Design needed to invigorate economy

Recently Melbournians have noticed a new and distinctive vehicle zipping along the city’s tram tracks. The new tram is the first of 50 new E-Class vehicles scheduled for deployment across Melbourne’s tram network. The E-class is the longest tram ever to grace Melbourne’s tracks. With its size and striking design the tram has been turning heads of Melbourne café goers and tram-spotting gunzels alike.

The E-Class trams are truly innovative with, among other features, dedicated wheelchair spaces, low floors and external safety cameras. As stated by Victorian Premier, Denis Napthine; “The great thing about these E-Class trams is that they were designed in Melbourne, (and) built in Melbourne, for Melbourne conditions.”Melbourne has had trams in continuous operation since 1884 and currently boasts the largest urban tram network in the world. Given this history and Melbourne’s strength in transport design and manufacturing, it’s interesting that these are the city’s first locally designed and manufactured trams.

Manufacturing's decline

Australia, like many western countries, has witnessed a dwindling in the profitability of its manufacturing sector over recent decades. This has driven companies to announce closures of their Victorian operations in the last five years, including Pac Brands and more recently Ford Motor Company. These closures are of particular concern for the Victorian economy. The $30.8 billion manufacturing sector is the largest single full-time employer in Victoria. If the challenges facing the manufacturing sector cannot be addressed soon, Victoria may experience a period of significant economic stress.

Tapping into our inherent innovation

For many years the Australian economy has been an oligopoly, insulating businesses from the rigours of fierce competition. This environment has bred a generation of companies in Australia that have been able to achieve success without the need for world standard innovation. Despite this, as a nation we are an exceptionally creative and innovative people with a heritage of innovative thinking that has changed the world as we know it. The use of stainless steel tanks in the wine industry and the ‘black box’ in-flight recorder are two particular examples of Australian innovations that have made a significant contribution to the modern world.

Design is the process used to develop creative ideas into innovative solutions that create value for a business and an economy. Design leads to the development of Intellectual Property (IP) and generates new opportunities for manufacturers, while giving business a unique competitive advantage. Design is the key to the commercialisation of Research & Development (R&D). Our world class design capabilities cannot be effectively utilised without appropriate investment in R&D. Alarmingly, given the threat to our manufacturing sector, Australia has seen a reduction in R&D investment. In FY2012 Australia’s $18.3 billion R&D spend decreased from 1.28% to 1.24% of GDP. Most disturbing is the trend of R&D spending in the manufacturing sector, reducing from 36% of total R&D spending to 24% in the 6 years from 2006.

The UK government’s 2005 Cox Review examined how British industry could use design to ensure the nation’s long-term economic success. The report is highly relevant for Australia as both countries have strong design industries that have been underutilised in the development of innovative and implementable solutions. The Cox Review advocated the use of design to revitalise Small to Medium Enterprises (SMEs). Given SMEs contributed 46% of Australia’s GDP in 2006, the findings are clearly relevant. The Cox Review recommends that one source of stimulation for the local manufacturing sector is through public procurement – driving more innovative, locally designed and locally manufactured products. State and Federal government organisations can play a key role in reversing Australia’s recent trend of R&D spending reductions.

Using design; A win, win, win

As announced by Denis Napthine in July of this year, the E-Class tram resulted in the creation of 500 jobs at manufacturer Bombardier. The local content requirements of the E-class tram tender process are a perfect example of how government organisations can drive the use of local design to develop innovative solutions and create local manufacturing jobs. In addition to boosting the manufacturing sector, using Australian design, made the vehicle a genuinely local product, improving operator and end user ‘buy-in’, while creating local jobs within the product design industry.

There is little doubt that effective design can drive the development of products that create manufacturing opportunities and contribute to growth for businesses, sectors and economies. Within the spirit of the Cox Review, the new Melbourne E-Class tram is a successful Australian example of deliberate planning and good design leading to new and real jobs. However, Australia needs more brave and long-sighted policy and legislation to support the use of design in invigorating our economy. In 2005 the Cox Review suggested there was a 5-10 year window of opportunity, for the use of design to drive economic success. If it is not already too late for us here in Australia, we are definitely on borrowed time.