How much for retail manufacturing?

warehouse copyAs the Australian car manufacturing industry spluttered its last gasp, Bill Shorten announced that – should his Labor government ever be elected into power – he would establish a $1 billion dollar investment fund for new initiatives in car manufacturing. Let’s be clear here. Australia has never had a competitive edge in the manufacturing of new cars for the mass market. It is also an industry that directly employed – at its peak – less than 100,000 Australians.

Outside of the government sector however, retail is the largest employer in Australia. Retail manufacturing which – prior to the deregulation of the footwear, clothing and textiles system – cultivated uniquely Australian products, brands and businesses that had a genuine source of differentiation, has since almost entirely vanished with the influence of global sourcing. The remnants of that time can still be seen in the tannery and boot-making operations of RM Williams in South Australia.

With our domestic retail brands increasingly being dragged into the tumultuous world of international competition, the vast majority will fail because they are pale imitations of the very brands they are now being forced to compete head on against. Australian retail business must reignite product development that leads to consumer acknowledged differentiation or they are dead. Manufacturing is one of the most critical parts of that differentiation.

So my question is simple. Mr. Shorten – how much will you put into an investment fund to re-establish an Australian retail manufacturing sector that has a real chance at taking on global competition and winning?

Fashion is the obvious example. We have unique raw material such as Kangaroo leather and Merino wool. Our raw Merino bales for example are recognised by Italian mills as the best input in the world. They buy the unrefined wool from us at less than 5 per cent of the price that we buy back the finished material to use as an input to products we have made in Asia. Imagine what would happen if we took the raw materials that are unique to this country and added value through the production process.

We have thousands of skilled seamstresses and garment finishers sitting under-employed in pockets throughout the major capital cities. Re-igniting a manufacturing industry here that can compete on the world stage is a very real possibility. That will also in turn fuel real Australian design with our army of talented designers who today aren’t allowed to really design. They ‘specify’. But it will take leadership, support and de-risking through government investment and tax incentives. This is an area of manufacture that we could actually become a global leader at – again.

Rather than statements that are solely used to create headlines, we need political power to be leveraged to initiate the changes we need to reinstate the latent power that a commodity rich, creatively lazy economy has under-exploited. We have the talent. We have all the necessary inputs. We need leadership, support, capital and a cultural change that will nurture an industry that could re-establish Australian retail manufacturing not only as a major employer and generator of economic significance but be globally recognised as being at the forefront of innovation, quality and uniqueness.

Peter James Ryan is a retail expert and head of Red Communication. 02 9481 7215 or [email protected].

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