We don’t throw zillions of dollars at multi-national car manufacturers any more, but it looks like we can still make quality goods in Australia.

From the ABC:

First Aussie-made COVID swabs reveals manufacturing pivot

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Posted 46mminutes ago, updated 32mminutes ago

They are a crucial frontline tool in the fight against coronavirus, and now one Sydney company has joined the fray, becoming the first to sell Australian-made medical swabs.

Key points:

• An Australian company is first to sell locally-manufactured swabs
• The pandemic presents an opportunity to transform Australian manufacturing
• There are calls for government to fund more research and development

The development was the latest example of industry ingenuity as the Australian manufacturing sector adapts to the pandemic, as well as strengthening the case for more government support for research and development (R&D).

When Howard Wood co-founded 3D Printing Studios seven years ago, most of his business came from producing models for the construction sector.

Demand was steady, but hardly booming.

Recently, he said, something started to shift; more companies were coming to him for locally manufactured products.

“A few companies who do get stuff done in China are now using us to produce their parts,” he said.

Gap in market for Aussie PPE

As the pandemic exposed Australia’s reliance on overseas imports for essential medical supplies, Mr Wood saw a gap in the market for personal protective equipment.

He tried making face shields but found more success with swabs, after locating a design online from the Harvard Medical School.

Months of discussions with health departments and the Therapeutic Goods Administration are starting to bear fruit.

This month, the four-person company landed its first customer, with the Northern Territory Government placing an order for 10,000 swabs.

Mr Wood said it marks the first sale of Australian-made swabs in the country.

“We are thrilled, the prospect of producing this is very exciting,” he said.

Mr Wood is also in discussions with the Victorian and South Australian governments over orders of up to 1 million swabs, and has received a positive response from Sydney’s Westmead Hospital.

“They were very pleased with what we have produced,” he said.

The deals would more than double Mr Wood’s business.

He is already recruiting six more employees, with plans to move into a larger space and install a second printing machine.

“There are international opportunities in New Zealand and South East Asia, but we have enough to get on with in Australia for now.”

3D Printing Studios is the latest in a series of smaller companies to take advantage of the new landscape.

Gin distilleries have been producing hand sanitiser and other 3D printing companies have started making crucial components for ventilators.

Nation ‘lagging behind’

It is the kind of growth those in the manufacturing sector have looked for after a long period of decline.

Australia imports more medical supplies than it exports by a ratio of 7:1 for diagnostic equipment, and 2:1 for instruments, according to the Australia Institute.

The combined trade deficit in those two sectors was around $2.6 billion in 2019.

The pitfalls of that reliance on imports were exposed earlier this year, prompting calls for a national rethink on the future of local manufacturing.

Emeritus Professor Roy Green, from the University of Technology Sydney, has seen many local companies fold trying to compete with imports.

He said the COVID-19 pandemic was an opportunity to turn the sector around, with the right governance.

“We have ended up with only 6 per cent of our GDP constituting of our manufacturing compared with 15 to 20 per cent elsewhere in the world.

“This is important not just to supply local needs, but it also contributes to the industries across our economy.”

Professor Green said investment in research and development is crucial to making a change.

“The decline in our R&D [research and development] spending as a country has dropped in the last few years to 1.79 per cent of GDP, whereas the OECD average is 2.4 per cent,” he said.

Next week, a Senate Committee is expected to report its findings on whether to cut tax incentives for R&D by $1.8 billion.

Professor Green said the incentive program was not perfect, but cutting funds sent the wrong message at a time when more investment was needed.

‘Integral part of growth’

Federal Minister for Industry, Karen Andrews, said the Government has committed around $9.6 billion for R&D in the last financial year.

“Growing manufacturing in Australia is critical to our economic prosperity and to creating well-paying jobs,” she said.

Professor Green said many will be looking to the federal budget in October for signs the Morrison Government is “serious” about transforming the sector post-COVID.

But Mr Wood is already pushing ahead with plans to begin manufacturing a wider variety of medical equipment.