Gabby Costigan, Chief Executive Officer, BAE Systems Australia
The industry is growing, amazing jobs are on offer and we are investing in some truly awe-inspiring technologies for our defence force. What a great time to be part of this industry!
Australia is a prosperous nation, now in its 27th year of uninterrupted growth. We are part of the Indo Pacific region, which is experiencing unprecedented growth due to rising living standards and subsequent increase in demand for goods and services. Indeed, the Defence White paper states that by 2050 …” nearly half of the world’s economic output will be generated by the region”.
This is good news, however, against this backdrop of continued growth, security uncertainty and complexity will increase and we will face continued threats to both the security of our region and the rules-based global order.
If we are to neutralise these threats, and realise the potential for growth both here in Australia and across our broader region, stability is essential. To contribute to maintaining this stability, Australia requires a modern defence force, supported by a world leading defence industry, able to influence the strategic environment in which we are situated.
We all know that Australia is embarking on a significant national endeavour, our largest ever peace time investment in defence, and the largest recapitalisation of the Royal Australian Navy since the Second World War. With the Federal Government’s ambitions clear, the opportunities and challenges for Australian Defence Industry cannot be understated.
It is clear that now is the time for the Defence Industry to step into its own and build a new, sustainable and enduring industrial landscape, to not only meet the expectations of the government, but also the nation. It is up to industry, all of us in this room, to take the lead and do the hard work to ensure that Australia can not only increase its ability to service the Australian Defence Force, but also play a significant role in contributing to the economic prosperity of the country.
The good news is that we are not starting from scratch. Australian industry has been working with our Defence Force for nearly 100 years. We have grown our footprint, we have expanded our contribution to the economy, and we have continued to invest in and grow the skills of our workforce nationally.
The 89 billion dollar investment in the Navy alone will create thousands of jobs of the most advanced type in manufacturing, technology, software and construction. This is a nation building activity and requires highly skilled people and world class processes.
While the nation building activity is interesting, I am sure that many of you are here to discuss an important part of the activity, the role of South Australian industry.
As we all know, South Australia is about to embark on two major projects, the Future Submarines and something close to my heart, the Hunter Class Frigates. These projects will create momentous and sustained change that will have significant impact on not only this great state, but the whole nation.
It is worth pausing to absorb the enormity of these projects and the nature of the journey that we have just begun – each project on its own is bigger than the Snowy River scheme – in essence, South Australia is about to embark on two Snowy River schemes, at the same time.
It is no understatement to say that these programs have the opportunity to deliver incredible economic growth for this State and the nation.
With the pipeline of work ahead of us, it is increasingly obvious that we must continue to invest in the skills and education to deliver on the Defence plans. Getting our workforce ready to deliver on these incredible projects has to be our priority.
In terms of jobs, these projects, our twin Snowy Schemes, will create 25,000 jobs, direct and indirect, over several decades. And most of them will be right here in South Australia.
These will be some of the most skilled people in Australia, working with unique systems and solutions to solve complex problems, to support our service men and women, all while pioneering new technologies. As an engineer, I cannot think of a more exciting prospect!
Readying and sustaining this workforce will take immense planning. And this planning cannot be undertaken in isolation. This will require a very real enterprise approach. Close collaboration with academia to create a talent pipeline, industry to support, deliver and continue the work, and the Navy and Government to set and agree timeframes.
And this work is underway now.
Our workforce planning indicates that the demand for jobs for shipbuilding will outstrip supply. We need to work now to ensure that we have plans in place to attract talent to Defence. We know that high technology jobs are a beacon attracting skilled professionals from across the nation and we are in a competitive market.
Academia needs investment that fosters long term partnerships, promotes commercialisation of ideas and supports exports into a thriving, innovative and globally competitive industry.
This collaboration with academia is critical if we are to attract and develop talent into Defence careers. BAE Systems Australia has started on this journey through the creation of our Open Innovation Network. This is a collaboration with Universities to align talent and research and development with Defence’s strategic needs. We believe that these types of partnerships are essential to bring industry and academia together, to engage on current and future defence challenges and allow incubation of new technology, innovations and ideas. It is this exciting environment that will attract young minds to our industry.
As an engineering company at heart, we are continually building capacity in jobs of the future through ensuring our employees have access to development and training to help them continue to advance their skills. We are also keenly aware of the challenge around attracting new talent, which is why we are placing significant emphasis on our early career programs.
This year nearly 40 new graduates started with us. In 2019 we will be recruiting an additional 65. We will see the number of young people on an early career program grow to nearly 150 as the Hunter Class Frigates program reaches its peak.
It is important that young Australians understand all of the opportunities the Defence Industry can offer. STEM based roles make up 60% of our workforce in Australia. Not only are these talent pools in scarce supply globally, they are predicted to shrink further.
Sourcing talent is difficult, but sourcing diverse STEM talent is even more challenging. That is why our focus on contributing to the development of diverse STEM talent is so vital to our future success in addressing the challenge of delivering these incredibly important programs.
