Presentation on innovation in regional manufacturing by Hunter Research Foundation's Anthea Bill at Australian Regional Development Conference in Albury in August 2015

1. Innovation in Regional Manufacturing
- A Hunter-based Study
AUSTRALIAN REGIONAL DEVELOPMENT CONFERNCE
ALBURY 2015

2. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Exploring
the challenges &
opportunities
around the
Hunter’s
manufacturing
sector
Regional Competitiveness-Manufacturing

3. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Background
Project objective
• What is needed at a regional level to
support local manufacturers to broaden
their customer base?
• What are the ways in which
manufacturing can be strengthened? -
recommendations for policy makers
and insights for individual organisations.

4. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Outline
•Project Motivation
•Method
•Findings on innovation
– Culture & leadership
– Human resources
– Access to capital
– Strategic planning
– Collaboration & networks
•Ways Forward

5. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Why this project
• Significance of manufacturing in the
Hunter
• Manufacturing punches above its
weight – GDP, export earnings, skills
and high quality jobs
• Regional economies as drivers of
growth

6. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Method
• STAGE 1: review of global factors and a small
number of in-depth interviews with innovative local
firms.
• STAGE 2: in-depth interviews with 45 Hunter-based
manufacturers. Focus on enabling factors and
barriers and strategies to support Hunter
manufacturers.
• IN TOTAL:
• 12 Advisory Group STAKEHOLDERS
• 54 MANUFACTURERS
• 600+ RESEARCHER hours

7. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Sample Characteristics
LONGEVITY: 64% going for over 20 years
SECTOR: 67% in metal
fabrication/machining
DIVERSIFICATION: 62% dependent on
mining
EXPORTING: 51% hooked into global
supply chain
PROFITABILITY: 56% experienced
declines
DOWNSIZING: 67% reduced staff
numbers

8. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Challenge Spectrum

9. Findings - InnovationFirms were asked:
• Whether they had
“developed or
significantly improved a
process, service or
product in the last 5
years”
• To further reflect on
opportunities for
innovation within their
business
AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings - Innovation

10. “We changed from a
manufacturing business that
happened to sell, to a sales
and marketing organisation
that happened to
manufacture”

11. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings- Leadership & Culture
• Culture of innovation linked to
profitability
• Through encouraging staff to
be creative, identify new ways
to do things and being
transparent about results
• Leaders/champions can
provide focus acting as role
models for innovation
• Appetite for risk

12. “Innovation and thought processes on
innovation are across every aspect of
the business, through to the
accountants”
“We think of ourselves much more as
an innovation and commercialisation
organisation than we do as a
manufacturing organisation”

13. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings - Investing in People
• Changes in human
resource management
practices key to
cultural change which
supported innovative
thinking
• High performance work
practices

14. “We really encourage innovation in
thinking; encourage staff to bring
forward ideas – be it big or small, silly or
not so silly – both over the external sales
team and our internal operations”
“The soft skills are always the issue. When
I was a lad and graduated...there were
all of these processes. Now we expect
everyone to do everything, marketing,
sales and do everything on a budget”

15. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings - Access to Capital
• Funding of innovation
consistently raised as a
challenge
• Customer driven
innovation – process
innovation less risky
• Access to R&D grants

16. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings - Strategic Planning

17. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings - Networks & Collaboration
• Networks and collaboration were a
critical aspect of doing business, and
key to innovation success.
• Collaboration with TAFE, Universities
and other research organisations
provided access to skills, technology
and employees
• Customers and suppliers.

18. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Findings – International Collaboration

19. Attract major projects
Government support
Local procurement,
Support start-ups, incentives
Standards, guarantees
Incentives to support & do business
Govt. and major industry
Support diversity, new industry
Collaboration for innovation
Unis, hubs, R&D grants
Staffing and training
Incentives (govt., industry) 0 20 40 60
1
2
3
4
5
6
Manufacturer Priorities

20. AUST. REGIONAL DEVELOPMENT CONFERNCE ALBURY 2015
Ways Forward
• Fostering University and
business linkages
• Incentives for
employee training and
skill development
• Mentoring around
business planning

21. FIND OUR MORE ABOUT HUNTER
RESEARCH FOUNDATION…
• Go to www.hrf.com.au
• Sign-up to our e-newsletter at our website
• Stay connected – search Hunter
Research Foundation
THANK YOU…