Global production sharing: Exploring Australia's competitive edge

Abstract

Cross‐border dispersion of production processes within vertically integrated global industries (“global production sharing”) has been an increasingly important structural feature of economic globalisation in the recent decades. This paper examines patterns and determinants of global production sharing with an emphasis on how Australian manufacturing fits into global production networks (GPNs). Though Australia is a minor player in GPNs, there is evidence that Australian manufacturing has a distinct competitive edge in specialised, skill‐intensive tasks in several industries such as aircraft, medical devices, machine tools, measuring and scientific equipment and photographic equipment. Specialisation in high‐value‐to‐weight components and final goods within GPNs, which are suitable for air transport, helps Australian manufacturing to overcome the “tyranny of distance” in world trade. Being predominantly “relationship specific,” Australian GPN exports are not significantly susceptible to real exchange rate appreciation.

Implementing Industry 4.0 in Australia: Insights from Advanced Australian Manufacturers

“…A key differentiator for Australian manufacturing is scale and distance [29]. The small scale and domestic focus of most Australian manufacturers may have contributed to the fact that advanced Australian manufacturers are focusing on vertical integration rather than horizontal integration.…”

“…Australia's manufacturing sector is highly concentrated in the processing of natural resources (e.g., food and beverages, basic metals and fabricated metal products)-sectors where localisation creates a competitive advantage [28]. It is also dominated by small to medium-size enterprises [28] and plays a relatively minor role in global production sharing [29]. All these factors, lack of diversity, domestic focus and the dominance of small to medium enterprises will influence the way in which Australia experiences Industry 4.0.…”

Australian manufacturing industry: a 20-year scoping study on barriers, opportunities and trends for its strategic development

“…We examined the references of the remaining 84 articles to check for relevant works frequently cited but not yet added in our review. The quantitative analysis of references did not result in the inclusion of any study, and the literature portfolio used in the study comprised these 84 studies (Abbott, 2019;Athukorala et al, 2017;Baird et al, 2011;Barnes, 2017;Beaumont, 2005;Beer, 2018;Black et al, 2015;Boaden & Sims, 2000;Boer et al, 2005;Caldera et al, 2018;Cantù et al, 2015;Clibborn, 2012;Cooney;Correia et al, 2020;Craik, 2015;Cripps et al, 2009;Dargusch & Ward, 2010;Feng et al, 2008;Fraser et al, 2013;Given, 2017;Grodach & Martin, 2020;Hasan et al, 2011;Hu et al, 2019;Jackson et al, 2018;Jayaram et al, 2014;Joiner et al, 2009;Jones, 2005;Karim et al, 2008;Kiridena et al, 2009;Le & Valadkhani, 2014;Leahy et al, 2010;Lo & Power, 2010;Lobo et al, 2009Lobo et al, , 2012Lobo et al, , 2018Logue et al, 2015;Low et al, 2007;Marks, 2009;Mo, 2009;MoosaviRad et al, 2014;Nelson et al, 2007;…”

“…As the scope of manufacturers becomes broader, their assignments begin with research and development, pass through manufacturing and assembly, and end with advertising, marketing and after-market services (AI Group, 2019), characterizing an end-to-end manufacturing. Additionally, as highlighted by Given (2017) and Athukorala et al (2017), manufacturers need to move from a product-centered organizational model to a customer-oriented business, in which competitiveness will be sought based on a subtle balance between lower cost products and higher quality services enhancing market orientation. Thus, the combination between vertical integration and servitization results in a greater challenge for the development of sustainable operations, whose focus needs to be expanded way beyond the usual factory boundaries.…”

Trade policy review of Australia

“…The limited Australian participation in GVCs had been a cause of concern in several official publications (e.g CSIRO, 2016),. although the potential for leveraging comparative advantage in specific skills was acknowledged(Athukorala et al, 2017).7 The CPTPP partners are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.…”