Taking the leap: research collaboration as a path to industrial innovation

The productivity-enhancing potentials of the technologies associated with Industry 4.0 are becoming increasingly attractive to manufacturers. But where can a small- or medium-sized company go to find the right path forward? We take a look at the benefits of industry collaboration with research institutions.

Media representations of Australia’s manufacturing sector today are often characterised by a curious blend of the old and the new, pessimism and optimism. On the one hand, manufacturing is often associated with the country’s economic past, the post-war period, an era of mass production for domestic markets symbolised most of all by the automotive industry. This was a time in which the manufacturing sector achieved its highest contribution to Australia’s gross domestic product (GDP), hitting 25 per cent in the 1960s, according to statistics from the Productivity Commission. By 2006, this number had dropped to 10.5 per cent; in 2016, according to the World Bank, manufacturing accounted for approximately only 6.6 per cent of GDP. The closures of large automotive manufacturing plants in recent years have, according to a certain strain of media narrative, marked a kind of terminal point. For some, indeed, it has become customary to preface any statement on Australian manufacturing with the qualifier “declining”.

On the other hand, recent trends such as the globalisation of supply chains, advances in digital and automation technologies, and a rising demand for customised, bespoke products, have opened up new opportunities for Australia’s manufacturing sector.

A widely-cited 2016 article co-written by then deputy director and science director at the CSIRO’s Manufacturing Flagship Cathy Foley (now CSIRO’s chief scientist) and CSIRO director of manufacturing Keith McLean, titled “The Australian manufacturing industry is not dying, it’s evolving”, argued that despite the well-publicised decline of some manufacturing sectors in Australia optimism about the sector ought not be diminished.

“The innovation resulting from science and technology, such as automation, digitisation and new materials, has changed the equation of what it means to be a manufacturer. Manufacturing is no longer a basic industry that employs low-skilled workers,” Foley and McLean wrote.

“Over the next 20 years, Australia’s manufacturing industry must transform into a highly-integrated, collaborative and export-focussed ‘ecosystem’ that provides high-value customised solutions contributing to global supply chains.”

And there is evidence that a shift is occurring. The same year in which Australia’s manufacturing sector dropped to 6.6 of GDP also marked the beginning of an almost 3-year growth trend across the sector. From August 2016, the Australian Industry (Ai) Group’s Performance of Manufacturing Index (PMI) indicated expansionary tendencies across the industry. Despite recent difficult economic conditions, only in June this year has the measurement fell below the 50-point mark, indicating a mild contraction in manufacturing conditions and bringing to an end a 33-month consecutive run of growth.

Keeping the sector competitive, and thus enabling its further growth, is now seen as vital by both industry lobby groups and government departments. And it is the productivity-enhancing potential of new technologies and methods associated with name “Industry 4.0” that is most alluring.

These technologies and methods include robotics and automation, artificial intelligence and machine learning, additive manufacturing (otherwise known as 3D printing), nanotechnologies and advanced materials, along with internet of things (IoT) sensor technology and data analytics. According to Foley and McLean, these technologies unlock a greater capacity for more customised approaches to manufacturing, which suits the current Australian environment. “Small to medium enterprises (SMEs) make up 97 per cent of Australian businesses. So customisation is an ideal recipe for Australian SMEs to achieve global reach without the need for producing more goods than their competitors.”

Promising Signs

In recent years, Australia’s federal and state governments have been encouraging the nation’s industrial sectors to transition to these more advanced methods, technologies and processes that, it is hoped, will improve their productivity and competitiveness in global markets.

In the weeks leading up to the federal election this year, the incumbent Coalition government announced that it would establish a $50 million Manufacturing Modernisation Fund, which aims to stimulate a further $110 million in business investment in new technologies and processes. The Fund, the government said, would provide grants to small- and medium- sized manufacturing companies to co-fund capital investments that enable them to scale-up, invest in new technology, and develop new high- value products.

This announced investment builds on the government’s investment of $100 million in the Advanced Manufacturing Fund, its creation of the Advanced Manufacturing Growth Centre (AMGC), and its $40 million in funding for the Innovative Manufacturing Cooperative Research Centre (IMCRC). These organisations, and others like CSIRO’s SME Connect, have been established to help link up manufacturers with Australia’s research sector, and with government grants, to facilitate the adoption of innovative technologies that enhance productivity.

At National Manufacturing Week this year, AMGC NSW and ACT state director Michael Sharpe said that it was vital that manufacturers utilised the pathways towards collaboration with research institutions. “Collaboration is a key driver to become an advanced manufacturer. We need more Australian companies working together, big and small,” Sharpe said. “And we also have to work with our world-leading researchers – we have some of the best researchers in this area and we have to tap into this resource. There is certainly a real growth opportunity for companies to collaborate and work stronger together.”

