South Australia Premier Jay Weatherill says the nation's manufacturing industry is under enormous threat.
Mr Weatherill says low productivity growth and exposure to the high Australian dollar are creating the perfect storm for the sector, which accounts for 10 per cent of his state's economic output.
"Some firms won't survive," he told the Australian Workers' Union conference on the Gold Coast on Monday.
"If we move too slowly, or fail to foster innovators, the future of manufacturing in this nation, in our state, is in great danger."
He lamented that shearing cutters and combs, which played a historical role in Australia's union movement, were now made in Germany and China.
"We don't even make a comb here," he said.
Mr Weatherill also welcomed the federal government's $1 billion innovation plan announced on Sunday, saying it would help manufacturers secure work from big projects by encouraging local procurement.
This would challenge the current trend to shut down plants and make workers redundant.
"Redundancies should not be the first instinct, the priority should be retraining incumbent workers facing the effects of restructure," Mr Weatherill said.