Professor Goran Roos

As well as being the Thinker in Residence for South Australia, Professor Goran Roos is considered one of the 20 most significant thinkers of the 21st Century. This morning he was presenting his views on Australian Manufacturing to a combined breakfast meeting of the South East Business Network and SEMMA.

So what did I learn?

Here is the short list on what manufacturing does for an economy:

• R&D is driven by it
• Innovation is primarily manufacturing related
• Value added exports are usually manufactured
• Creates more indirect jobs per direct job than other sectors
• Many service companies have a manufacturing core
• Is the fastest knowledge growth domain
• Is essential for a highly competitive economy

His primary point is that “A healthy manufacturing sector is a must for any advanced economy with ambitions to maintain both economic and social wellbeing“.

Now he has my attention big time. Because this is something I have inherently believed my entrie working life. Australia needs manufacturing.

Manufacturing creates employment

Next  he looked at the contribution of manufacturing to employment and why we have employment issues in Australia. Yes I know the official unemployment figure is low, but that is because many people looking for work are not included in the official figure. So here is how is pans out for employment:

• For each manufacturing job, there are 2.5 other jobs created around it
• In Australia where there are 1 million jobs in manufacturing, that means there are 3.5 million jobs in total associated with manufacturing
• For each working person, there is a dependent person relying on them for income. These can be relatives, children, spouse etc.
• So in total there are 7 million people in Australia dependent on manufacturing

Now lets look at mining:

• For each mining job, there is another job created around it
• In Australia where there are 200 thousand jobs in mining, that means there are 400 thousand jobs in total associated with mining
• For each working person, there is a dependent person relying on them for income. These can be relatives, children, spouse etc.
• So in total there are 400 thousand people in Australia dependent on mining

So the current government policies and industry practices of reducing manufacturing and increasing mining for direct export are actually economic suicide.

The service industry is even worse for indirect job creation though it does employ more people than mining ever will:

• For each service industry job, there is  0.5 jobs created around it
• The ABS statistics for 2010 show roughly 3 million people working in service industries in total including the 0.5 jobs created
• For each working person, there is a dependent person relying on them for income. These can be relatives, children, spouse etc.
• So in total there are 6 million people in Australia dependent on service industry jobs

What this means is that manufacturing is actually the most critical sector in Australia in terms of job creation and future prosperity.

 So lose manufacturing, and you lose a huge number of jobs.

The USA has shed 5 million manufacturing jobs since 2000, primarily to offshoring manufacturing to lower cost economies. These jobs were replaced by low paying personal service jobs. The net result is record levels of unemployment and a trade deficit in every manufacturing category.

He also spoke of the hidden categories, particularly in industrial products, that lead to high export incomes and have been strength of many European Manufacturers. The following diagram shows the  attributes that make these products possible. Note that 4 are to do with knowledge, and 4 to do with strucutre and relationship. This implies you need both.

Invisible Middle Market

Economic Growth and Competitiveness

Economic growth is a measure of how well you have been doing up to now. It is a meaure of the past performance. It applies to yesterday.

Competitiveness is a measure of how well you will keep doing. It is a measure of likely performance. It applies to tomorrow.

So it is more important for the future to be positioned to be competitive, than it is to have had past economic growth. Ideally you will have both.

Some examples of countries that are highly ranked for competitiveness and also economic growth are:

• China
• Singapore
• Switzerland
• Sweden
• Finland

That was a surprise.  Australia ranks at number 15 for competitiveness and growth according to this analysis. The red line is the frontier of highest competitiveness. Australia is a long way from it.

Future Economic Success

Innovation

Goran Roos also had an interesting take on innovation and this fits in nicely with the view of Edward De Bono on Creating Value. He defines 2 types of innovation that are required to addess Australia’s lack of competitiveness:

• Innovate to create value
• Innovate to retain value

Based on this, offshoring is a really bad idea. It is only done to reduce overheads for cost based activities. For value based activities where we retain the value anhd the income from that value in Australia, we should be onshoring!

Knowledge

Manufacturing is the fastest knowledge growth domain. This is an interesting claim and one that had a case put for it to demonstrate the validity. Here is the case:

• Manufacturing generates 15 times the knowledge that mining does per unit of economic activity
• Manufacturing generates 3 times the knowledge that service industries do per unit of economic activity

Professor Goran Roos also pointed out that knowledge is like a race. If you slow down for a bit, then you can’t catch up if the other runners keep going full steam ahead.

Onshoring

It now makes sense that mining for export is not that great an option. Take something of huge potential value, and give it away at the lowest point you can in the value chain.

Onshoring means we pull value creating back in Australia so we get paid for it. And making stuff, and providing the service industries to support that should be our primary strategy for the future.