Sharpe was joined in his call for collaboration by Ai Group’s Mark Goodsell, who said that establishing these connections depends upon establishing trust – something that has, until recently, been difficult. “The starting point of this collaboration story is that it is hard. It is hard because the Australian business culture in the past has not valued it,” said Goodsell. That is, collaboration with research institutions goes against the traditional business models that have been cultivated in Australia. “One of the things we have discovered about the Australian business psyche is that we have tended to value rugged individualism; our economic model was very inward-looking, without much focus on exports; the competition was down the road and you didn’t easily collaborate with them because they would rip you off. So, if you find that your early attempts to collaborate are difficult, there is a reason for that.”

And from the university side, they have not been encouraged to collaborate either, as institutions and as individual academics, as their status comes from publishing information, not giving it to someone else to monetise it. “We’re therefore coming to this collaboration from historically different viewpoints. The good thing is that it is changing, and we know it is changing because we are finding it hard; and we are only finding it hard because we are trying to do it,” said Goodsell.

This requires trust, something that Goodsell said is not easily purchased or gained. He said that Ai Group, AMGC, and other bodies have been trying to make collaboration easier by linking manufacturers to research institutions. “Trust usually comes from experience. But there is a lot of learning going on. Go visit your local university, find out what they are doing, find out what the funding models are, find out whom to talk to – and keep pounding away,” Goodsell said.

Supporting innovation in NSW

In NSW, which produces approximately one third of Australia’s total manufacturing output, generating around $33 billion, the state government is making moves to support the growth of advanced manufacturing in the state. In 2018, the NSW government released its NSW advanced manufacturing industry development strategy, which is targeting the development of high- value, high-skills services in the state’s manufacturing sector, particularly in pre- and post-production processes such as R&D and design.

Alongside supporting access to NSW and Commonwealth funding programs, one of the aims of the strategy is to “[S]trengthen the capacity for industry, government and research institutions to engage and collaborate”. Among the enabling bodies for this collaboration is the NSW Smart Sensing Network (NSSN). Established in 2016 with funding from the state government, the NSSN has particular focus on unlocking the potentials of smart sensor research in manufacturing and other industries, including the infrastructure and energy sectors.

In July, an event showcasing the possibilities of collaboration was held at Western Sydney University’s Launch Pad in Werrington. Co-hosted by NSSN and the NSW Department of Industry, and attended by representatives from AMGC, the federal Department of Industry, CSIRO’s SME Connect team, along with several manufacturers, the event was the first in the latter’s “Successfully Adopting Smart Sensing Technologies” series, which will see similar events held at other partner universities.

Ingrid Marsh, director industry development, NSW Treasury, said that the event was centred around encouraging partnerships between universities and industry by presenting successful examples of such collaboration. “One of the four key areas  that we are looking at with this strategy is advanced knowledge, and this is where we’re passing on that knowledge between universities and industry. More importantly, industry can see that return on investment through that partnership as well, from hearing what the benefits are of that advanced knowledge area,” Marsh said.

“Another area that is of focus today is in advanced processes – we will look at the evolution of Industry 4.0 advanced technologies. Manufacturing has to move, it has to move to that advanced level, and we need to support industry along the way.”

Anthony Morfa, NSSN’s business development manager, said the function of NSSN is to “build a bridge” between member universities in NSW with industry. “Our member universities are basically the strongest and most capable research universities in NSW and the ACT and the research that is taking place at these universities is second to none,” Morfa said. “What our members are actually interested in doing is connecting with industry and understanding the challenges industry face and trying to participate and support industry as much as possible.”

Explaining “smart sensing”, Morfa said that it involves the use of advanced sensors in manufacturing to measure a range of variables, from machine temperature and vibrations all the way to data analytics, extracting the data and interpreting it in ways that add more value. “I think what makes a sensor actually ‘smart’ is the ability to take data, digest it, and then actually make smart decisions with it,” he said.

Across the NSSN there are approximately 550 experts working at over 110 different research institutes and centres in the smart sensor space. “They have specialised equipment, specialised knowledge and can immediately start working on problems with techniques that may not be available to every company,” said Morfa. “The take home message is that if you are producing any sort of data that can help you make a decision, there is going to be a way to collect that information, and there’s going to be a way to understand that with some sort of algorithm or software and to make that process that you’re working on a little bit easier.”

Morfa said that the relationship was a two-way one, with academics also being further propelled forward in their research and understanding. “Researchers want to understand what’s going on in industry as it helps them have greater impact. A lot of researchers are doing research to improve society and improve the economy – it’s obviously very hard to do this if you’re not talking to industry itself,” he said.

