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When the Rail Manufacturing CRC closed its doors earlier this year, it spelled an end to dedicated rail innovation and technology funding in Australia.
While the loss has been felt deeply by the industry, the fact is the CRC’s significant gains were achieved against all odds.
A new report commissioned by the ARA has found rail innovation is in decline in Australia, and urgent changes are needed if the $155 billion in rail investment to come over the next 15 years is to deliver a truly modern, responsive and innovative rail network.
The report found rail patents are falling in a market where a lack of national focus and certainty, and wrongfooted procurement processes, have created a culture where innovation is simply not encouraged – and at times impossible to progress.
It has called for urgent action to establish rail innovation as a national priority and clearly articulated the need for a single Australian rail market that replaces state specific approaches with national local content policies.
As the federal government highlights the importance of manufacturing to help create Australia’s path out of recession, there is a real opportunity for Australian rail to embrace innovation and play a greater role in the $362 billion global rail technology market.
To do that, we need a national approach that provides certainty and longevity for the industry.
For all the benefits the Rail Manufacturing CRC delivered, the lack of continued funding beyond its term and relatively low level of public investment compared to international models saw the opportunity under-utilised.
Only 63 cents of private investment on national projects were secured for every $1 of CRC funding.
By contrast, the UK Rail Research and Innovation Network attracts $2 for every dollar of public funding, and Japan brings in 20 times its public funding from the private sector.
They achieve those results because the policy settings are right, the long term commitment is there and the focus on rail innovation recognises the invaluable role of both the public and private sectors working together.
A national approach, tied to clear commitments to invest in research, would help achieve that here in Australia.
The ARA has long advocated for a single Australian rail market to give the industry the scale it needs to invest, grow and innovate.
The report makes it clear that is more important than ever as we look to the future.
Current state procurement processes not only create inconsistent local content policies – making it hard to create true centres for innovation – but they focus on the up front capital costs in making their purchasing decisions.
That means innovations that requires investment up front in order to save time, money and boost efficiency over the life of a project or asset often don’t get to see the light of day.
Public procurement processes also err on the side of caution, calling for like-for-like replacement in many cases.
The private sector may have better, faster, or cheaper ways of delivering on requirements, but these conditions prevent them from being put forward.
Overall, these conditions create a risk averse culture that dampens the willingness of the sector to try new things.
And that is ultimately to our detriment.
Australia has great capability in the rail sector and could lead the world on rail innovation if the conditions were right.
The world-first use of autonomous heavy haul trains by the resources sector in the Pilbara is evidence of that.
Australia’s manufacturing sector features some of the industry’s brightest minds. But their big ideas are more likely to be sent overseas than developed here.
With only one per cent of rail patent submissions coming from Australia in 2019, the only way is up.
This next phase of rail investment is a chance to modernise and innovate like never before.
It is a chance to build new skills and capability in Australia to create jobs and opportunity for the next generation of rail workers.
All we need to do is take action and make rail innovation a priority for all of us.
Finding the fast track for innovation in the Australasian rail industry is available here.
Australia has the opportunity to harness the current project pipeline to improve rail manufacturing productivity, a new report has found.
The report, Finding the fast track for innovation in the Australasian rail industry, authored by L.E.K. Consulting on behalf of the Australasian Railway Association (ARA), highlights that rail innovation needs to be a national priority, and not fragmented between different state-based policies.
Caroline Wilkie, CEO of the ARA, said that the current investment in rail plus the renewed federal focus on manufacturing meant that the conditions were right for a rail manufacturing resurgence.
“The rail industry is expected to invest $155 billion in the next 15 years and we have to make that investment count,” Wilkie said.
“The world-first introduction of autonomous trains in the Pilbara region is just one example that shows Australia has the capability to lead the way on rail innovation.
“But the policy settings must be right to support innovation and technology adoption across the industry at a whole.”
Wilkie said that despite Australia having a large market for rail and the required network size, differing policies on local content in various states meant that the local manufacturing industry would struggle to compete.
“The international experience has shown that where governments lead a focus on rail innovation, private investment follows,” she said.
“We have the projects in the pipeline and we have the network scale to make rail innovation a real success.
“All we need now is for a true national focus to bring government and industry together to make the most of this opportunity.”
With the closure of the Rail Manufacturing CRC earlier in 2020, the Australian rail industry has lacked government funding for innovation specific to rail. The report found that Australia was also falling behind in comparison to other countries, with only one per cent of the world’s rail patents in 2019 coming from Australia.
In a report released at the beginning of this week, the Rail Manufacturing CRC reviewed projects that it had completed and highlighted the potential for further innovation.
“Australia’s research sector is world class and there exist many opportunities for the rail sector to utilise Australia’s R&D capabilities. With the closure of the Rail Manufacturing CRC, there will be a need for both government and industry to consider new models to support ongoing innovation,” said Stuart Thomson, CEO of the Rail Manufacturing CRC.
The report highlights four ongoing challenges for the rail industry. These include the need for national harmonisation, industry co-investment in R&D, the support for a culture of innovation, and the need to secure future funding for rail R&D.
“There exist significant opportunities for the sector to increase local manufacturing, develop supply chains and to train and educate a highly skilled workforce, however Government intervention and support will be required,” the report highlights.
Wilkie said that the industry was at a critical juncture.
“We run the real risk of being saddled with an inefficient, outdated rail network if we don’t support greater innovation and technology adoption to deliver the best possible outcomes for Australian rail users.”