The other point Professor Goran Roos made is that Australia is not a scale based economy. We don’t have a large local market by world standards and so we should focus on product categories which do not require scale. Or in my language: lower volume, higher value add products. This is also know as Niche Electronics Manufacture.

Thinker in Residence

His speech on the future of South Australian manufacturing is also worth watching and listening too. Here it is:

 All graphics are Copyright (C) Goran Roos 2011.

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for nearly 30 years.  This post is Copyright © 2011  Successful Endeavours Pty Ltd

We are very excited to announce that we have won another major award. This time it is for the Electronics News Future Awards for 2011 in the category of Industrial Electronics with Best Industrial Electronics Application.

Electronics News Future Awards

In 2011 the awards are followed up by a roundtable discussion on the future of Australian Electronics. As a passionate support of Australian Electronics Manufacturers this is something I would have been keen to attend even if we hadn’t of won one of the awards.

Details on the Electronics News Future Awards categories and the entry process are available at Recognising Innovation.

And our thanks go to our clients, suppliers and supporters for your ongoing faith in us.

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile at Ray Keefe. This post is Copyright © 2011  Successful Endeavours Pty Ltd

Melbourne's South East Finalist Certificates

We were selected as finalists for 2 categories:

• Small Business Award
• Business of the Year – Overall Business Excellence Award

Melbourne's South East

On the night the process was explained to us.  The Councils each put forward either the businesses that were winners of their own local Business Awards or else selected businesses they believed were worthy of winning in the award categories.  The submissions were prepared by the businesses and forwarded by the councils.  A independent committee formed for the purpose then went through those submissions and nominated the finalists. So the first interesting thing I learnt is that our nomination as a finalist came from an independent committee and was not automatic. So that is a win in itself.  We also didn’t know how many finalists there were until the night.  For the categories we were in, there were 10 finalists for the Small Business Award and 9 finalists for the Business of the Year – Overall Business Excellence Award.

There were businesses from 10 councils competing in the awards. Collectively the region of Melbourne’s South East is enormous and on the night some basic facts and figures were presented by Jan Kronberg MLC about the Melbourne’s South East region:

• It houses 58% of the population of Melbourne
• It creates 49% of Melbourne’s Gross Regional Product
• It is the heart of Australian Manufacturing
• There are over 220,000 businesses
• Manufacturing is still the main employer
• Overall, manufacturing as a contributor to GDP has halved since 2000

I already knew that it was the primary manufacturing zone for Australia but I wasn’t aware that half of all the value created in Melbourne happened in our region. That makes it very important that we keep manufacturing going strong.  To this end we heard some encouraging rhetoric about how the Victorian Government was committed to that outcome.  One point made was that Victoria is the only State Government with a Manufacturing Minister and Richard Dalla-Riva MLC is responsible for that. For all our sakes I am hoping that we are going to see some Big “L” Leadership in this area. You don’t see countries like Japan or Germany allowing their industries to go unsupported and while I do agree that there are some things we shouldn’t try and compete in here, there are a lot of products that Australia is ideally placed to produce and export.

City Of Casey

Businesses based in the City of Casey had the largest number of finalists so that is also an excellent affirmation of how proactive and effective the team at the Casey Economic Development Department has been in support and encouraging local businesses. We have certainly benefited from their help. Our congratulations also go out to the other City of Casey businesses that were selected as finalists:

• A Better Dental Care
• Australian Solar Manufacturing
• Botanic Homes
• EcoFuture
• eighty one : fine food & wine

Overall there were 53 finalists nominated and we received 2 of those nominations. The Engineer in me couldn’t help but notice that 53 / 220,000 = 0.024% and since we had 2 nominations we are in the top 0.012% of businesses in Melbourne’s South East. But then we were selected as one of the top 9 businesses overall and so 9 / 220,000 = 0.004%! Given how many excellent businesses there are in the Melbourne’s South East region we feel very encouraged to be recognised at this level.

The councils involved in the Melbourne’s South East (MSE) region are:

• Cardinia Shire Council
• City of Casey
• City of Greater Dandenong
• City of Kingston
• Frankston City Council
• Knox City Council
• Monash City Council
• Maroondah City Council
• Mornington Peninsula Shire
• Whitehorse City Council

We also appreciate the support we receive from the Berwick Village Chamber of Commerce. 

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile at Ray Keefe. This post is Copyright © 2011  Successful Endeavours Pty Ltd.

And here is a picture taken of a Solar Systems concentrated Solar Power Dish. We were involved in software upgrades to the dish controller.  It produced 114KWhr of power on an August day at Fosterville, near Bendigo and this picture was taken on that day.

