transition to new and growing manufacturing industries. Grants will be awarded on a merit basis with consideration given to: the multiplier effect of the grant and the new industry it is intended to help; the likely impact on job growth; and the extent of local support. This will enable manufacturers to transition to competitive niche and high-value added manufacturing industries.128

The New South Wales Government’s Manufacturing Industry Taskforce recommended the establishment of the NSW Agility Program and Manufacturing Innovation Awards as the centrepiece of the state’s Industry Action Plan. The program will recognise and reward manufacturing businesses undertaking innovative initiatives, including training, as a strategy to encourage more businesses to adopt and invest in innovative business strategies, even when faced with a high-cost operating environment. A key objective of the program is to encourage industry to take up the challenges itself rather than be dependent on government assistance.129

Since 2004, the Victorian Government has held the Manufacturing Hall of Fame Awards to recognise excellence in the manufacturing sector. By showcasing successful organisations and innovative thinkers, the awards provide a mechanism to promote a positive image of the sector. A number of existing programs also aim to promote manufacturing employment as a career choice, particularly for groups where participation is low, such as women, people with disabilities, and Indigenous workers.

In addition to guaranteeing that the manufacturing industry has an adequate supply of workers to fill replacement demand, it needs to ensure that it has the right skills in place to capitalise on future

127 Department of Industry, Innovation, Science, Research and Tertiary Education, 2013, Workplace English Language and Literacy (WELL),www.innovation.gov.au/Skills/LiteracyAndNumeracy/WorkplaceEnglishLanguageAndLiteracy/Pages/default.aspx, accessed 18 June 2013.

128 The Coalition, 2013, The Coalition’s policy to boost the competitiveness of Australian manufacturing, p. 6.129 Manufacturing Industry Taskforce, 2012, NSW Manufacturing, NSW State Government, p. 19,

http://www.business.nsw.gov.au/__data/assets/pdf_file/0020/26246/manufacturing_iap_final_20121213.pdf, accessed 18 June 2013.


http://www.business.nsw.gov.au/__data/assets/pdf_file/0020/26246/manufacturing_iap_final_20121213.pdf

http://www.innovation.gov.au/Skills/LiteracyAndNumeracy/WorkplaceEnglishLanguageAndLiteracy/Pages/default.aspx

http://www.innovation.gov.au/Skills/LiteracyAndNumeracy/WorkplaceEnglishLanguageAndLiteracy/Pages/default.aspx

growth opportunities. Enterprise Connect is running a design integration pilot with select businesses in New South Wales and South Australia. Based on similar overseas programs, it aims to help participating firms discover how to use design to be more innovative, competitive and profitable. During the program, analysts work with senior management to conduct a business audit and develop a plan for design integration in their business. This hands-on process helps firms to understand how design can be used strategically and as an effective device to enhance business performance, open new markets, and reduce business cost and risk.130

At the industry level, some sectors, such as printing, are preparing for new skills demands by equipping the industry with updated competency standards and qualifications and holding professional development workshops to explain updates to training packages.131

Initiatives to drive leadership and managementThe need for action to enhance leadership and management in Australia has been recognised by the establishment of the Centre for Workplace Leadership. The centre is a partnership between government, the University of Melbourne and Australian businesses. It will receive $12 million in funding over four years from the government, around $5 million from the university and cash and in-kind contributions from business. The centre will help businesses, especially SMEs, to improve their performance through ‘on the ground’ projects. It will inform and educate managers and leaders at all levels of organisations on the importance and practice of good leadership, positive workplace culture and employee engagement and conduct relevant research into Australian workplaces.

Enterprise Connect offers a partially subsidised course on business leadership and management skills to chief executives and SME owner-managers. The course, Leadership 21, is run by Mt Eliza Executive Education over a period of six to eight months. It consists of individual coaching sessions with a qualified business coach; group coaching sessions; and four workshops run by experts in business, leadership and management which cover topics such as business analysis, strategic planning, managing people, and marketing and sales. The program has been successful, with participants commenting that they have stronger leadership and management skills at its completion and noting tangible business benefits such as increased revenue and increased profitability.132

The importance of developing leadership and management skills in the industry has been recognised in a range of state-based programs. The South Australian Government announced the creation of a Manufacturers Leaders Network, which will consist of experienced executives from industry. The group will share knowledge and engage international experts and chief executives of successful national and international SMEs with the aim of maximising the number of managers and businesses exposed to learnings about practical pathways to higher performance manufacturing. In the medium term it is anticipated that the group will take on a peer-to-peer mentoring role with executives in other companies.133


What are the gaps in service provision and areas of duplication in the workforce development programs, policies and initiatives supporting manufacturing?130 Department of Industry, Innovation, Science, Research and Tertiary Education, 2013, Design Integration

Program, http://www.enterpriseconnect.gov.au/media/Pages/FactSheets/Design-Integration-Pilot.aspx, accessed 18 June 2013.

