1. Program 4:
DRIVING SECTOR
SUSTAINABILITY

2. Precarious future
Contributions to average incomes growth: Treasury

3. Unit labour cost comparisons
COUNTRY
CPI % CHANGE
Average Annual %
Change 2000-2009
MANUFACTURING
HOURLY LABOUR
PRODUCTIVITY
Average Annual %
Change 2000-2010
UNIT LABOUR COST
Average Annual %
Change 2000-2010
UNITED STATES 2.50% 5.18% -1.41%
SWEDEN 3.00% 4.42% -1.01%
FINLAND 1.82% 4.54% -0.99%
GERMANY 1.60% 1.82% 0.23%
CANADA 2.00% 0.89 1.63%
AUSTRALIA 3.00% 1.93% 2.48%
Source: US Bureau of Labor Statistics: Employers Total Costs of Labor Including Direct Pay and All On Costs

4. OECD MANUFACTURING COMPETIVENESS INDEX: AUSTRALIA VS USA
AND EURO AREA 1993-2010 (INDEX 2005=100 WHERE AN INCREASE IN
THE INDEX VALUE REPRESENTS A DECLINE IN COMPETITIVENESS )
60.0
70.0
80.0
90.0
100.0
110.0
120.0
1993
94
95
96
97
98
99
2000
1
2
3
4
5
6
7
8
9
2010
AUSTRALIA
UNITED STATES
EURO AREA
Source: OECD Manufacturing Competitiveness Index: Australia vs USA and Euro Area,
1993-2010 (2005=100); increase in index represents decline
Competitiveness challenge

6. Manufacturing matters
R&D
SKILLS
TRADE

7. 1. Short-term adjustment
o Industry participation, retraining
2. Economy-wide measures
o Infrastructure, „clean energy future‟
3. „Innovation precincts‟
o Industry-led, universities, start-ups
4. SME „absorptive capacity‟
o Enterprise Connect, ICN, Austrade
5. Workplace performance
o Engaging talent and creativity

8. “Improving
management practice
is associated with large
increases in
productivity and
output.”

9. Australian management performance gaps
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Austra
Global
countr
Operations
Metrics
Performance
Metrics
People
Metrics
Australia
Global best

10. Australian management performance gaps
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Austra
Global
countr
Operations
Metrics
Performance
Metrics
People
Metrics
Australia
Global best
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Austra
Global
countr
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Austra
Global
countr
‘Instilling a talent
mindset’

11. Program 4: Driving Sector Sustainability
Driving Sector Sustainability researches the essential components of
the manufacturing innovation system, bringing new knowledge on
workplace, firm, cluster/supply/value/sector networks, industry support
services and investment capabilities together.
Objective & benefit: To improve the agility, competitiveness
and resilience of Australian manufacturers by working on:
 What connects the prospects and activities of individual firms
to national-scale aspirations of innovation, productivity,
sustainability and competitiveness and how can gaps and
barriers be bridged?
 How can cooperation among SMEs be purposefully designed
and managed to build scale without compromising agility?
 How can key capabilities in absorptive capacity, leadership
and design-led thinking drive innovation to increase
workplace productivity?
 What new investment models will support the SME innovation
that is essential to sustained growth of Australian
manufacturing?

12. Building Industrial Competitiveness
To identify the barriers and gaps to competitiveness for Australian manufacturers, in
particular, for SMEs, and to develop flexible enablers for performance improvement in the
context of faster changing business environments
Description Year 1
(2015)
Year 2
(2016)
Year 3
(2017)
Year 4
(2018)
Year 5
(2019)
Year 6
(2020)
Year 7
(2021)
Research
Outputs
(i) Dynamic measures of competitiveness that attend to the specifics of Australian manufactures,
spillover effects and issues of difference for SMEs. These new indicators can be tracked and
improved over time and will guide investors, policy-makers and value chain/sector/cluster
leaders on the points of intervention that offer the greatest gains.
(ii) In combination with outputs from Theme 1, inform business utilisation of CRC outputs via a
consolidated view of opportunities, constraints and their interdependencies. Industry focus
groups and international comparisons will validate these findings.
(iii) Develop pathways for ‘innovation fitness’ leading to updated excellence models (through
Standards Australia).
(iv) Develop enablers that lower the barriers for business agility, dealing with, for example, legacies
in the form of assets, approvals processes and barriers for entry to global supply networks: an
SME efficiency and innovation index; a B2B supply network relationship enabling platform; and
a cost-effective approvals roadmap tool.
Resources x full time equivalent researchers and a program coordinator per year
A total of x PhD / Masters students trained over the course of the seven year program
A total of $xxM in operational expenditure invested over the seven year period
Participants

