EIDA Editor’s Comments on the Adelaide Electronics Industry

EIDA Editor’s Comments:

The ‘Future Made in Australia’ program recently launched by the Prime Minister included the announcement of a billion dollars to bring a quantum computing company to Australia and another billion dollars to make solar panels in Australia.  These projects have been met with some scepticism. Electronics industry observers ask why such large bets on these projects to boost ‘high technology’ industry in Australia when our governments ignore the well-established, profitable and sustainable electronics design and manufacturing industry with its high levels of R&D investment, high margins, exports and its well-paid employment on its locally developed and manufactured, IP based products and systems. 

Adelaide’s electronics design and manufacturing firms invest an average of ~6% of their annual revenue on R&D and this industry maintains its leading position, significantly from the output of its R&D investment. ABS data shows that in all other Australian manufacturing industry, R&D investment rarely exceeds 1% of revenue.

At both the Commonwealth and State Government level there is a serious lack of understanding of the size and the revenue, employment and the significance of the firmly established Australian and South Australian electronics design and manufacturing industry. 

And, in South Australia there is more than a serious lack of understanding of this industry by the State Government. The official view at the SA Department for Industry, Innovation and Science is: “. . .  there is no electronics industry in Adelaide”. 

At a meeting with Dr Susan Close the Minister for Industry, her ‘Industry Adviser’ stated that while there are some companies that make electronic assemblies and components for other industries, there is no ‘electronics industry’ in Adelaide.

The South Australian Premier does not use the word ‘industry’ when describing the 300 electronics design and manufacturing companies in Adelaide. He does acknowledge “the role of electronics as a high value manufacturing capability across many of the State’s key sectors, including defence, space, renewables, agriculture, food, forestry, resources, infrastructure and health”. 

The Adelaide electronics industry is significantly more than a “high value manufacturing capability”. It is and it deserves to be recognised as one of the State’s major high technology design and manufacturing industries.

The SA Department of Industry, Innovation and Science (DIIS) 400-word explanation for its refusal to recognise the Adelaide Electronics Industry includes the need for Australian AND New Zealand Industry Classification (ANZIC) Codes to adequately describe the activities of the electronics design and manufacturing companies so they cannot be classified as an ‘industry’. The SA government policy is that it is not possible to capture companies engaged in their diverse activities relating to electronics design and manufacture into a single discrete classification, so these electronics design and manufacturing firms cannot be classified as an ‘industry’.

See the ANZIC website at: https://www.abs.gov.au/statistics/classifications/australian-and-new-zealand-standard-industrial-classification-anzsic/2006-revision-2-0/detailed-classification/c/24/242

This shows: Class 2421 – which includes: ‘Computer and Electronic Equipment Manufacturing’, Class 2422 Communication Equipment Manufacturing, Class 2419 – Electronic measuring or testing equipment manufacturing’ and, Class 2429 – ‘Electronic circuit component manufacturing and ‘Other Electronic Equipment Manufacturing’. 

Together these four Classes generally describe the activities of the 300 Adelaide businesses in what is generally understood by its participants to be the ‘Adelaide electronics design and manufacturing industry’. for the observance of “principles of homogeneity and mutual exclusivity”.

Since these ASNZIC Codes do include the activities of the Adelaide electronics we ask:  

Why can the South Australian Department of Industry, Innovation and Science not classify the 300 businesses engaged in the design and manufacture of electronic products, components and systems be classified as an industry? 

For more details about the article – Towards 3% R&D and the role of industry policy – by Emeritus Professor Roy Green, read the full article on Australian Manufacturing here.