Australia should use the immediate post-COVID-19 period to develop a bigger "high tech, flexible manufacturing industry," according to former Fortescue CEO Nev Power.

Manufacturing used to the bastion of the Australian economy but has declined significantly over the past fifty years.

Manufacturing made up nearly 30 per cent of gross domestic product (GDP) in the 1960s, however the sector now has slumped to around six per cent of GDP as many businesses move offshore.

The federal government has established the COVID-19 Coordination Commission to identify how business, including manufacturing, can thrive in a post-COVID-19 world.

Mr Power, who is part of the government's commission, told Sky News the sector must embrace"high tech, flexible manufacturing that is modern and attracts a sort of investment we need."

"In the early days, post pandemic, we will have a low dollar, disrupted supply chains which create opportunities for local manufacturing and we will have amply supply of labour from people that have been displaced from industries that will take longer to start up," he said.

I think there is an opportunity to retrain people into those roles and for us to take advantage of that time post the virus when there is that demand for local manufacturing."