13. Addressing Challenges of SMEs through Cooperation
To develop new knowledge about why, when, where, on what and how cooperation among
SMEs can generate competitive advantage through the strength of more and agility of many
Description Year 1
(2015)
Year 2
(2016)
Year 3
(2017)
Year 4
(2018)
Year 5
(2019)
Year 6
(2020)
Year 7
(2021)
Research
Outputs
(i) Lessons from enduring examples of collaboration, identifying the domains and conditions that
define and sustain purposeful collaborative efforts. For example, SMEs may cooperate to
establish sufficient scale for bids and join venture strategies in global supply networks, to
diversify risk for potential investors/lenders, or to develop new business/technology models.
(ii) Drawing on existing datasets and action research with CRC clusters, identify the practices and
relationships that determine cluster competitiveness.
(iii) Integrate the above new knowledge in a novel and enabling cluster formation tool to support
cluster development, recruitment, partnering and competitiveness. This tool complements the
B2B relationship building platform in Project 1.
Resources x full time equivalent researchers
A total of x PhD / Masters students trained over the course of the seven year program
A total of $xxM in operational expenditure invested over the seven year period
Participants

14. Making Change for Productive Workplaces
To ensure innovation can cut-through to increase workplace productivity by identifying
and implementing improved practices in absorptive capacity, leadership and design-led
thinking
Description Year 1
(2015)
Year 2
(2016)
Year 3
(2017)
Year 4
(2018)
Year 5
(2019)
Year 6
(2020)
Year 7
(2021)
Research
Outputs
(i) Identify how new technologies can extend worker capacity and the pre-conditions in terms of
skills, leadership and culture change to gain these benefits – these findings complement
Theme 2 for specific intentions of assistive automation.
(ii) Identify more broadly the skills, leadership and culture change required to support agile
technologies/business models in the workplace.
(iii) Identify triggers for a focus on design-led thinking to support a more dynamic and responsive
interface between manufacturing and its customers.
(iv) Develop guidance and assessment tools to support workplace absorptive capacity and agility.
These will be trialled in industry sectors identified in Theme 1, such as aged care, and also in
established demonstration sites (e.g. Tonsley Park in Adelaide and ULab in Sydney). They will
also build on excellence models developed in Project 1.
Resources x full time equivalent researchers
A total of x PhD / Masters students trained over the course of the seven year program
A total of $xxM in operational expenditure invested over the seven year period
Participants

15. Investing in Sustainable Industrial Futures
To explore how sources of investment funds can be utilised more effectively to support
manufacturing innovation
Description Year 1
(2015)
Year 2
(2016)
Year 3
(2017)
Year 4
(2018)
Year 5
(2019)
Year 6
(2020)
Year 7
(2021)
Research
Outputs
(i) Report series and discussion forums on new investment models, focusing on regulatory,
institutional and public interest issues.
(ii) Case studies of international investment models, focusing on rationale, risk and take-up.
(iii) Comparison of short-listed investment model alternatives which may increase access to funds
for manufacturing innovation.
(iv) Identify SME issues and opportunities for short-listed models. For example, perspectives on
sharing equity, and increasing information.
(v) Pilot or experimental evaluation of preferred options.
(vi) Using outputs from Theme 1 and from Project 1, develop methods for firms to provide
prospective risk-return information. These methods can be codified (in conjunction with
Standards Australia) as principles-based or verifiable standards, generating information on
which investors can readily rely.
(vii) Using outputs from Project 2, examine the prospect for mutual forms to present a more
diversified risk-return proposition for investment.
Resources x full time equivalent researchers
A total of x PhD / Masters students trained over the course of the seven year program
A total of $xxM in operational expenditure invested over the seven year period
Participants