While many have come to regard the demise of Australian manufacturing as an inevitable result of globalisation, there remain opportunities for savvy entrepreneurs to cash in on. In fact, it’s these opportunities – among others – that prime minister Malcolm Turnbull recently sought to promote in lionising an ‘ideas boom’ that would replace our waning mining boom.
Toward the end of last year, Turnbull unveiled a package for investing into innovation and research in business, promising $1.1 billion in grants and tax breaks for those who might consider investing in research and startup businesses. Of course, such a summary glosses over the all-important details of the announcement and since the whole election saga has heated up, elements within the technology and business communities have come to either question or rubbish the coalition’s handling of the entire affair.
Nevertheless, there continues to be bipartisan support in stimulating Australia’s more tech-forward businesses, including manufacturing. For Philip Endersbee, owner of outdoor apparel brand, Wilderness Wear, the promise of research grants that local manufacturers may gain access to are “quite a good incentive for people to have a go”.
Wilderness Wear, which predominantly specialises in Merino-based apparel, has managed to maintain its manufacturing base in Australia while many others in similar categories have moved offshore. In a sense, a shrinking manufacturing base has helped support the remainder, with no shortage of skilled workers to choose from.
“The market is going to continue to have skilled operators coming out of the car industry and other related fields – they’re talking about some 200,000 people,” Endersbee said. “Anyone willing to take a calculated risk and start a business that employs these people could do quite well.
“There’s no doubt that startup capital costs for getting into the local manufacturing is a bit of an impediment, but one of the things that we do have here are skilled technicians and on a global basis, I would say, competitively priced, skilled technicians.”
So, there’s an argument to be made for innovative manufacturing in Australia, but what about identifying a market for the resulting products? In the case of outdoor gear and apparel, the deputy head of Industry Engagement at RMIT’s School of Fashion and Textiles, Kiri Delly, believes would-be entrepreneurs should consider the specialised, higher end of the market.
“There are consumers that think a five-dollar pair of jeans is a bargain and who aren’t that concerned with how those jeans were made, or by whom. Then there are those that do want to know the story behind the product and are keen on transparency. And there are also those who research and are keen to purchase the best product for their specific needs and are willing to pay for it. As long as the customer understands the reasons behind the prices being charged, such as the fabric benefits, fit, comfort, performance and other innovative features.
“Businesses that can offer short and quick runs, customisatiion and specific solutions to meet end user needs will have great opportunities. And with export markets now growing in Asia, Australia’s not so far away as to be unable to provide competitive product.”
It is this very concept of niche manufacturing that has some traditional business owners scratching their heads, as manufacturing is traditionally only profitable at a certain production scale. While this is a problem any new outdoor apparel manufacturers may face, neither Delly nor Endersbee see it as insurmountable.
“Catering for niches may seem like reducing the market opportunity, but this is the direction many brands are taking,” Delly said. “They may cater for multiple audiences, but they will still have a specific target customer in mind so as to ensure they stay on-brand and the customer can understand what they’re about.”
Endersbee, who has experience working with police, fire and defense services highlights the fact that the trend in uniforms today is “to be virtually capable of offering off-the-shelf, tailor-made outfits”.
“So the idea of being able to do short runs and offer something a little bespoke is certainly the go. And for that kind of service people are certainly willing to pay a premium because you’re not going to have someone in an unusual size waiting up to six weeks for their technical (OH&S) corporate clothing.”
Kiri Delly’s Tips for Would-be Apparel Manufacturers:
- There are some amazing fabrics and fibres being developed overseas where they have considerable scale and support, so Australian businesses need to ensure they stay abreast of innovations and keep their products relevant.
- Labour costs may be somewhat competitive, so business operators need to look at other efficiencies and ensure they understand the legislation around using out-workers and contractors to ensure safety and legal pay conditions.
- Product design is well-catered for in Australia, entrepreneurs instead need to pay greater attention to developing business, production, branding and the financial areas of the businesses in order to succeed.