Innovation and quality drive electronics growth

Over the past few years, the Australian electronics industry has endured tough times, but there are glimmers of hope. Last week, when the industry professionals and electronics enthusiasts gathered in Melbourne for the annual ElectroneX conference they had wonderful success stories to share and some exciting products and services to sell.

Factors such as availability of cheaper resources from offshore high labour costs and increasing cost of materials are undoubtedly putting pressure on the industry, but innovation and quality are continuing to drive phenomenal growth. Small and medium-sized companies developing innovative electronics for the aviation industry and the medical industry seem to be faring better compared to automotive electronics manufacturers and the PCB design, assembly and manufacturing companies. To learn more about the trends and developments in the industry, What’s New in Electronics interviewed Andrew Pollock, executive officer, SMCBA Australia. Below are the excerpts.

What is the current state of Australia’s electronics industry?

The Australian electronics industry has undergone a massive transformation in the past 10 years. Around 40% of Australia’s electronics manufacturing capacity disappeared within three to four years as businesses consolidated, moved operations offshore or subcontracted it to overseas contract manufacturers. In order to regain the lost market, Australian contract manufacturers have started offering turnkey solutions - ie, they offer product design, board fabrication, assembly as well as test services. They either offer all of these services themselves or form alliances with other companies that offer these services.

Which subsectors do you expect growth in?

Australia has strong engineering research and design and talent, and businesses are finding success through innovation. Medical electronics and sophisticated communications - radio and mobile communications – are two key areas that are expected to witness strong growth. The contract manufacturing market is also expected to show growth, particularly manufacturing of low-volume, high-mix electronics. We don’t have many large electronic manufacturers in Australia, but there are a number of small companies that are developing niche products and solutions.

Your words of wisdom for small and medium electronics businesses?

There are a wide range of government resources available through the Commonwealth and state governments for small business. Not all involve passing out money. I would advise small to medium-sized businesses to take advantage of those resources. The Commonwealth resources site is www.business.gov.au. Most of the programs are well established so are unlikely to change much with the change of government.

What are key initiatives essential to transform or revitalise the Australian electronics industry?

Growth in the electronics sector is occurring through small niche or specialised product OEMs. The trick from here is to find ways to help them grow to medium-sized or larger businesses. Access to capital to fund growth has always been a difficult area for small businesses and finding the right path to export markets can also be difficult; but again, these are areas where government resources can assist. There are signs that the industry is reasonably buoyant because there are a significant number of designers who have a lot of work on for customer product revisions but also new products and the equipment suppliers have been selling quite a bit of equipment in recent times.