Manufacturing into the future - Adelaide Thinkers in Residence - SA ...

Summary ofKey FindingsThis section is a summary of Professor Roos’ key findings as an Adelaide Thinkerin Residence. It provides an assessment of the current state of manufacturingin South Australia and internationally, outlines the thinking and the rationalebehind Professor Roos’ recommendations and identifies the opportunitiesfor the development of the manufacturing sector and longer term economicgrowth.A full discussion of Professor Roos’ key findings can be found in theManufacturing into the Future Report, available online atwww.thinkers.sa.gov.au.1.1 Manufacturing, or the business of making things,is a critical component of any advanced economy• It is the biggest spender on applied research and innovation withspillover effects into the rest of the economy• It is the key driver of productivity improvements• It makes up the biggest share of world trade and is critical forexport earnings• It is the largest driver of high value services• It is the largest generator of employment, with each job inmanufacturing generating on average, between two and five jobsin the rest of the economy.1.2 The importance of manufacturing has been realisedby all advanced economies, if not before, thensince, the global financial crisisS U M M A R Y O F K E Y F I N D I N G S• There have been several calls to action in both Europe and theUnited States. The shift to global manufacturing and a lasting lackof concern for the health of the US manufacturing sector has ledto the loss of five million manufacturing jobs in the US since 2000.Close to half of all manufactured products sold in the US today areimported; the country exports only a quarter of that volume (forwhich a large share of the input is imported), which has led to ahuge, persistent, and growing trade deficit that has reached 11 %of GDP.• The countries that have recovered best from the global financialcrisis are all based around high value-added export orientedmanufacturing (Austria, Denmark, Finland, Germany, Netherlands,Sweden and Switzerland). These European manufacturing beltcountries are all doing well in spite of the Global Financial Crisis andthe Euro Crisis.• Chinese growth is also primarily based on manufacturing, of whicharound 15% is exported.GÖRAN ROOS : MANUFACTURING INTO THE FUTURE5