How we overcome Australia’s manufacturing skills shortage
The current state of play
This is a really interesting and complex topic and one that I am really passionate about because it is something that we are really struggling with. Skills and capability development underpins both economic and social prosperity and enables inclusive industry growth. The flip side of this is lack of access to the right skills at the right time, can be debilitating to an industry, and the community surrounding it.
The current labour shortage is hardly a unique talking point in manufacturing circles. In fact, it’s something that as manufacturers, we are starting to get tired of talking about. Not because it doesn’t matter, not because we have solved the problem, but because years have gone by without meaningful progress, despite the issue being discussed by industry leaders, politicians, and educational institutions at all levels. Unfortunately, for manufacturers, the skills gap grows wider as each day goes by.
Currently, in Australia, manufacturing suffers one of the highest rates of skills shortages in the labour market. This is backed up by an ABS finding that 17.2% of manufacturers said that a lack of skilled people in the labour market was a barrier to general business activities or performance, and 14% said it was a barrier to innovation.
From my perspective, the challenges around skills and capability are compounded by a number of forces.
Although most people see manufacturing as an “industry” it is really is a series of capabilities that covers almost every aspect of our community.
This makes it an incredibly complex area to support from a skills and capability perspective. It is so broad, and the skills required for each industry that manufacturing supports are so specific. For example, the skills required to assemble and pack a medical device are entirely different to those required to machine precision metal components or injection mould a plastic product for a defence application.
To compound this already complex issue, our manufacturing industry is going through a major period of transformational change in our transition to Industry 4.0 – the fourth industrial revolution. This has presented a plethora of reskilling, upskilling and broader employment opportunities across a number of industries. But in order to do take advantage of these opportunities, our training systems must change and be agile with the times.
We will be fighting on the global stage for skilled workers. Just to put it in perspective how widespread this skills shortage is, Deloitte predicts that in the US, the manufacturing skills shortage could risk 2.5 trillion US $ in economic output over the next decade. They also predict that 2.4 million positions in manufacturing will be unable to be filled over that same period – that equates to half the available manufacturing jobs.
This is a serious issue here that could impact our ability to not only supply our Australian Made products to the world but it will also have severe economic impacts for our industry that brings over 100 billion dollars to the Australian economy every year!
This is not something that we can ignore.
That being said, it is not all doom and gloom. I always think that with challenge comes opportunity. This is an opportunity for Australia to step up to the plate and lead the way in the manufacturing capability journey.
How does Australia overcome the skills challenge?
This is something I have spent a lot of time thinking about. There are a few facets of this problem. Firstly, the pipeline to enter manufacturing is broken.
Address our siloed education system
I believe we have a siloed education system. A system where there is a fork in the road, which makes our future workforce decide their path at the young age of 12 or 13. They start selecting subjects that push them down one path in that fork without truly understanding what that means. This fork I speak of is the binary decision: Tertiary or Vocational, Professional or Trade. This in my opinion is one of the core issues we have with our future workforce for Advanced Manufacturing. This goes against the lifelong learning, building blocks approach required for skilling. This is severely restricting the skills pipeline.
I believe we need to turn this education path on its head. We need an agile approach to education, as skilling needs to keep up with the rate of technological change.
Why can’t we have a system where people can continue to educate themselves throughout their life if they choose to do so? Why can’t our tradespeople leverage their existing expertise to develop additional micro qualifications to become expert technicians? Why does the path to trade qualifications differ so much from the path for engineering qualifications when we all work together to solve the problems? These are the questions I keep reflecting on.
My vision, is to see what does it look like in Australia if we have an education pathway that leverages trade to technician to engineer, all in one seamless path.
The structure of education in parts of Europe enables this. In Germany and France, being a Technician is a highly valued professional. One which enables the growth of the Manufacturing Industry, one which I believe is the key to our future successes in the technical field.
Addressing the shortage of people entering the industry is one element of how to address this challenge.
Get the skill we need now
The other side is starting to tackle the problems of today. Many Australian manufacturers are currently struggling to get the skilled staff required to deliver orders to their customers. A few that come to mind are in the Food Technology and Manufacturing sector, and in Precision Metal Fabrication for highly regulated applications like defence and medical.
We know where the current challenges are, and I believe, that we can achieve short term successful outcomes if we focus and try to ‘eat the elephant one bite at a time’, as they say.
Focus on the affected region, the specific industry need and develop solutions for both long and short term outcomes to address this need. There is no one size fits all solution for capability development in manufacturing and I think that is where we have gone wrong to date.
When we design and develop a new product in manufacturing, we often set up a pilot line. This smaller-scale pilot allows us to understand what works and highlights the potential risks and issues with the production line so that when we scale up, we have a process that can be replicated where we have already ironed out a lot of the problems.
This same methodology can be applied to capability development. I would like to see some focused areas of high need supported in a coordinated manner to deliver pilot-scale skills programs. Targeted programs that truly meet the need of that specific manufacturing sector.
From there we can understand the barriers and challenges and apply those learnings on a larger scale. What I am seeing currently is that governments, educational institutions and industry alike are paralysed by the sheer scale and breadth of the skills problem. This paralysis is causing a lack of action, which is leaving our manufacturing industry struggling with the skills shortage.
The answer might be for companies to do something radical – band together with those they compete with for customers and talent and work together to find a solution.
