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1.4 ICT issues specific to the manufacturing sector

The manufacturing sector has been selected as the focus of this study for a number of reasons:

  • The sector makes an important contribution to the Australian economy in terms of employment, Gross Domestic Product (GDP) and exports.
  • Growth over the period 1977-78 to 2000-01 has averaged two per cent per annum, slightly slower than GDP growth. Manufacturing comprises 13 percent of GDP and is of growing importance to trade. The share of manufacturing exports (as a percentage of GDP) has almost doubled over the period 1978-79 to 2000-01 rising from 3.95 percent to 7.21 percent (National Office for the Information Economy 2004).
  • The scope for incorporating and utilising ICT throughout the whole business of a manufacturing company is very broad. Analysis of Australian Bureau of Statistics (ABS) labour force data[2] reveals that around half of all skilled ICT workers are employed outside the ICT sector, with a significant proportion of these people employed in the non-ICT manufacturing sector.
  • Estimates based on ABS data suggest that non-ICT companies in the manufacturing sector were responsible for around eight percent of all business expenditure on ICT research and development in 2001-02[3].
  • It is well recognised that the long term sustainability of the Australian manufacturing sector will depend on its ability to adapt and compete in an environment which includes increasingly globalised markets and value chains (Australian Industry Group 2002, 2004; Economist Intelligence Unit 1997; Howard 2001, 2002a; Howard and Johnston 2001).

While a number of economic and econometric studies (Gretton, Gali, et al. 2003; National Office for the Information Economy 2004) have suggested that ICT has made a significant contribution to productivity in manufacturing, these gains have not been consistent across the sector. What has not been explored to the same extent is the way in which ICT has assisted businesses in increasing sales, net income and competitive advantage. It is these management issues that form the focus of this study.

 

 

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  • Last modified: 5 February 2008, 10:29am