The Illawarra cannot survive on its traditional manufacturing industries, a leading academic has claimed.
Intelligent Polymer Research Institute director Gordon Wallace believes the region needs to embrace more high-tech manufacturing methods to create jobs, investment and growth in the area.
Professor Wallace, who runs the institute at the University of Wollongong's Innovation Campus, believes the planned demolition of the Port Kembla stack signals the demise of low-cost, high-volume manufacturing in the region.
"Everyone is quite aware that in Australia, not just Wollongong, companies are finding it difficult to compete overseas with other high-volume manufacturers," he said.
"The Australian economy is not set up to do it - we need to focus now on high-tech manufacturing, not bulk commodities."
Prof Wallace wants to see an environment where smaller manufacturers and young, talented researchers can thrive.
"We need to focus on helping the next generation of highly skilled workers," he said.
"We have opportunities here, emanating from the university . . . we really need to swoop on those advances and create industries here.
"It's about having the right business environment and getting funding.
"A lot of people still think of Wollongong as the steelworks [but] we have all these exciting technologies just bubbling under the surface.
"I've never seen a generation of researchers so equipped to take on the challenge . . . but if they can't do it in Wollongong, they will take it somewhere else."
Prof Wallace said companies such as BlueScope had embraced the change, investing in new technologies to take its business into the future.
But he believes the "traditional manufacturers" can no longer be relied on to create jobs, noting employment needed to come from research-driven operations.
He is also adamant that workers already employed in the industry need to be responsive to ongoing training and education to keep their jobs.
"Workers have to be flexible to change," he said.
"Without ongoing training and education, people cannot expect to sustain their employment.
"It's about where investment should be - is it in sustaining jobs or creating jobs for those workers' kids? Sometimes that's a choice that businesses have to make."
Prof Wallace's comments came as sacked BlueScope workers marked the second anniversary of mass job cuts at the Port Kembla plant.