Organisations like NSSN or AMGC, Morfa said, serve as a mediating point for companies looking to get involved with research institutions, reducing confusion and making communication between traditionally very different sectors much easier. “What you can start by doing is talking to someone like me or Michael [Sharpe] and explain your problems. It might turn out that you would benefit from some R&D, and we can facilitate better connections with the universities. This process removes barriers because you don’t have to go speak to all the different universities and try and make an introduction yourself,” he said.

“What we do is we work with all of our member universities and try and help them understand what you are dealing with in your business, send out information to all the universities at once, and then put together a list of all the top researchers that we can find that would be able to support something you’re interested in.”

From that point on, NSSN facilitates personal introductions help companies find the most suitable researchers. Morfa also said that it helps businesses understand how they might be best able to commercialise and upscale this research. “One of the wonderful things about being based in NSW is that there’s a huge number of companies that do prototyping, electrical engineering, do everything you might need to take technologies that have been developed at the university and get them ready to be produced here in the state and eventually exported,” he said.

AMGC’s Michael Sharpe also shared the view that helping Australian manufacturers to effectively operate in a volatile economic environment involved enabling greater access to export opportunities. And these, he said, are made more available by getting involved with cutting-edge research and providing innovative solutions. “Everyone said you can’t bend corrugated iron, that it will break or crack or it will crease, yet there is a start-up company here that have done just that and they’re getting ready to export those machines globally,” Sharpe said.

He said that with manufacturing making up around 10 per cent of the Australian workforce, it is still an important sector of the economy. But grasping the opportunities available via research collaboration would help unlock further potential. “Manufacturing is much more than just making stuff – it’s much more than just production. Manufacturing in today’s world means involvement in research and development and unlocking the value of world class researchers. We’ve got some of the best minds right here in Australia, and I’ve been able to take professors out of our great universities and onto the factory floor right across the state. This is also a great opportunity for researchers – they learn something too because we’ve got some outstanding business people manufacturing right across the nation.”

Universities as a launch pad for industry

Western Sydney University’s Launch Pad, established in 2015 in partnership with the NSW government and corporate sponsors, provides facilities, assistance and resources for startup and high growth technology-based businesses in the Western Sydney region.

Dr André Urfer, business development team leader at Western Sydney University’s REDI Business team, said that around five years ago the university decided to make a change in direction towards branching out its research capabilities to industry. “The management at the time said to the researchers, ‘You are empowered and encouraged to go out there and start building research partnerships with industry – including not-for-profits, charities, small, medium, or large enterprises – and work on real life problems that you can provide the research solution to,’” Urfer said.

“The aim of REDI Business is to make it easier for people to engage with the university – it’s really about finding individuals that can work together fantastically on projects. There are networks out there, and Launch Pad and any project you will have our university will eventually come through REDI business. And we’ll help you translate two different worlds, bring them on one page, make sure that budgeting is right, pricing is right and the contracts are right – and off you go.”

Asked how a company might get involved with the university, Urfer said that just beginning a conversation with the university was a good start. “Just get in touch, have a chat together. We can figure out what exactly it is that you need, and I can look internally for the right researchers to come and have a chat with you about the problem and whether there is a solution that is on offer,” he said.

“Other options are at an event like today: if you start talking to a researcher in the audience and that leads to anything more, REDI business will be involved to facilitate that process.”

Among the examples of collaborations between SMEs and research institutions presented at the event was that of LA Services, a specialised welding and fabrication business based in western Sydney. David Fox, LA Services’ general manager, said that the challenges for his company came from being shackled to old ways of doing things. “This business had been going for 37 years and been doing the same thing for a very long time. The question was, ‘How do you shift that?’”

Fox said that the company had to go through a process of learning and understanding how Industry 4.0 technologies and processes could add value to a company working with very old industrial equipment and methods. “I didn’t see how it was going to relate to us. Initially, it was very hard to see that.” Fox said that talking with a variety of academics helped him to expand his understanding of the benefits of new approaches. “One of the ‘Aha!’ moments was when we were told to look upstream and downstream from our products, at areas where we could add further value to what we were already doing,” he said. “Today, three years later, we’re much clearer on how that might work in terms of shifting our business out to different areas that we never imagined and then we could tap into that with a different business model.”

Fox said clarity and concreteness around what Industry 4.0 could mean specifically for his company was important. “For us clarity across the landscape involved a definition of Industry 4.0 that suited us. The possibilities with big data, analytics and digital to physical transfer were the things that were put to us that we could actually hang on to.”