Manufacturing is the most important source of innovation in the economy. It supports higher-than-average productivity growth and good jobs. It contributes disproportionately to Australia’s exports. Manufacturing is in decline everywhere; it is argued: the problem isn’t unique to Australia. And at any rate, the government certainly shouldn’t interfere with this natural, inevitable, even beneficial process. This complacent view is wrong on several important grounds: • Australians are buying more manufactured goods over time, not less. And manufacturing output is growing around the world, not shrinking. • Manufacturing is not an “old” industry. It is, in fact, the most innovation-intensive sector in the whole economy — and no country can be an innovation leader without the ability to apply innovation in manufacturing. • Manufactured goods account for over two-thirds of world merchandise trade. A country that cannot successfully export manufactures will be shut out of most trade. • Many countries around the world (including high-wage industrial countries) are expanding manufacturing output, creating new manufacturing jobs, and boosting manufactured exports. Instead of tolerating and trying to “explain away” industrial decline, Australia needs Australian manufacturing to join the global manufacturing resurgence. If not, even more of this high-value work will move to other jurisdictions, and Australia’s status as an advanced industrial economy will be in jeopardy.