Sunday, August 09, 2020

Australian ‘factories of the future’ offer glimpse of Thailand 4.0 potential 

Jun 25. 2019
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By David Chuter

Every day, in Thailand and in my home country Australia, we are hearing that the fourth industrial revolution is upon us. Industry 4.0 refers to digitalising value and supply chains – integrating in real time people, machines and things.

Business executives, policymakers and academics are talking and thinking about the real and imagined benefits that digital technologies – such as the internet of things and artificial intelligence – can deliver to our economy. It will change the future of work and society. 

Unlike industrial revolutions of the past, the significance of Industry 4.0 is being recognised as it unfolds. Now is the time firms, governments and research institutes must seize the opportunities it presents, or be left-behind. 

To ride this industrial 4.0 wave, businesses should focus on how to use technologies to create value for their customers rather than only focusing on what the technologies do. Turning data into information is one thing but turning it into money is what counts. And if you apply digital to a broken thing, all you will get is a digital broken thing. Digital itself is not the solution, but with innovative business models and strategies driven by ambitious leadership, transformational opportunities have never been more possible. 

Revolution in the making

Australia, unlike countries such as Thailand and Germany, does not have a specific macro and government-led 4.0 strategy, but that doesn’t mean we haven’t seized the digital opportunity. Australia’s digital services and goods are now our fourth largest export. 

Australia’s approach, as with most of our industry policies, has been to create an enabling environment to foster the growth of a digital industry and encourage organic adoption of the technologies by other sectors. The Australian government established an Industry 4.0 Advanced Manufacturing Forum that brings together industry groups, universities, labour unions and policymakers to discuss how to catalyse innovation and the uptake of Industry 4.0. My organisation, the Innovative Manufacturing Cooperative Research Centre (IMCRC), is one of many actors to do just that, specifically in the advanced manufacturing sector. 

The IMCRC is an independent and industry-led organisation that receives grant money from the Australian government, which we invest in manufacturing research projects that industry conducts in collaboration with universities. We support projects that will deliver new advanced manufacturing processes and commercial business models through the use of digital technologies to create factories of the future. As one example of the 25 projects we have funded to date, the IMCRC is supporting an Australian minerals processing firm, Downer Mineral Technologies, which is working with the University of Technology in Sydney to create ground-breaking, large scale 3D printing of spirals and equipment to more efficiently separate minerals. This uses real time data and performance monitoring, designed to deliver genuine productivity improvements in the mining sector and to enhance overall competitiveness. Advanced manufacturing has broad reach across many sectors in Australia. 

IMCRC’s business model delivers research multipliers. The government cash contributed by the IMCRC is matched by industry cash, and when all project investment costs are considered, the CRC’s investment generates a total research value of at least five times the government investment – and this does not included the additional economic benefits that will be delivered when the research is commercialised. To date the Australian government has funded around 225 CRCs that have generated in excess of 7.5 billion Australian dollars (Bt160.7 billion) of net economic benefits, representing a return on the government’s investment of 300 per cent.

When I worked in Thailand four years ago in the manufacturing area, the digitalisation story was only emerging. On a recent visit to Thailand, I clearly saw that Thailand was embracing the fourth industrial revolution through the Thailand 4.0 strategy and – like Australia – Thailand has risen several places in the most recent (2018) Global Innovation Index. Governments will steer their economies through the digital transformation using different approaches, but there is real value in international collaboration to share experiences, know-how and capabilities. Australia already has a strong commercial relationship with Thailand – we are among each other’s top 10 largest trading partners. There are many real opportunities to strengthen existing business-to-business, government-to-government and university-to-university links. We know why we need to digitalise and we know that technology is key to our future. But we must be smart, creating the right environments, including regulatory, that will allow us to use technology intelligently to innovate our business models. 

Being amid a revolution can be daunting, but the journey is exciting. Our challenge is to explore how to best utilise digital technology, focusing on innovation and delivering both commercial and broader economic and societal outcomes, and not just focusing on digital as a destination. 

David Chuter is the CEO and managing director of the IMCRC, based in Melbourne, Australia.

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