The document provides a submission for Queensland's Advanced Manufacturing 10 Year Roadmap. It summarizes that Queensland needs to diversify its economy beyond natural resources and tourism to have a vibrant future. Currently, the state has a historical commodity focus that discouraged entrepreneurship. The submission outlines challenges such as the need to improve business skills, encourage collaboration between industry and universities, and provide better access to capital for growing companies. It proposes policy settings like trade missions, benchmarking programs, and initiatives to develop advanced technical and business skills in the population.

1. Copyright John Hine and Associates Pty Ltd 2016, www.developqld.net.au. Page 1
JOHN HINE AND ASSOCIATES PTY LTD
www.developqld.net.au
SUBMISSION
Qld Advanced Manufacturing 10 Year Roadmap
Summary
The vision of a sophisticated advanced manufacturing sector is essential if Qld is to have a vibrant economy
meeting the needs of all its citizens. Qld cannot be dependent on exploiting its natural resources, either in
mining and gas extraction, commodity agriculture or by simply bringing in overseas tourists to see our
beaches and reefs. A widely diversified economy is essential to withstand change. The quote from Dr Wagner
at QUT, on p11 of the Discussion Paper, summed up the issue well. The definition of advanced manufacturing
on p3 of the Discussion Paper is fine.
Qld must develop an economy based on companies not industries and products not commodities.
A key role for government is to create a climate for change. The level of disruption from new technologies
and emerging markets means Qld has to re-think almost everything.
A key element of this change is that Qld has to recognise that we grow our economy primarily by growing
businesses not by major infrastructure projects.
Business skills remain a major challenge across the whole economy. Aligning the university and TAFE systems
with this vision will be important.
Background
Our presenteconomicsituationhasitsbasisinourpast, whichmeantthatwe hada built-incommodityfocusina
businessenvironmentthatprotectedourbusinessesanddiscouragedentrepreneurialism. Thisarose from:
 Australiaevolvingasasource of raw materialsforBritaininthe 19th
century.
 A culture inheritedfromBritainthatsaidthat‘trade’is notsociallyacceptable. Thisculture isseeninfiction
fromJane Austento DickenstoAgathaChristie,where amajorfeature waspeople seekingtomarryor inherit
moneyratherthan to geta job or start a business. Thisis now lessrelevantinAustraliathanearlier.
 The protectiongivenby distance.
 The protectionof tariffs,importquotasandEmpire Protection. Empire Protectionwasapolicyof favouring
trade withinthe BritishEmpire andarose around1900 as an easypolicyresponse togrowingcompletionin
manufacturedgoodsfromthe USA andGermany.
 State preference ingovernmentpurchasing,whichdiscouragedbusinessesaimingtobe nationallycompetitive.
 State regulationsandproductstandardsthat gave protectiontobusinessesineachState fromcompetitionfrom
otherStates. Thisalso discouragedbusinessesaimingtobe nationallycompetitive.
Tel: 07 3264 4568
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Email: john@developqld.net.au
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 A wide acceptance of tax avoidance andtax evasioneg‘bottomof the harbour’schemes as a wayto make
‘profits’ratherthansellinggoodsandservices.
 A political environmentthatencouragedsmall farmstostaysmall and not amalgamate to create more viable
entities.
 A mix of capital gainstax andnegative gearingpoliciesthatencouragedrelativelylow riskpropertyinvestment
rather thanmore riskyinvestmentinnon-property,trade exposedareasof the economy.
 A range of regulationsindifferingsectorsof the economywhichgave levelsof protectiontobusinessesinthose
sectors,egpharmacies,taxis,farmmarketingboardsandothers.
 A limitedemphasisonbusinessskillseducationinthe past. Thismay well have flowedfromBritain,where
‘trade,’andso businessskills,were notsociallyacceptable.
 ModellingouruniversitiesverymuchonOxfordandCambridge inthe 19th
and early20th
centuries,whenthose
twoUK universitieshadlimitedcommerciallinks. Universitiesinthe USA,ina more pro-businessenvironment,
modelledthemselvesmore onGermanuniversitiesandbuiltstrongbusinesslinks.
