Rear Admiral (Rtd) Michael Julian van Balen AO was appointed Principal of the Australian Maritime College in 2019. Career highlights include Commanding Officer of HMAS Sydney (FFG-03) in 2003, where he deployed to the Persian Gulf for the war in Iraq.
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No Modern Nation Can Thrive Without Engineers
Michael Julian van Balen AO
Rear Admiral (Retd) Michael Julian van Balen AO, Principal of the Australian Maritime College, discusses the persistent shortage of STEM skilled graduates and declining STEM talent pool. With Australia’s maritime security at stake, he calls for a whole-of-nation response.
At the opening of a science facility in Canberra in 1988, the then Prime Minister, the late Bob Hawke, agreed that Australia needed to become “the clever country”. At that time, Australia could still benefit from technological, economic, social, and political innovations that were developed in other countries.
In 2015, the then Prime Minister, Malcolm Turnbull, challenged us to become the ‘innovation nation’. Today, we are far behind on numerous metrics: and the changing geo-political, natural, and economic environment in which we find ourselves, shows we are not as far away from the problems of the world as we once were.
As a maritime nation, Australia is reliant on the sea for trade, resources, security, and economic prosperity, though the importance of the maritime ecosystem as historically languished in the national psyche. More than a generation since Hawkes’ “clever country” declaration, recent regional and global geo-political events and the COVID-19 pandemic have raised our consciousness on the importance of being an Indo-Pacific maritime nation. This is evidenced by the Federal government’s naval shipbuilding program, proposed acquisition of nuclear submarines, and discussion on development of a “strategic” (merchant) fleet.
Our ability to develop the industrial complex to fulfil these strategic plans is, however, hampered by past inactivity, inefficiencies in the high cost of manufacturing, and ongoing cultural reluctance to develop the necessary science, technology, engineering, and maths (STEM) skills.
As a nation, we more than ever need to become highly educated and skilled, efficient, cost competitive, and innovative. We must become the “clever” country to ensure our strategic plans and future security and prosperity are not at risk.
NINETY EIGHT PERCENT OF AUSTRALIA’S TRADE BY SEA
Australia conducts 98 percent of its trade by sea; therefore, most domestic economic activity and employment is reliant on this trade. In 2018-19, Australia imported $239.0 billion of goods by sea, and exported $333.8 billion worth. In 2017-18, the economic output of the Australian maritime industry, including natural gas, LPG, oil, fisheries, shipbuilding and repair, marine equipment, and water-based tourism and transport was $81.2 billion; and it provided employment for nearly 340,000 full time workers. Yet, most Australians are oblivious to the importance of the maritime ecosystem.
The rise of China and its claims to the South China Sea, Russia’s invasion of Ukraine, and the decline of the United States’ hegemony have challenged the world order, and the rule of law, and woken us to the importance of the maritime.
FEDERAL GOVERNMENT RECOGNITION OF SEVERE SHORTFALL
The Federal government has committed over the next 30 years to a $183 billion continuous Naval Shipbuilding Plan, with additional funding for a nuclear submarine program expected to be announced in early 2023. At the same time, the veil has been lifted on the indigent state of Australia’s national merchant fleet which has reduced from approximately 100 vessels three decades ago, to just 14 today. The government has now recognised the reliance we place on foreign governments and companies for our essential imports, a reliance which has been exacerbated in recent times by the COVID-19 pandemic and natural disasters.
As a result, a taskforce has been established to investigate development of an Australian “strategic fleet” to strengthen our economic sovereignty and national security, and to secure our ongoing access to fuel supplies and other essential imports.
In recognition of the importance of workforce development to delivering the government’s programs, the Naval Shipbuilding College (NSC) was established to support defence industry job seekers and provide advice on opportunities to upskill through direct connections with education and training providers.
NOT THE CLEVER COUNTRY
However, the work of the NSC is occurring in an environment in which the maritime industry, is struggling to recruit. Part of this problem comes from competition with other national infrastructure programs, and the mining and energy industries.
But the biggest negative impact is the apparent reluctance of young Australians to develop the STEM skills required to contribute to the workforce. The number of students studying STEM subjects in Years 11 and 12 has flatlined at around 10 percent; and school students’ science and maths results are declining or stagnant. The impact of this STEM deficiency from a strategic maritime perspective, is most evident in our engineering capability.
Australia has a shortage of engineering skills with only 8.2 per cent of graduates in Australia graduating with an engineering qualification. This compares poorly to countries like Germany at 24.2 per cent, and Japan at 18.5 per cent. In 2022, the top ten engineering disciplines in demand in Australia included civil, mechanical and marine engineers.
Maritime engineers, comprising naval architects, ocean engineers, and marine and offshore engineers, are categorised by Engineers Australia within civil and mechanical engineering areas of practice, and therefore the ability of our workforce to meet the requirements of the national shipbuilding programs is clearly an emerging problem.
A NATIONAL PROBLEM REQUIRES A WHOLE OF NATION RESPONSE
Maritime engineers are also crucial to maritime civil engineering tasks supporting port and offshore mining and energy infrastructure. Immigration policies to assist workforce development are helpful, but in areas such as the nuclear submarine program, for national security reasons, the workforce must be Australian. As such, resolving the workforce challenges in pursuit of our national strategic plan will require collaboration between all levels of government, industry, the tertiary education sector, and professional associations; a willingness and enthusiasm to participate in the pursuit of knowledge and skills by all Australians; and an efficiency and commitment about our purpose.
