Advanced technology scale-up produces highly engineered products with multiple levels of complex configurations, systems and subassemblies.
A single piece of equipment can contain up to a million components, require hundreds of steps to assemble, and require regular adjustments by multiple expert engineers.
In fact, the production lines themselves are often highly specialized and may be as patent protected as the final product.
Offshoring, unlike software production, which can be easily (and often is) offshored, requires moving the entire factory offshore, which is expensive. This makes deep tech manufacturing facilities incredibly ‘sticky’ for Australia.
2. One more person
Scaling up deep technology creates spillover effects in the form of dozens, if not hundreds, of opportunities upstream and downstream of your own supply chain.
For example, when Queensland-based Gilmour Space Technologies goes into space, chief executive and founder Adam Gilmour says about 300 manufacturers from Australia will be on board.
Battery manufacturer Gelion, a resident of deep tech incubator Cicada, has partnered with a local lead-acid battery manufacturer to launch a sustainable zinc bromide battery production facility using existing lead-acid processes. increased production efficiency.
3. Constant reinvestment builds sticky assets
When a deep tech company exceeds 500 R&D and production staff are strongly encouraged to continuously reinvest in specialized facilities, real estate for continuous production, surrounding infrastructure, supporting supply chains, and highly specialized teams.
We also reinvest 15-20% of our earnings in R on average.&D. for the survival of the company.
As an example, Cicada-resident biotech company SpeeDx is constantly reinvesting in R.&D capabilities (teams, infrastructure, experiments), industry-based PhD students (talents and research), and research collaborations with universities through multiple grant schemes.
When the ball starts rolling, it becomes a snowman.
These scale-ups act as magnets for role talent such as Senior Production Engineers, who can train the hundreds of staff beneath them. It’s a strategy some of Australia’s largest medical device companies, such as Cochlear, have acknowledged for their scale and success.
Each new anchor point and extra investment will keep the company even more entrenched in Australia and significantly improve the assets on the company’s (and Australia’s) balance sheet.
4. Complex Products Prevent Major Events
Complex products created by scaling up deep tech manufacturing open up diverse export markets.
They also prevent major economic shifts that would otherwise dramatically increase a country’s dependence on a few industries or wipe out some industries temporarily.
When the pandemic hit, the deep tech scale-up within Cicada didn’t suddenly lay off employees, it expanded its product line, hired staff, and found new markets.
The problems they are trying to solve, such as climate change, aging populations and energy security, have not gone away with the arrival of the virus.
In fact, many have built new technology to “save the world” from COVID-19, proving impervious to major events.
5. IP equals higher rewards
A recent study by IP Australia found that IP owned SMEs (as all deep tech scale-ups do) experienced high sustained growth and employed 3.5 times as many employees. , were found to be more likely to pay higher average wages.
It also gives way to new STEM (Science, Technology, Engineering and Mathematics) graduates who are more likely to reinvest in continued R.&D, and work with other SMEs across sectors.
6. It used to work
Perhaps the biggest reason nations invest in scaling up complex deep tech manufacturing is proving it works abroad.
Germany’s “Mittelstand” (SMEs) are manufacturing and technology companies that have endured multiple economic cycles, have 70-90% shares in their respective world markets, and account for much of Germany’s sizeable trade surplus. am.
of harvard business review “Many of these companies have all the ingredients for a successful breakout,” says Forbes.
Nor would Australia create its own version of these robust, job-creating, high-employment companies.
