Embracing the opportunities of Industry 4.0 in northern Australia

High school economics taught us that scaling up improves efficiency and reduces costs. There’s intense focus right now in the Northern Territory on tapping into large-scale solar and renewable hydrogen, large-scale gas exports and large-scale agribusiness. But the roadmap to achieving large-scale success is based on outdated thinking.

Achieving projects on a large scale or an even optimal scale is more important than ever, and is dependent upon embracing digitisation, integrating data and adopting artificial intelligence including machine learning.

While there are industry strategies aplenty, at best they continue to emphasise ‘Industry 3.0’ solutions. For example, the Queensland cattle sector says that industry scaling is dependent on transport infrastructure and services. Likewise, the NT has argued that ‘quality roads are essential for both economic and community equity outcomes’ and that NT-wide ‘collaboration to gain scale will improve efficiency [and] reduce costs’.

Those observations are helpful, but they lack the vision and the impact to drive large-scale change.

The fourth industrial revolution—Industry 4.0—will transform production and manufacturing not just by offsetting labour costs and distances to market but also by providing access to value-add markets and modernising supply chains. Industry 4.0 will enable integration and better management of horizontal and vertical value chains through, for example, integrated data management and analytics.

Economic prosperity is dependent on understanding the potential of Industry 4.0 today. Governments and businesses need to go beyond adopting ‘Industry 4.0 technologies and ways of working specific to the needs of their business’ and move towards adopting Industry 4.0 enablers. These include embracing rising data volumes, computational power and connectivity; adopting emerging analytics to inform business intelligence; creating new forms of human–machine interaction; and improving the transfer of digital instructions to the physical world.

The current trend, however, is to focus on micro-level challenges. For example, workforce challenges such as access to trained staff, the ageing workforce, digital literacy, and attraction and retention strategies are often highlighted as barriers to scaling. These are all important issues but miss the point. The future of work and the future workforce are also considered, but generally in the context of something that will happen later. In large part, the future workforce is employed by organisations today. There isn’t a new workforce waiting in the wings that will arrive next year, in five years or even in ten years’ time complete with a new set of digital skills and capabilities. There won’t be a wholesale turnover of the workforce because not everyone has the financial means to stop working or is of ‘retirement’ age.

The NT’s mining sector is one of its largest industries and employers. However, no new major mines have been established since 2005 despite strong global demand. Finance, scale and access to markets have been identified crucial hurdles to success. While refining and processing minerals and metals for export moves Australia up the value chain and is likely achieved through increased automation, more can be done to take full advantage of Industry 4.0 opportunities.

Likewise, strategic location and land mass are the prevailing reasons used to focus the national security and defence sector in the north. Those are all important aspects, but merely ‘focusing’ on the sector won’t bring the projected 7.3% increase in the NT’s share of the sector’s economic activity by 2030.

Agribusiness is also projected to develop at scale and contribute to the NT achieving its target of a $40 billion economy by 2030. Sector growth will be achieved through ‘coordinated effort using a combination of Sustainable Development Precincts and the Master planning approach as well as value adding opportunities’. However, measures to facilitate reimagining a different operating model are also required.

The NT is says it’s ensuring its economic reconstruction is on track by maintaining critical levels of engagement and partnership with industry. That’s all good stuff but still not enough.

And scaling doesn’t necessarily mean building more traditional infrastructure. My recent Strategist article focused on the need for Australia to pick up the pace on innovation. I used the example of SPEE3D, which has developed a world-leading 3D printer that can rapidly manufacture components in a variety of different metals and alloys. Last year, the NT government invested $2.75 million for SPEE3D to establish its research and development headquarters in Darwin. The company’s big success is in reimagining metal parts manufacture and developing a technology that made it easier and much faster.

When I read the myriad strategies articulating what the future may bring for a jurisdiction, a sector or a local community in the north, I’m struck by how much focus there is on today. Even when a vision is articulated, the way to achieve it tends to be couched in terms of addressing challenges of yesterday rather than pursuing ambitious transformation that focuses on changing or sorting those things that will propel us forward.

Industries, manufacturing and agribusiness in the north need to reimagine their operating models and pursue new ways of doing business based on the opportunities that Industry 4.0 offers. More of the same, or even incremental improvement through adoption of technology, is no longer enough and won’t drive scaling.