 UniversitiesbeingevaluatedbycomparisonwiththoseinNorthAmericaandWesternEurope,where career
success for academicstaff isbasedonpublicationsinexternallyrefereedjournalsandnumbersof postgraduate
students. It issuggestedthatthese performance criteriaare inappropriategiventhe differencesinthe
economyof Australiatothe economiesinNorthAmerica andWesternEurope.
 Too much industrypolicybasedaroundattractinginforeigninvestmentratherthanbuildingupAustralian
companies.
 We have developedinnovationprogramsthatwere mainly basedoncommercialisinguniversityresearchandon
highlevel scienceandtechnology. The qualityof universityresearchhasimprovedoverthe pastdecades.
However,Australia’srecordincommercialisingthisresearchanddevelopingadvancedtechnologycompaniesis
relativelypoor. The numberof new-starttechnology companiesisnow muchlargerthatwhensuch programs
startedin1983 butthe contributionsuchcompaniestoGDP andexportsisstill low andmuchlowerthanthe
contributionof businesses thathave focussedonnew businessmodelsratherthanscience andtechnology.
Key Issues for Program Development
 The Qld economicenvironmentisdifferenttothat inEurope or NorthAmericaso programsto support
manufacturersneedtoadjustforthat. These include;
o What isa small familycompany inGermanyorthe US wouldbe a large operation inQld.
o Qlduniversitiesdon’thave anywherenearthe businesslinksthatGermanandUS universitiesdo. We
reallyneedanational programto buildsuchlinks,whichwill needtoinclude changedperformance
indicatorsforacademicstaff andmore appliedtechnologyresearchthanbasicresearch.
o We will neverhave the large scale facilitiesof multinationalsasexistinEurope andNorthAmericaand
whichthere act as informal sourcesof skilledstaff, astechnologytransferagenciesetc.
 Capital forcompaniesgrowingandexpandingisanissue,especiallyequitycapital. Encouragingthe
Commonwealthtoaddressnegative gearingandcapital gainstax concessionsthatdistortinvestmentinto
housingratherthanintocompaniesseekingtogrow and exportneedstobe addressed.
 Those aspectsof Advance Qldthat turn outto be more successful needtobe expanded.
 R&D grants aimedat specificareasof potential forQld,egthe agricultural roboticsproject,shouldalmostnever
be givento a university. These grantsshouldbe giventoan engineeringcompany ora consortiumof
engineeringcompanies. RelevantuniversityorCSIROgroupsshouldof course be involved butnotas project
leaders.
Challenges
 The biggestchallenge isthat,fora whole range of historical reasons,ourbusinessskillsneeddeveloping. A
broad rangingprogramof businessskillsdevelopmentisneeded. Anelementof managementskills suchasJIT,
QA,TQM, Enterprise Resource Planning etcislikelytobe relevant. A businessskillsprogramthatstartsat high
schoolsisneeded.
 Qld,and Australia,hashadtoo manychangeson industrypolicyoverdecades. Consistencyinindustry policyis
important.

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 Skilledworkersare anissue but,unlesspeople see jobsare there,theywill notseekcareersinanindustry.
Also,toomanycompanieshave takenthe shortcut of importingworkersratherthantrainstaff.
 Our relativelyhighbusinesscostsare an issue butwe will rarely be able tocompete onprice so needtoaim
specialityproducts atmarketswhere quality,uniquenessof designetcare suchthat price is lessof an issue.
Highqualityorganicbabyfoodfor Chinaisan example.
Collaboration and export opportunities
 The lack of cooperationbetweencompaniesisanissue. There have beenseveral programstodevelopbusiness
networksinQld,tono avail. It isworth anothertry. Businessnetworkswouldhelpwithscale,sharingstaff
and equipmentandideas. Groups suchas HunterNet,anetworkof engineeringcompaniesaroundNewcastle,
needtobe examined.
