In the third episode of THE LEAD ICON PODCAST, host Dijana Dragomirovic sits down with Joe Hernandez, CEO of Precision Electronic Technologies, to discuss the state of Australian manufacturing. From his personal journey of resilience to his vision for the industry’s future, Joe provides a thoughtful perspective on the challenges and opportunities facing manufacturing in Australia. Here’s what we learned from their conversation.
Building Precision: A Story of Resilience
Joe’s journey into manufacturing is a testament to determination and leadership. After purchasing Precision Electronic Technologies with a co-partner through venture financing, the business nearly collapsed. When his partner left, Joe took full control, doubling down to transform the company into a thriving operation. His story highlights the importance of persistence and adaptability in navigating the ups and downs of the industry.
The State of Manufacturing in Australia
Australian manufacturing, once a major contributor to the economy, now accounts for just 5% of GDP—down from its peak of 50%. Joe points to short-term government policies and a lack of long-term vision as key factors in the sector’s decline. “Advanced manufacturing is essential for the future,” he says, stressing the need for a strategic shift to support innovation and ensure global competitiveness.
Lessons from Policy Missteps
Joe reflects on the policy changes that have shaped the manufacturing industry over the decades. From economic liberalisation in the 1980s to the prioritisation of mining over manufacturing, these decisions left the sector vulnerable to global competition. Unlike countries such as Germany and South Korea, which heavily invested in research and advanced manufacturing, Australia has lagged behind. Rising energy costs and inconsistent policies have further eroded the industry’s strength.
The Future of Australian Manufacturing
Despite these challenges, Joe remains optimistic about the future. He sees automation, digital transformation, and a focus on advanced manufacturing as crucial to revitalising the sector. By fostering local supply chains and addressing skills gaps through STEM education and upskilling programs, Australia can position itself as a leader in high-value manufacturing.
“We need to rethink how we approach manufacturing—both as an industry and as a nation,” Joe says. Emphasising the importance of resilience and innovation, he believes Australian manufacturers can regain their competitive edge.
Digital Transformation: Balancing Costs and Growth
Joe highlights both the opportunities and challenges of digital transformation for Australian manufacturers. While technologies like automation and AI can boost efficiency and competitiveness, high upfront costs, skills shortages, and integration challenges often hold businesses back. To overcome these hurdles, Joe recommends:
Starting with small, incremental technology upgrades.
Accessing government grants and incentives for modernisation.
Collaborating within industry hubs to share resources and expertise.
Specialising in niche markets like renewable energy and medical devices.
Building a Sustainable and Competitive Sector
Revitalising Australian manufacturing requires a long-term, bipartisan strategy. Joe outlines several critical steps, including:
Investing in Advanced Manufacturing: Embrace robotics, AI, and IoT to improve productivity and compete globally.
Developing the Workforce: Equip workers with the technical and digital skills required for modern manufacturing.
Promoting Sustainability: Support green manufacturing practices and renewable energy adoption to reduce costs and environmental impact.
Strengthening Local Supply Chains: Incentivise reshoring of critical industries to ensure resilience and stability.
Enhancing Collaboration: Foster partnerships between businesses, universities, and startups to drive innovation.
A Stronger Voice for SMEs
Joe believes that small and medium-sized enterprises (SMEs) must advocate more effectively for their needs. By forming coalitions and engaging in public-private partnerships, SMEs can amplify their influence and help shape policies that support their growth.
Joe’s Predictions for the Future
Looking ahead, Joe predicts a mix of opportunities and challenges for Australian businesses:
The Rise of Automation: Advanced technologies will reshape the industry, requiring businesses to adapt quickly.
Energy Transformation: As the world transitions to renewables, Australian manufacturers must embrace sustainable practices to remain competitive.
Global Competition: Increasing globalisation will raise the stakes, making innovation and agility essential for success.
This episode of THE LEAD ICON PODCAST sheds light on the urgent need to revitalise Australian manufacturing. Joe’s insights offer a clear roadmap for leveraging innovation, fostering collaboration, and building a more sustainable and resilient industry.
As Dijana notes, “Manufacturing is about shaping the future of our economy and communities.” With leaders like Joe championing change, there’s hope for a brighter, more competitive future for Australian manufacturing. Stay tuned for more episodes of THE LEAD ICON PODCAST, where we continue to explore the stories and ideas shaping industries and inspiring progress.
Watch episode 3 of THE LEAD ICON Podcast below.
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