Solar Systems Dish on sun at Fosterville

Energy Storage

The biggest issue with electricity is that it is hard to store. The Electrical Grid delivers power on demand and manages the generators to maintain the frequency and voltage while delivering the required power to satisfy the demand. Quite a juggling act.  And while there are schemes like the Snowy Mountains Hydro where we can pump water uphill to consume power then let it flow downhills and run turbines to produce power, most power is managed at the generator directly.

Wind Power, Solar Photo Voltaic and Solar Concentrated are the primary renewable energy sources we will look at here, and they all provide a fluctuating supply.  You can’t easily crank them up or down with the demand. So we still need a base supply to do the balancing act.  Depending on our approach, it is estimated that the limit for these fluctuating supply types is between 8% and 30% of the total grid capacity.

Carbon Footprint

This represents how much carbon is releases into the atmosphere for a particular activity.  The top emitters of carbon are:

• livestock, principally sheep and cattle
• power generation
• transport (road, rail, air, sea)
• industrial processes
• land clearing, deforestation and agriculture

In Australia, 50% of our emissions come from power generation as we use a lot of brown coal which also happens to be one of the most polluting ways to generate power on mass. This is followed closely by transport.  So you can see why power generation and transport are primary focuses for improving our carbon footprint.

There are only a few ways to improve this. These are:

1. use less power – which creates the opportunity for more energy efficient devices to be created or alternative ways of doing things such as the use of smarter appliances that conserve energy use or even cooperate with the grid to use power at the best possible time
2. reuse existing energy – heat exchangers in air conditioning systems are an example of this
3. create energy in more efficient ways – new generator technologies or moving from dirtier sources to cleaner sources
4. create energy in ways that does not use carbon, or uses a lot less of it

Because in Australia the creation of electricity is our primary source of greenhouse emissions we will focus on this area for the rest of the article.

Australia is ranked 5th in overall greenhouse gas emissions per capita and we are the highest per capita emitter of the industrialised nations so it is in our interest to develop alternatives to our current high emitting energy infrastructure.  This is also where some major manufacturing opportunities arise for Australian industries.

Australian Manufacturing Opportunities

One of the leading contributors to greenhouse gas emissions is sea freight. So the classic Australian model of digging it up, shipping it overseas and shipping value added goods or materials back is a poor strategy when you consider the greenhouse gases produced. There will be an increasing advantage of doing the value add locally when reducing the total carbon footprint becomes important.

Here are some examples of successful local manufacture of alternative energy products in Australia today.  This is a very cursory list:

• Australian Solar Manufacturing is importing silicon cells and manufacturing complete TUV approved panels in Hallam, Victoria.
• Solar Systems are world leaders in concentrated solar silicon photovoltaics and are putting together the world’s largest concentrated solar electric facility in Mildura.
• Latronics and Solar Energy Australia both locally manufacture grid tied central inverters

Here are some opportunities to consider in the near future.  This is just scratching the surface:

• BP Solar are working with the CSIRO on deep discharge lead acid batteries for use in energy storage for remote solar installations. This will lead to new battery technology and new manufacturing opportunities.
• CSIRO are world leaders in organic photovoltaics and organic semiconductors. VICOSC is established to commercial the organic photovoltaics and there will be many opportunities that come from this initiative.
• Existing mounting and installation hardware for photovoltaics is labour intensive to use. There are opportunities for smarter and more elegant systems to make installation more modular and straight forward. This can work with local or imported panels.
• Most grid connected inverters are imported but there are concerns about both build quality and whether they are all compliant with Australian Standards.  The world market for inverters is set to grow by a factor of 10 over the next 5 years so there are also export opportunities.
• Biofuels will become increasingly more important and there will be many opportunities related to this at both the production and consumption end of the process.

As you can see from the list, there are opportunities in both the core technology manufacture and also in the supporting systems and hardware.

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile at Ray Keefe. This post is Copyright © 2011  Successful Endeavours Pty Ltd.

• Manufacturing
• Retail Trade
• Construction
• Property and Business Services
• Wholesale Trade
• Education
• Health and Community Services
• Transport and Storage
• Finance and Insurance
• Personal and other Services
• Agriculture, Forestry and Fishing
• Cultural and Recreational Services
• Communication Services
• Government Administration and Defence
• Accommodation, Cafes & Restaurants
• Mining
• Electricity, Gas and Water Supply

That is a very diverse range of enterprises to be supporting and reflects Casey’s position on the boundary between rural Gippsland and intensive manufacturing zones in South East Melbourne Innovation Precinct also known as SEMIP. There is a very strong Manufacturing base in South East Melbourne where many of our clients are based. Australian Manufacturing is larger in turnover than mining and Melbourne is the biggest Manufacturing city in Australia.

