he current talk about the revitalization of Australian owned and made products is gaining traction around the country due to the current COVID-19 crisis however, is it just talk and is the Australian government really going to support home-grown manufacturing?
For the past 30 years, Australian manufacturing has declined largely due to globalization making it difficult to compete with countries that produce products cheaper where subsequently Australian companies had to move offshore. At first, the Australian government subsidized business to keep them here however, the writing was on the wall which has now created a system embedded into our culture whether you like it or not.
Much of the 20th century was fought by demanding a standard of living where workers have the right to create a life that supports themselves and their family by paying a decent minimum wage however, if Australia was to really compete with overseas workers pay-packets, are we prepared to drop the minimum wage?
So how does Australia compete? Sure, we can move back to protectionism, close off our borders and become an inward-looking nation, but as in the past, those ideals only make the country less competitive and would most likely only hurt the economy subsequently making us less productive and creating less wealth for all.
The current national zeal about manufacturing in Australia and buying locally made products is interesting to watch with many of us seeing it before and despite the COVID-19 reality, will people really buy Australian made when they can purchase the same product cheaper on the shelf below?
For the Australian manufacturing sector to be truly successful and supported by the Australian consumer, companies need to look beyond profit for just the shareholders by consciously creating value for all stakeholders i.e. customers, employees, suppliers, investors, communities, and the environment.
To a large extent, businesses are still operating under the ideals of the industrial revolution and are using an operating system that was developed in the industrial age. The idea of the sole purpose of business is to make profits and everything else is a means to an end remains the dominant mental model for business and that needs to change if we are to have a successful and publicly supported manufacturing sector.
The world was already changing before COVID-19 where consumers were consciously starting to demand companies need to have a higher purpose that transcends making money. A company’s higher purpose is the difference the firm is trying to make in the world. By focusing on a higher purpose, a business inspires, engages, and energizes stakeholders. Profit is not the purpose, although it is one of the many important measures of a business function however, a business should not exist merely to generate profits, but should also aim to generate multiple kinds of value for all its stakeholders. When a company starts to look at how they can operate consciously, they start considering their impact and footprint on the world and not just in the immediate future but 100 years from now. How is the business inspiring their customers, empowering their employees, and looking after their community? Are their suppliers operating ethically and what environmental footprint are they leaving on the world?
If we’re to revitalize the Australian manufacturing sector with the reality Australian made products are more expensive than cheap imports and to avoid protectionism, the consumer needs to not only believe the product is useful and proud that it’s Australian made, but they need to also be proud in the knowledge the product has been consciously produced where all stakeholders i.e. employees, suppliers, investors, communities, and the environment are at the forefront of its production where they not only become champions of the product and the business but they are prepared to spend more to buy the item than the same cheaper product on the shelf below.
- Kieran Moran is the managing director of Resource Industry Media, a consultancy firm specialising in strategic business communications, engagement and events for the mining, engineering, manufacturing, construction and services sector.