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Address ... to the Australian Chamber of Manufactures Conference

Thanks to the marvel of modern telecommunications, I am delighted to open the Australian Manufacturing '94 Conference.

Australian manufacturing has come a long way.

There have been times, even in our recent past, when the cynics would have booked a caravan at Preston for a 1994 conference on Australian manufacturing.

Instead, I am today addressing representatives of what has become a vibrant and diverse sector, pushing out the frontiers of Australian business success.

One of the pleasing aspects of manufacturing's performance is its increasing export orientation.

Manufactures now comprise almost one- third of our exports compared to only one-fifth a decade ago.

And the continuing strong growth of exports in Elaborately Transformed Manufactures (ETMs), is really something to shout about.

Australia's exports of ETMs have been growing at 19 per cent a year for the last 5 years.

This is faster than for any of the other OECD economies.

The Government's efforts to internationalise and open the economy and the tremendous response by Australian business, have enabled Australia to rise to the challenge of the dynamic East Asian markets on our doorstep.

In my last 3 portfolios (Industrial Relations; Trade; and Industry, Science and Technology), I have been fortunate to see first hand the energy and successes of some of Australia's companies that are thriving out there in the cut and thrust of international competition.

Working Nation is another step in the Government's endeavours to reform Australian industry and the economy.

By now you'll be familiar with the $630 million package of industry and trade initiatives contained in Working Nation.

They're designed to build competitive firms capable of holding their own in the international marketplace.

Without getting into the specifics of Working Nation I would like to touch on a couple of issues that are particularly important for the manufacturing sector.

Certainly they're issues that complement the Conference theme of "the way forward".

The first is innovation and the uptake of new technology.

Innovation is one of the keys to economic growth.

Last week's ABS survey on business investment in Research and Development (RD) revealed that Australian business has picked up its investment in RD, increasing by almost 20 per cent for the year 1992-3.

This is a solid performance, and after a decade of improvement, business investment in RD is now at its highest levels ever.

But business must continue to build on that achievement.

Compared to other OECD countries, Australian business investment in RD still ranks below a number of other countries, including Japan, the US, Germany, France, the UK, Italy and Canada.

And innovation is more than just a greater investment in RD.

It means finding new more effective ways of managing all of our resources, from people to processes.

And therein lies the challenge for the manufacturing sector.

I believe there are lessons to be learnt from the best practice approach to running business, namely the continuous improvement philosophy.

Manufacturers need to also embrace constant innovation.

A commitment to innovation, RD and new technology will increasingly sort out the successful companies from the not-so - successful.

It's a message that's getting through - innovation is no longer seen by the business community as solely an expense.

It's a long-term strategic input.

And according to recent international research it's an input that is producing greater financial returns than any other.

Sir Roderick Carnegie, who'll be addressing you after me, has done a great job of spreading this message throughout the Australian business community.

The Australian Manufacturing Council has completed some interim research into the practices that characterise the best manufacturing sites in Australia and New Zealand.

Their research confirmed that a major distinguishing feature between the leading firms and the poorer performing firms is a commitment to innovation and adoption of new technology.

Leaders were more likely to have newer core manufacturing technology and a degree of technological competitiveness compared to their competitors.

Yet most of our firms are three to eight years behind their international competitors in technology uptake.

The challenge still remains to convince more firms to change their attitudes.

In the White Paper initiatives the Government has allocated $63.46 million over 4 years to encourage the development and application of technology in industry.

Corporate leadership and management, of course, are essential to changing the culture of technological indifference.

Past protection for manufacturing in Australia retarded development of leadership, management and entrepreneurial skills.

While the seminal AMC/McKinsey study on emerging exporters was positive about our export potential, it also found that leadership and management deficiencies were inhibiting our growth prospects.

I note that David Karpin is speaking later this morning.

The Task Force on Leadership and Management Skills, which David heads, is expected to bring down its final report before the end of the year.

Its research so far suggests that while we have some managers equal to the best in the world, Australian management overall needs to lift--its game.

Again the challenge is there.

For its part, the government is helping to address this through support for enterprise improvement programs under AusIndustry.

Another area where the Government can play an active role is in opening doors for our manufacturers to overseas markets.

This means strengthening, at a Government level, the linkage between trade, investment and industry.

Government is determined to engender a more effective integration of policy, programs and services between the Industry and Trade portfolios.

Bob McMullan, the Minister for Trade, and I now constitute the new national Board of Industry, Trade and Investment.

We see it as a crucial vehicle to realise these goals.

Bob and I both attended the Australia-Indonesia Ministerial Forum last week.

The achievements of the Forum's Working Group on Trade, Industry and Investment is indicative of what we can achieve by coordinating these areas.

For example, an agreement on industry collaboration in marine engineering was signed at the forum and will facilitate cooperation on joint vessel production.

This will enable both the Australian and Indonesian industries to build on their respective advantages in this area to produce competitively for international markets.

I am not a new convert to the important linkages between industry, trade and investment, but it was really brought home to me on a recent trip to Europe and the United States.

For major international companies there, the links between production, investment and market access are taken for granted when planning their global and regional strategies.

And it was a pleasure as Industry Minister to hear from international corporate executives how impressed they are with improvements in Australia's manufacturing sector.

We are finally escaping the bad image of the past and now need to build on that.

International manufacturing is changing.

Patterns of production are becoming regionalised and globalised.

And Australia needs to enhance and promote its manufacturing strengths to lock into international production and trading networks.

We are certainly capable of playing in the big league.

When I visited Coflexip's headquarters in France recently, they impressed upon me that their decision to locate production of flexible pipe for sea-bed mining in Fremantle was a key strategic decision for their regional operations.

Fremantle was simply the best place to base this sort of high technology production.

There are many other examples of Australian manufacturing at the cutting edge.

But some hard work still lies ahead if we are to achieve our shared goal of making Australia into a world class producer of manufactures.

It gives me great pleasure to declare the Manufacturing '94 Conference open.

I wish you well in your deliberations. And I'm happy to take questions from the floor. Thank you.