Australia is able to stay competitive in global manufacturing due to its capabilities in manufacturing high value-added products. However, the comparative disadvantage in large-volume production is currently a restraint limiting the global competitiveness of the industry. The transition to smart manufacturing is being driven by structural changes in the global market, with Australia aiming to move from low-cost, high-volume production to high-margin, low-volume models. This study looks at the digital technologies transforming the Australian manufacturing sector. It provides insights into both global and domestic technology trends, throws light on market innovations, highlights the mainstream applications of these new technologies, and predicts the potential applications in Australia. It also analyses the competitive structure of the market, makes comparisons with traditional manufacturing, and discusses the overall trends and development plans that are shaping the market. Advanced technologies, such as robotics, Additive Manufacturing (AM), and digital manufacturing are revolutionising manufacturing, with new abilities to design and manufacture complex, customised products with short lead times, minimal tooling and wastage, and low labour demand. However, data analytics and technologies such as Industrial Internet of Things (IIoT) will have the most impact on the Australian manufacturing sector. Being data-driven allows manufacturers to gain a competitive advantage by analysing information to improve various processes in production, logistics, and supply-chain management. The adoption of digitally-enabled manufacturing solutions is most prevalent in the manufacturing verticals that require higher standards of quality assurance and higher production volume such as healthcare, aerospace, and Food and Beverage (F&B). For example, the adoption of digital manufacturing solutions allows more manufacturers to transcend from scheduled repairs and maintenance to being able to predict and prescribe maintenance, repairs, and possibly training to move from reactive to preventive performance capabilities. As such, digital manufacturing solutions have a natural environment in high-volume production lines, where the need to minimise production downtime from equipment maintenance is a major consideration. More manufacturers are recognising the benefits of digital transformation in the industry; however, there is some hesitance, as a large number of SMEs in Australia are unable to find the appropriate funding to support the investments required. Cybersecurity is an essential component in digital transformation. However, the expansion of a manufacturer’s communication network and digital integration of more production processes to be accessed and controlled via the Internet, cloud, and other network servers, could intensify the vulnerability of the organisation to security threats. To secure the company’s competitive advantage and ensure complete process control, a rigid set of protocols and protection systems should be set in place for end users of ICT solutions to trust the transformation process.