A whole of nation approach is required to develop skills and to ensure our ongoing economy and prosperity, using all components of our industrial and societal complexes. As a nation, we need to become more educated and skilled, more efficient, more cost competitive, and more innovative. We truly need to become a “clever” country and an “innovative nation”, and this need becomes ever more pressing and challenging the longer we wait to take credible action. So, what are we waiting for?
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In 2016 I published a blog article titled Moonshots for Australia: 7 For Now. It’s one of many I have posted on business and innovation in Australia. In that book, I highlighted a number of Industries of the Future among a number of proposed Moonshots. I self-published a book, Innovation in Australia – Creating prosperity for future generations, in 2019, with a follow-up COVID edition in 2020. There is no doubt COVID is causing massive disruption. Prior to COVID, there was little conversation about National Sovereignty or supply chains. Even now, these topics are fading, and we remain preoccupied with productivity and jobs! My motivation for this writing has been the absence of a coherent narrative for Australia’s business future. Over the past six years, little has changed. The Australian ‘psyche’ regarding our political and business systems is programmed to avoid taking a long-term perspective. The short-term nature of Government (3 to 4-year terms), the short-term horizon of the business system (driven by shareholder value), the media culture (infotainment and ‘gotcha’ games), the general Australian population’s cynical perspective and a preoccupation with a lifestyle all create a malaise of strategic thinking and conversation. Ultimately, it leads to a leadership vacuum at all levels. In recent years we have seen the leadership of some of our significant institutions failing to live up to the most basic standards, with Royal Commissions, Inquiries and investigations consuming excessive time and resources. · Catholic Church and other religious bodies · Trade Unions · Banks (and businesses generally, take casinos, for example) · the Australian Defence Force · the Australian cricket teams · our elected representatives and the staff of Parliament House As they say, “A fish rots from the head!” At best, the leadership behaviour in those institutions could be described as unethical and, at worst….just bankrupt! In the last decade, politicians have led us through a game of “leadership by musical chairs” – although, for now, it has stabilised. However, there is still an absence of a coherent narrative about business and wealth creation. It is a challenge. One attempt to provide such a narrative has been the Intergenerational Reports produced by our federal Government every few years since 2002. The shortcomings of the latest Intergenerational Report Each Intergenerational Report examines the long-term sustainability of current government policies and how demographic, technological, and other structural trends may affect the economy and the budget over the next 40 years. The fifth and most recent Intergenerational Report released in 2021 (preceded by Reports in 2002, 2007, 2010 and 2015) provides a narrative about Australia’s future – in essence, it is an extension of the status quo. The Report also highlights three key insights: 1. First, our population is growing slower and ageing faster than expected. 2. The Australian economy will continue to grow, but slower than previously thought. 3. While Australia’s debt is sustainable and low by international standards, the ageing of our population will pressure revenue and expenditure. However, its release came and went with a whimper. The recent Summit on (what was it, Jobs and Skills and productivity?) also seems to have made the difference of a ‘snowflake’ in hell in terms of identifying our long-term challenges and growth industries. Let’s look back to see how we got here and what we can learn. Australia over the last 40 years During Australia’s last period of significant economic reform (the late 1980s and early 1990s), there was a positive attempt at building an inclusive national narrative between Government and business. Multiple documents were published, including: · Australia Reconstructed (1987) – ACTU · Enterprise Bargaining a Better Way of Working (1989) – Business Council of Australia · Innovation in Australia (1991) – Boston Consulting Group · Australia 2010: Creating the Future Australia (1993) – Business Council of Australia · and others. There were workshops, consultations with industry leaders, and conferences across industries to pursue a national microeconomic reform agenda. Remember these concepts? · global competitiveness · benchmarking · best practice · award restructuring and enterprising bargaining · training, management education and multiskilling. This agenda was at the heart of the business conversation. During that time, the Government encouraged high levels of engagement with stakeholders. As a result, I worked with a small group of training professionals to contribute to the debate. Our contribution included events and publications over several years, including What Dawkins, Kelty and Howard All Agree On – Human Resources Strategies for Our Nation (published by the Australian Institute of Training and Development). Unfortunately, these long-term strategic discussions are nowhere near as prevalent among Government and industry today. The 1980s and 1990s were a time of radical change in Australia. It included: · floating the $A · deregulation · award restructuring · lowering/abolishing tariffs · Corporatisation and Commercialisation Ross Garnaut posits that the reforms enabled Australia to lead the developed world in productivity growth – given that it had spent most of the 20th century at the bottom of the developed country league table. However, in his work, The Great Reset, Garnaut says that over the next 20 years, our growth was attributable to the China mining boom, and from there, we settled into “The DOG days” – Australia moved to the back of a slow-moving pack! One unintended consequence of opening our economy to the world is the emasculation of the Australian manufacturing base. The manic pursuit of increased efficiency, lower costs, and shareholder value meant much of the labour-intensive work was outsourced. Manufacturing is now less than 6% of our GDP , less than half of what it was 30 years ago!