 The lack of collaborationbetweenuniversitiesandbusinessisanissue butmaywell flow fromthe prioritythat
universitiesgive tobasicresearch. A ‘studentevening’runbetweenthe UQfoodscience andtechnologyunit
and the AustralianInstituteforFoodScience andTechnology afew yearsago involvedpostgraduatespresenting
on theirresearch. The eveningwasafailure asalmostno businesspeoplecame. The reasonwasthat the
researchbeingpresentedhadlittle relevance forindustry.
Policy Settings
 Developaprogramof speeches,articles,conferences,case studiesetc, withthe universities,CSIROand
professionalsocieties, toraise awarenessof the possibilitiesandopportunities,andthe threatfromdoing
nothing.
 Involve universityITgroupsandsoftware companiesinall planningandprogramsdue to the convergence of
industrial equipmentandsoftware.
 Maintainand extendsuccessful elementsof the Advance Qldprogram.
 We needtolookat integratedpackagesof manufacturedproductsandrelatedservicesinareaswhere Qldhas
expertiseegthe mining, sugarandbeef industries. IndonesiaandVietnammaywellbe targetsfornotonlythe
sale of goodsand servicesbutforinvestmentbyQld(orAustralian) companiesinagriculture inthose nations.
 The Qld Governmentshouldcollaborate withotherSates,the CommonwealthandUniversitiesAustraliaona
setof alternate parallelperformance indicatorsforuniversitystaff thatfocussesonbusinesslinksasdistinct
frompublishedpapersandpostgraduate students.
 Developandactivelypursue aprogramto encourage the formationof cooperatives,businessnetworksetc.
 Qldshouldjointhe National CooperativesLaw projectstartedbythe NSWGovernment. Qldisone of the few
Statesnot to be so involved. We musthave national approachesinsuchareas.
 Promote soundenvironmentalmanagement;
o as a keyareaof opportunity fornew productsandservices
o as a way to save moneyvialowerenergy,waterandwaste costs
o so that companiescanmeetthe increasingrequirementsof theircustomersforlow carbonfootprintetc
products.
 Organise targetedtrade missions tothe Middle East,SE Asia,the SouthPacificandother areas.
 Buildonthe cultural knowledge,language skillsandnetworksof ourimmigrantpopulationre trade missions
and otherexportdevelopmentprojects.
 Reviewthe operationsof QMISolutions andconsiderre-establishingatechnologytransfergroupwithsimilar
aims. Linkanynewagencyto Qld TAFE,universitiesandcompanieswhose businessisassistingotherswith
technologytransfer.
 Involve QldTAFEas a keyplayer,inrespectof;
o Advancedtechnical skills
o Businessskillsprograms
o UsingTAFE workshopsetcfor;
 Pilotplantmanufacture
 Short runsof specialityequipmentwhile asmall companybecomesestablished
 Incubatorspace for newstart companies.

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 More highschoolsspecialisinginlocal industryare worthconsidering. The Hendra AviationHighSchool andthe
Stanthorpe Wine College are goodexamples.
 Benchmarkingisrelevant. QMI Solutionsdidhave abenchmarkingprogrambutQMI Solutionsmay have lost
much expertise afterthe previousgovernmentcutfunding.
 Liaise withthe CommonwealthGovernmenton;
o MaintainingourcurrentR&D Tax Incentives. There may be a needto tightenthe definitionof whatis
R&D.
o Tax reformto stopgivingtax concessionsforinvestmentinhousing. We needto reserve tax
concessionsforhigherriskinvestmentincompaniesexportinggoodsandservices. More venture
capital iscritical.
 The Roadmap shouldinclude meetingthe needsof companiessuchasMajesticGlobal,see
http://www.majestic-global.com/,whichdesign12voltTVs forleisure vehiclesandmake themoff-shorefor
world-wide distribution. As much as itwouldbe goodfor such manufacturingtobe done here itisbetterto
have the companyheadquartersanddesignandlogisticsmanagementhere thannothing.
 Work withthe mergedErgon/Energex companyintermsof developinganexportarm, linkedwithrelevantQld
companiesto exportgoodsandservicesre electricitydistribution andrenewable energy indevelopingnations
eg IndonesiaandIndiawhichhave ambitiousplanstoimprove poweravailability.