Australia’s capacity to manufacture critical elements of space systems is increasing but from a much lower base than countries with equivalent economies. Key issues for consideration include the focal areas for growth including sovereign capability, the balance of sourcing from domestic markets and international markets, the right size for Australia’s space manufacturing and testing capability, and answering the question of how to sustain this capability in a globally competitive and often distorted market? Other countries use offsets to “protect” national capabilities, but Australia moved away from that policy some time ago. What mechanisms can be brought to bear to ensure Australian manufacturers can compete in international markets? Should a level of Australian content be mandated?

Manufacturing in Australia has been in decline for many years. However, it nose-dived with the collapse of the motor vehicle manufacturing industry in the last decade. In the context of the 2020 Commonwealth Budget a $1.5 billion fund was announced to kickstart manufacturing in Australia focused on six key sectors judged by Government to be areas of advantage or having potential for growth in new and emerging areas. One of these key sectors is space.

There are many challenges facing the overall manufacturing sector in Australia. However, the space and spatial sectors face some specific issues, discussed below.

Workforce

• Shortages of skilled and experienced staff;
• An age profile that is skewed to the young and the old, with a thin band of people in the 35-55 years age bracket;
• Women are grossly under-represented, although several space and spatial industry leaders are women;
• Indigenous people and other ethnic minorities are also under-represented.

Organisations

Universities shoulder a disproportionate proportion of the space sector workload. They also struggle to attract students in sufficient numbers into the disciplines associated with remote sensing. The extent to which the universities will be able to continue to shoulder this load is problematic, given the recent collapse in revenues to the sector and the severe belt-tightening occurring across the sector.

Much of Australia’s space and spatial workforce is employed in government funded organisations, notably CSIRO, DST Group, BoM and GA.

Most private companies operating in the space and spatial sectors are SMEs and start-ups. Many of the start-ups are built around a technology that has been developed by the business owner. The small size of these companies, almost by definition, can limit the formality of many processes that governments and larger businesses sometimes insist upon.

These include, but are not limited to:

• governance arrangements,
• adoption of and adherence to specific quality and other standards,
• cyber awareness and cyber security,
• business continuity and disaster recovery plans,
• IP protection policies,
• succession planning,
• business development and marketing strategies and capabilities.

Research and Innovation

When compared to nations of comparable size and wealth, Australia spends relatively little on research and development across the board. Successive governments have taken a view that if a company needs to invest in R&D to capitalise on a market opportunity, it will find the resources to do so. In recent months, R&D tax concessions policy has been overhauled,
but the new model continues to attract more criticism than support from companies.

Export Potential

High wages, a relatively strong dollar and Australia’s distance from markets in which its manufactured goods may be competitive combine to make the export of goods that are made in Australia difficult to sell overseas at competitive prices.