131 AWPA, 2013, Industry snapshots, manufacturing, p. 12, http://www.awpa.gov.au/our-work/national-workforce-development-strategy/2013-workforce-development-strategy/Pages/2013-Industry-Snapshots-.aspx, accessed 24 July 2013.

132 Australian Government, 2013, Leadership 21, www.enterpriseconnect.gov.au/media/Documents/Fact%20sheets/Leadership21/Fact%20Sheet_Leadership21.pdf, accessed 18 June 2013.

133 South Australian Department of Manufacturing, Innovation, Trade, Resources and Energy, 2013, Manufacturing works, www.dmitre.sa.gov.au/manufacturing_works, accessed 19 June 2013.


http://www.dmitre.sa.gov.au/manufacturing_works

http://www.enterpriseconnect.gov.au/media/Documents/Fact%20sheets/Leadership21/Fact%20Sheet_Leadership21.pdf

http://www.enterpriseconnect.gov.au/media/Documents/Fact%20sheets/Leadership21/Fact%20Sheet_Leadership21.pdf



http://www.enterpriseconnect.gov.au/media/Pages/FactSheets/Design-Integration-Pilot.aspx

What strategies could be introduced to better support manufacturing businesses of all sizes to actively think about workforce development and job design, and invest in skills and training?


Attachment A—How to respond to this issues paperAWPA is inviting submissions on this issues paper and a submission form is included on the following page.

A number of questions have been included throughout the issues paper to prompt thought and feedback on specific issues. Your feedback on these questions will assist AWPA to develop its final manufacturing workforce development report. Addressing some or all of these questions is optional.

AWPA is also inviting examples of successful programs or initiatives which address skills gaps and shortages and encourage workforce development. These case studies will enable AWPA to feature real-world examples of successful approaches to manufacturing skills development in the final report. AWPA will seek your permission to include your case study in the final report.

Please provide your feedback, along with any case studies, to this paper by 22 November 2013. Responses should be emailed to the AWPA Secretariat at [email protected]. The submissions we receive will be posted on the AWPA website and may be quoted. If you do not wish for your input to be published, please indicate this on the form that follows.

Please type your response in the space provided after each question, save as a Word document, and email the completed form to:

[email protected].

or post to:

Sectoral Reports Team (Manufacturing) Australian Workforce and Productivity AgencyGPO Box 9839CANBERRA ACT 2601


mailto:[email protected]

Submission on Manufacturing workforce issues paper

Contact information

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Email

I do not consent to have my input made available on the AWPA website.

Manufacturing—what lies ahead?1. What are the priority skills required in the manufacturing workforce to work in global supply chains?

2. If manufacturers are to exploit opportunities from the Asian century, what are the capabilities leaders, workers and managers need?

3. How are recent and emerging advances in technology impacting on skill requirements?


Manufacturing workforce now and in the future4. What strategies do businesses use to engage and retain older workers?

5. What strategies are being used to attract and retain women in manufacturing?

6. Are education and training providers currently producing graduates with the skills and competencies required by the manufacturing industry today and into the future? If not, what are the skills gaps?

7. What is currently working or is a best practice example of work-integrated learning in higher education?

8. How important is the use of short course targeted training and non-accredited training in your sector?

9. What kinds of strategies or initiatives are effective in addressing the LLN skills development needs of the manufacturing workforce?


10. What employment and training strategies are effective to help displaced workers or at-risk workers to transition to new employment?

11. What types of continuous learning programs have been effective in teaching manufacturing workers skills that can be broadly applied across the industry and to other industries?

12. What strategies can be used to encourage innovation (technical and non-technical) in the workplace?

Leadership and management13. What short- and medium-term enhancements can be made to improve the leadership, innovation

and management skills in Australian manufacturing, particularly in SMEs?


Support programs, policies and initiatives14. What are the gaps in service provision and areas of duplication in the workforce development

programs, policies and initiatives supporting manufacturing?

15. What strategies could be introduced to better support manufacturing businesses of all sizes to actively think about workforce development and job design, and invest in skills and training?

16. Have we got the issues right? Where are the gaps in our analysis?

17. Any other comments on this issues paper?
