Collaboration: New opportunities depend on it

Collaboration

So what is Collaboration? The first thing it is not is convincing someone to work for you for nothing with the vague promise you will make it worth their while in the long run.

 

Collaboration = Working Together

Collaboration = Working Together

Let’s look at a few formal definitions:

 

  • Collaboration is working with each other to do a task and to achieve shared goals.
  • Collaboration: To work together, especially in a joint intellectual effort.
  • Collaborate: to work with another person or group in order to achieve or do something.

Of these, the first I like best. Shared Goals is a key point for me. And it also supports the idea of each party freely bringing something to the other.

 

Collaboration matters?

Australia has the lowest rate of inter-business Collaboration in the OECD! Seriously!

 

This is a huge problem. And we see it at every level from Federal Politics down to union engagement with enterprises through to the 3 million Small Businesses in the SME sector who are all operating in silos and not working together. I have come to the view that this is one of 2 structural problems in the Australian economy that most prevents us from being competitive. And it is a problem we can’t rely on government fixing. This needs a grass roots revolution since it is attitudes and values based.

 

The above data was put together by Professor Goran Roos based on OECD statistical data. His role as Thinker in Residence in South Australia was to look at how to revitalise manufacturing in the state. And to solve a problem you have to first understand it. And then understand the different possible solution spaces to work in.

 

South Australia Thinker in Residence

Professor Goran Roos

The solution to today’s problems will require better thinking than got us into them in the first place. Albert Einstein. That is probably a paraphrase as he has expressed several versions of this same truth. But the core point, is that more of the same will get you more of the same. To get a better outcome you need better thinking. So for me it is time to think differently. This also leads to Innovation but that is another topic.

 

Albert Einstein

Albert Einstein

So rather than rant I decided to do something to show how we can get beyond the current situation. And was very fortunate to find George Zeidan of Zeidan who are a digital agency that amongst other things can develop custom web API based back ends for pretty much anything and the web and mobile interfaces that go with that.

 

Successful Endeavours have a lot of experience in the design of remote telemetry devices and data loggers. And we had an existing problem. A great water dispensing device that allowed remotely located tank stands to provide water to tankers and record who, when, where, how much and then transport that back over GSM to a back end so that councils can keep track of it. It also had “Over the Air” firmware upgrade capability and “Over the Air” configuration update capability. However the client’s back end was taking forever to build and we had concluded it would never have the features we needed. The web developers were going to kill the opportunity. Another 9 months later and obviously still a problem, George Zeidan and I got talking and decided to Collaborate. 8 weeks later we had a working system with a feature roadmap in place and our first sale.

 

Collaboration between Successful Endeavours and Zeidan leads to a new opportunity

Collaboration between Successful Endeavours and Zeidan

The picture above shows Ray Keefe of Successful Endeavours and George Zeidan of Zeidan, rather like proud parents, with some examples of the internals of hardware devices already supported by the Ritri system. That is the name given to the web API back end product. You won’t be able to do much without a login so leave a comment if you want a demo.

 

The press release for the collaboration effort is available on line at Networking in the Net.

 

Planned future products to be supported by the system are:

 

  • Corrosion protection data loggers
  • Apartment water metering and sub-metering
  • Water Bulk Filling Stations
  • Septic Tank monitoring systems
  • fill in your product idea here…

 

So this is our official notification that if Australia is open for Business, Successful Endeavours is open for Collaboration.

 

Successful Endeavours specialise in Electronics Design and Embedded Software Development. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2014 Successful Endeavours Pty Ltd.

Australian Manufacturing Jobs

Australian Manufacturing Jobs

In some recent conversations it became clear to me that most people I talk to in Australia don’t understand both how large the Australian Manufacturing sector is or how critical manufacturing is to Australian Employment and Australian Financial Prosperity.

 

In Modern Economies Need Manufacturing I cited research by Professor Goran Roos showing the relationship between economic growth, competitiveness, employment and industry sectors. Here is the condensed version covering just the impact of manufacturing on employment.

 

  • There are approximately 1,000,000 direct jobs in Australian Manufacturing
  • There are another 2,500,000 indirect jobs needed to support those 1,000,000 Australian Manufacturing Jobs
  • So there are 3,500,000 jobs in Australia either directly or indirectly dependent on local Australian Manufacture
  • These jobs support another 3,500,000 Australians
  • So there are 7,000,000 Australians dependent on Australian Manufacturing for their financial support

 

So there is the first figure. Roughly 1 in 3 Australians are dependent on local Australian Manufacturing for their financial support.

 

As an engineer, the exact figures tend to be better when you can get them. Fortunately the Australian Bureau of Statistics keeps records of all the required data so here is the more accurate version.

 

The were 11,421,300 jobs in Australia in December 2011 of which 953,500 were in manufacturing so therefore:

 

(1 + 2.5) x 953,500 / 11,421,300 = 29.2% of all Australian full time jobs are dependent on Australian Manufacturing. This is figure 2.

 

With 22,620,600 as the official population we have:

 

2 x (1 + 2.5) x 953,500 / 22,620,600 = 29.5% of the population is dependent on Australian Manufacturing for their financial support. This is figure 3.

 

So this shows just how much we are dependent on a strong and healthy local Australian Manufacturing Industry. Figures 2 and 3 show that both our financial future and employment are critically dependent on manufacturing.

 

Australian Emploment Breakdown by Sector

Australian Emploment Breakdown by Sector

The above graph is created from figures taken from the November 2011 ABS figures for employment.

 

In Australia, the only 3 sectors that create more direct employment than manufacturing are Construction, Retail and Health Care. Mining comes in at 242,400and only 4 of the 19 sectors tracked by the ABS provide less employment than mining.

 

Victorian Manufacturing

In Victoria where I live, manufacturing is:

 

  • the largest economic sector
  • the largest employment sector
  • the largest export sector

 

So there is the 4th figure. Manufacturing is the primary source of wealth creation in Victoria.

 

City Of Casey

City Of Casey

Even in the City of Casey on the edge of Gippsland, Manufacturing is still the largest economic sector. Nationally it is equal third largest tied with mining. Manufacturing is not the small and insignificant industry that the media portrays it as nor governments state and federal treat it as.

 

I am not a disinterested party in this either, and neither should any Australian be disinterested in this. Australia needs a vibrant local manufacturing sector for our economic prosperity to continue.

 

Yes we do need to be smart, and we do have to focus on specific sectors, but we must ensure the economic environment is right to encourage the expansion of local manufacture. Here is the short list we are working on supporting right now in our current project mix:

 

  • clean energy generation
  • energy efficiency
  • electricity grid control automation and power factor correction
  • transport
  • water conservation and recycling
  • biomedical
  • nanotechnology
  • industrial controls
  • scientific instrumentation
  • waste reduction and recycling

 

So this is my pick of where we should focus our efforts based on today’s technology.

 

And for those who want to rely on the Knowledge Economy, Professor Goran Roos has pointed out that it depends on manufacturing since that is what drives most innovation.

 

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

Modern Economies Need Manufacturing

Professor Goran Roos

 

South Australia Thinker in Residence

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 entire 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 structure and relationship. This implies you need both.

 

Hidden Profit Generators

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 measure 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

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 address 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 and 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 © 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