Australia’s manufacturing industry has continued to decline this year, with the local car industry due to completely disappear from local shores by 2017.
Firms located in Australia’s manufacturing heartland, particularly in Victoria and South Australia, have been urged to change or risk experiencing the effects of this economic structural shift.
Tony Macvean, managing partner of Hall & Wilcox Lawyers, argues firms can minimise any potential damage if they modify how they deal with clients and the way in which they are run.
Macvean lists technology and efficiency improvements as examples, including document automation systems, virtual workplace technologies that remove the need for expensive premises, client extranets and more effective communication tools.
However, Macvean also believes that while manufacturing has diminished the news isn’t all bad as new sources of investment are opening up.
“There is a lot of inbound investment from Asia which is very competitive. There are lots of places where high-net-worth businesspeople or sovereign funds from Asia can invest,” Macvean told Australasian Lawyer
In order for firms to attract their share of the money Macvean argues that firms need to improve by adapting and being more flexible.
“We need to have language skills and we need to understand different cultures and people who might do things in a different way,” Macvean added.
Macvean likens Australia’s declining manufacturing fortunes to similar trends that have occurred in other developed markets overseas.
“In recent decades, New York and London experienced a massive shift away from manufacturing and towards high value services. Almost every western city is experiencing a shift.
However, he claims Melbourne is one city that can withstand the economic headwinds.
“There are signs that Melbourne is well equipped for the transition, becoming a hub for services and brainpower – as well as a leader in sectors such as funds, education and bio technology.”
Macvean said although the economy is in transition, there are many opportunities for professional services firms more broadly if they are nimble enough to service diverse industries.
“We are seeing real growth opportunities in the knowledge and services economy. Areas such as health, science, medical research, technology, finance and funds management, education and other high value-add services are growing,” Macvean said.
By quickly moving to work with clients in these sectors, Macvean believes firms can bypass a post-manufacturing slowdown.
“Firms need to understand and be up to date with their clients’ business and industry so that advice given to clients is relevant to what is impacting their business now or possibly in the future,” Macvean said.
Firms must radically overhaul their practices and be ‘Asia-ready’ to succeed in Australia’s post-manufacturing economy, claims a Victoria-based managing partner.