Having a strong engineering and manufacturing industry is good for any economy, particularly if that industry creates exports as well as servicing national needs. Unfortunately, the recent national conversation around heavy engineering and manufacturing has been negative and depicts an industry in decline. Personally, I believe nothing could be further from the truth and delivery of these new Defence platforms will be the centre piece of the rebirth of our advanced manufacturing capabilities.
I read with interest, Innes Willox’s presentation to the Siemens Digitization Conference last week. I hope he doesn’t mind me emphasising a paragraph that particularly resonated with me. In his presentation, Innes painted a picture of a vibrant manufacturing industry in Australia. One that is far removed from the historical perception of farm like machinery and manual repetitive labour. He described a vision of an industry that can not only survive but thrive “ … by transforming itself and taking advantage of the possibilities of new technology – a manufacturing industry that with digitalization, business model innovation and high performance” can become world leading. And critically for our industry – and this is the part that really resonated with me – this is the industry that is the path for new collar jobs - those jobs that will fuse technology with manufacturing skills, processes, innovation and problem solving.
It is in this mix between technology and manufacture, where the new collar jobs exist, that the National Shipbuilding College will have a vital role to play. The College must focus on developing, supporting and sustaining the skills required to create an enduring industry. It will be critical to the development of these skills and pivotal in driving the policy reform and multilateral approach required to succeed.
I am aware that the term ‘new collar’, first coined by IBM CEO Ginni Rometty, has an IT emphasis and many of the new collar jobs currently available are in industries that involve data science, coding and cloud applications. However, as technology continues to impact all aspects of the manufacturing industry, new collar jobs will continue to evolve where low-skill, repetitive jobs are now being automated by robots and heavy machinery. As technology continues to grow rapidly, there is a need for highly trained workers to build, maintain, update and supply parts for this technology – this is who we will need to build the future submarine, Offshore Patrol Vessels and Hunter Class Frigates.
It’s up to us, the enterprise, to not only develop and deliver these apprentices in steelwork, mechanical, electrical and other technical trades - as they will be critical for decades to come – but to also ensure that this next generation of technology savvy workers are able to exploit this new technology – in ways, to be honest, that we probably haven’t even thought about yet!
We will only achieve this if we are an attractive industry. To do this we need to promote the avenues that Defence Industry opens to work on some of the most sophisticated equipment in the world, in an advanced manufacturing environment shaped by technology and which enables those who put their lives on the line for us to have the best chance of coming home safely. Who wouldn't want to be a part of that?
We have addressed the criticality of the need to engage with academia, and the advanced manufacturing workforce able to exploit technology. I would like to finish my presentation with some thoughts on the challenges that we will need to overcome given the distributed nature of the enterprise workforce.
Major platform acquisitions take place over years, whereas the platform will be in service for decades and technological generations. Further, we cannot forget that the Government has a focus on growing our sovereign capability, able to maintain a technological edge, over the lifespan of the platform rather than a single focus on acquisition.
So, regardless of where the Navy’s fleet is being assembled, the industrial ecosystem required to build and sustain the fleet will come from across Australia. It is expected that there will be more than double the number of workers in sustainment activities and throughout the supply-chain across Australia than those involved directly in shipbuilding.
The longevity of defence projects means that the relationships we develop with our supply-chain are long-term and often lead to significant enhancement of skills and capabilities through this distributed network due to the exacting nature of Defence requirements.
While much of the focus as we get our ‘workforce ready’ will be on ensuring that we the lay the foundations to leverage smart people in the manufacture of ships, we cannot forget that most of the people in the enterprise will be focussed on sustaining these platforms. You have heard me use the word many times, but again it is the responsibility of the whole enterprise, all of us in this room, to not only build this capability but ensure that we are constantly measuring ourselves and correcting where necessary so the Defence Industry continues to deliver what is expected of it by Government.
This will require large international companies to drive diversity in their thinking – and supply chains – to extend their reach into the Australian market. Through not only engaging with SMEs directly, but supporting their upskilling to build sovereign capability. Not only will this increase our self-reliance, it also promotes a diverse industry where talented people will want to work.
This distributed work force makes sense – it supports the transfer of Intellectual Property, skills and technical information into Australia. It supports local manufacture and ultimately development of a sovereign industry capability. It also promotes an eco-system of continual learning across the lifespan of a career. And rather than lose skilled people to adjacent industries we can offer a diverse career that meets with modern expectations. Greater choice and more challenges will lead to more opportunities for employment, will support business growth and I truly believe, engender an environment of innovation as we work collectively to deliver these generational programs.
We have a huge opportunity in front of us, of a range, scale and complexity not seen before. As a result, it is going to require a collective effort from our enterprise, that is industry, academia, defence and government if we are to deliver the opportunity our future generations deserve.
We in business have a responsibility to ensure we are building strong foundations for this now. It is our responsibility to ensure that we are establishing the right frameworks that encourage highly-skilled people to leverage new technologies, and new manufacturing techniques to transform the Defence Industry into a leader for Australia. This can only happen if we focus on getting the ‘workforce ready’.