Ray Keefe has been developing high quality and market leading electronics and embedded software products in Australia for nearly 30 years.  For more information go to his LinkedIn profile. This post is Copyright © Successful Endeavours Pty Ltd.

AMTIL Australian Manufacturing Technology Magazine October 2010 page 16

Successful Endeavours is proud to be a member of AMTIL and encourages other manufacturing sector businesses in Australia to consider membership as well.  We support Australian Electronics Manufacturers through our technology service offerings of Electronics Design and Embedded Software Development coupled with Contract Electronics Manufacturing Services for those clients who want to outsource some of that process but still Made In Australia.

Ray Keefe has been developing high quality and market leading electronics and embedded software products in Australia for nearly 30 years.  For more information go to his LinkedIn profile. This post is Copyright © Successful Endeavours Pty Ltd.

Manufacture Link has recognised Successful Endeavours win as Casey Business Of The Year 2010 in their website news article Successful Endeavours wins 2010 Casey Business of the Year .

Manufacture Link is an initiative aimed at increasing the opportunity for local manufacture by allowing members to create company profiles that reflect their capabilities and to also post requests for quotation so that other members can bid on work they might not have found out about any other way.

We are very committed to manufacture in Australia and in particular we provide Electronics Design and Embedded Software Development for Australian Electronics Manufacturers.

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile. This post is Copyright © Successful Endeavours Pty Ltd.

Successful Endeavours were also joint winners of the Business and Professional Services award for 2010.

And we were finalists in the Manufacturer of the Year category which was won by Jain and Janice Lal at Australian Solar Manufacturing. They make high grade 200W solar panels in Hallam, as good as you can get anywhere in the world, and really deserved their win.  Well done Jain and Janice.

Casey Business Awards 2010

Above is a shot of the Casey Business Award Certificates and also the trophies we received on the night.

And here we are with Casey Mayor, Cr Lorraine Wreford, with the Casey Business of the Year award certificate and trophy.

Ray and Junette Keefe of Successful Endeavours with Casey Mayor Cr Lorraine Wreford - Casey Business Of The Year

Here we are with the joint winners of the Business and Professional Services award, Better Dental Care and a representative of Monash University who sponsored this award category.

Casey Business and Professional Services award

And here is a picture of the 3 award certificates together.

Successful Endeavours Casey Business Awards 2010

And the Casey Weekly (formerly Berwick & District Journal) on 7 September 2010 ran a 2 page special on the Casey Business Awards and this is an except from that covering our win as Casey Business of the Year 2010.

Successful Endeavours - Casey Business of the Year 2010

Below are media releases  and official City of Casey web pages related to Successful Endeavours’ win as Casey Business of the Year and also as joint winners of the Business and Professional Services award.

The City of Casey Business Media Release Successful Endeavours named Casey Business of the Year

The City of Casey official Casey Business Awards page

The Greater Dandenong Weekly 30 August 2010 Company Wired For Top Award

The Casey Weekly Cranbourne 30 August 2010 Wired for success

The Casey Weekly Berwick 31 August 2010 Wired to win the big prize

The Cranbourne News 2 September 2010 Business Backed

AMTIL News feature AMTIL Member ‘Successful Endeavours’ wins 2010 Casey Business of the Year

And we thank our clients and suppliers for being the excellent businesses they are.  This would not have been possible without you.

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile. This post is Copyright  © Successful Endeavours Pty Ltd.

We already let you know that we are finalists in 2 of the 9 categories for the City Of Casey inaugural Casey Business Awards in our post about being Casey Business Awards Finalists. The Casey Business Awards categories we are finalists in are:

• Manufacturer Of The Year
• Business and Professional Services

The news has been picked up by one of our local Newspapers, The Greater Dandenong Weekly, who ran the following article about us and the other finalists.  It is good to see so many strong contenders and our economy certainly needs strong businesses to continue to give both the employment and prosperity we have come to enjoy.

The Journal - Successful Endeavours

Our congratulations go out to the other finalists and we will find out who the winners are on Friday 27th August at the Casey Business Awards gala dinner.

It is good to see the Electronics Design, Embedded Software Development and Low Cost Electronics Manufacture featuring so strongly in the local Australian economy.  We especially note that Australian Solar Manufacturing is also a finalist in the Manufacturer of the Year category and we wish Jain and Janice Lal all the best with their nomination.

Ray Keefe has been developing high quality and market leading electronics products in Australia for nearly 30 years.  For more information go to his LinkedIn profile. This post is Copyright  Successful Endeavours Pty Ltd.