Driving change
There is a saying, purported to be a Chinese curse/proverb that states "May you live in interesting times". We, as business owners and operators in one of the lesser-valued manufacturing industries in Australia have been doing this for a number of years. Dominic Beirne argues the current global economic turmoil is only exacerbating the "interest" for us.
In recent months our industry has seen the report from the TCF Review handed to the federal government, and a number of critics of the report have made their opinions known in this column. I would like to address their comments and add the Australian Fashion Partners (AFP) perspective on what we see as the important issues facing our industry.
There have been a number of calls for increased funding of TCF businesses as the sector "employs more people than the motor vehicle sector". This ignores the reality that as an industry we are not regarded as highly as the motor vehicle sector because we have little or no large scale manufacturing to point to and, since 1983, have essentially responded to the competitive climate thrust upon us by moving our own skills and competencies to offshore trading partners instead of valuing and retaining them here.
The TCF review report recognises this.
Our own previous shortsightedness and individual chasing of profits at the expense of the entire industry has fractured our ability to identify our needs, with a whole of industry approach. It has also developed an inbuilt distrust of collaboration, co-operation and support resulting in intense competition for scarce resources and a further fragmentation of our skills base and voice.
It is time for this to stop.
The report provides a mechanism for both new entrants to the industry and existing businesses to:
thereby growing the value of the sector to government and our trading partners, both domestic and international. The report has recognised, and planned for, a new shape of our industry - one built on design excellence, a niche market and high value manufacturing - not the mass market.
Something that appears to have been overlooked by most commentators is the global nature of our industry. We were one of the first to deal with a lowering of tariffs and the introduction of cheap imports. The TCF industry has adapted amazingly well in the space of 25 years and we now have global market leaders occupying a number of different links in the supply chain.
Clearly explained in the report is a framework to ensure our ongoing competitiveness and the creation of a first-mover advantage in ecologically sound and ethical labour practice sourcing options, both concepts championed by AFP in its submission. The Australian Quality Mark framework and the standard sizing program combined have the capability to make it progressively less viable for large-scale offshore manufacturers to cost effectively produce for our market. This creates a niche for local designers and manufacturers to fill and may even result, with the appropriate regulatory regime and ongoing enforcement, in the removal of some products from our shelves revitalising local manufacturers.
Would we like to see more funds made available to the industry, specifically under the TCF Small Business Program? Yes we would. Do we think it is going to happen, for this and other programs? We aren't holding our breath, even with the increased government spending across other industries. It is time the multiple special interest groups and individuals, with their vested interests, stop pushing their own agendas and started to take a look at their operations under the new competitive environment we are facing.
Our view is that the TCF Review's report is appropriate for the new competitive environment we are facing. It recognises the changes to the industry since the commencement of trade liberalisation under the Button Plan of the 1980's and incorporates some of the changes we must embrace to ensure ongoing future competitiveness in a global environment marked by price competitiveness.
Let's take a look at our operations, all of us, and see how we can mobilise and access the support of a government that has the unenviable task of ensuring all Australians, both individual and corporates, come through the current economic climate in as good a shape as possible. It is up to us to create a new industry paradigm that works on mutual support and growth. We will compete with each other, for increased sales at the individual business level, but we must also co-operate, at an industry level. We must embrace the concept of "Co-opetition" across the board and build partnerships, explore new ways and be prepared to learn from those who are more experienced or possibly more dispassionate about courses of action.
Australia's TCF industry, at all levels, is capable of moving into new market sectors and re-developing the skills we need. The federal government has provided previous financial support and is able to provide further financial and logistical support, if the report's recommendations are accepted, to allow all businesses in the sector to improve. It is now up to all of us to make that happen.