By Holger Dielenberg
On Thursday 10th of May I gave a presentation with designer Philippe Guichard at the HUB Melbourne co-working space as part of Melbourne Knowledge Week. The event grows every year and is becoming an important way for Melbourne to express its vision and question its place in the world. A barometer of our minds.
We presented the basic idea that Australia – in particular Melbourne has all the right ingredients to be a world leader in design and innovation. I love Aussie battlers and I felt honoured this year to beat the drum for them.
Have a listen to our Melbourne Knowledge Week podcast – Australian Made has a New Heartbeat.
Manufacturing in Victoria is now a $27.7 billion industry and home to more than 13,000 businesses which employ 286,000 women and men and – making it one of the state’s largest providers of full-time jobs. And the 2016 Australian innovation systems report claims that Australia’s rates of entrepreneurship and attitudes towards entrepreneurship are high relative to other countries.
But manufacturing startups are being left out in the cold!
In November 2017, ‘The Martec’ listed 40 Aussie startups to watch. They were all Information Technology related. They did not list one single manufacturing or physical product related business – even though thousands of designers and micro manufactures are ready to start business every year.
This is a common trend where innovation and startup activity is recognised only through an information technology lens and direct funding support is aimed only at medium sized and established enterprises.
Here’s another disturbing trend hampering makers in Australia – Emerging designers represent the highest growth potential for our industries and yet they have the lowest access to advanced manufacturing technology. Government like to claim that Victoria is the centre for advanced manufacturing, and they’re correct… But these capabilities are found locked inside educational facilities and large corporates where startups cannot get access.
It’s easy to claim policy successes by applauding the establishment but it takes guts to support young enterprise. The thing is when you crunch the numbers and take a long term view, you see how supporting the grass roots can pay off. So let’s look at how and why we have what it takes to be global innovation and design leaders and why Australians should invest in manufacturing startups.
Only 4.8% of the 800 startup founders surveyed by Startup Muster in 2017 identified with advanced manufacturing and of the 152 co-working spaces and business incubators identified by Invest Victoria, only a couple cater to physical product developers.
While Australian industries and our Government continue to overlook manufacturing startups, a Sydney firm Grad Connection are identifying strong demand for support in this area. They have identified over 2,000 industrial design and product related engineering students graduate in Melbourne every year. Many product development entrepreneurs also drift from professional employment and other disciplines into product startup activity. This brings the overall potential cohort of physical product development startups in Melbourne to around 3,000 per year who aren’t being supported properly.
At Space Tank, our experience shows that many designers within the annual emerging cohort want to commercialise their intellectual property, but they are unable to because they cannot afford the right resources. Many also cannot raise capital in Australia because local investors are too risk averse and so they go to America and pull $10 mill in a week. Boom. No wonder the USA is pumping out tons of new innovations and we aren’t!
Helping only 1% of the product design cohort to commercialise intellectual property can return millions of dollars to the Victorian economy and provide a significant boost to manufacturing industries.
When you look at what Melbourne has to offer in terms of our ability to design and make a difference to the world of new product development, the conclusion is – thank goodness we’re not building cars anymore because building a design economy has so much more growth potential.
Melbourne is positioned to capture strengths in engineering, information technology, energy and medical research. Its creative sector is flushed with designers and product developers and the city boasts the largest population of creative talent per capita in the southern hemisphere. It supports strong industrial precincts and enjoys proximity to strong business and financial sectors and world class universities. In recognition of these strengths, local and State Governments are realising they must stem property development as this pushes manufacturing out of town and causes a brain drain. The chips are stacking in our favour!
Almost every year for the last decade, new advanced materials have been coming out of labs and opening new ways of doing things. New apps are being developed that are changing the way we work, travel and communicate. In addition, advanced manufacturing technology just keeps getting cheaper and cheaper. Dig deeper and you find most of these developments stem from Europe or America. Never from Australia. Once we stop finger pointing and reaching for excuses, we can realise that from a manufacturing and business point of view, there is actually nothing stopping us from doing the same.
Global trends in leading economies like Germany and America support these conclusions, demonstrating that investing in emerging businesses pays off big time and provides new life blood to stagnating industries. China is focusing less on its position as the world’s factory and is planting its foot on a new economic accelerator – Mass Innovation driven by hungry investment at the grass roots level.
Australian people must accept that the ‘tyranny of distance’ is an obsolete excuse and there is not a thing stopping us from competing at the very top of the value chain.
So – here’s to Melbourne Makers, supercharging our economy one business at a time.