Commercial Ready OUT – Commonwealth Commercialisation Institute IN

Commercial Ready grants are no more – the goss is that Minister Carr always had a leaning to tax concessions, hence there is now an expanded R&D tax credit from 1 July 2010 – ostensibly to improve support for smaller firms in tax loss as well as rewarding larger firms for their R&D efforts – a 45% refundable credit for firms with turnover less than $20 million – equivalent to a tax concession of 150%. 

 The document that stood out was “Powering Ideas – An Innovation Agenda for the 21^st Century“. Produced by the Department for Innovation, Industry, Science and Research, the report clearly and eloquently looks at the history of innovation in our country and identifies Australia’s failure over the last decade to keep up an appropriate level of investment in innovation compared to our peers. The 2009 Budget is stage one in the long path towards rectifying the country’s under-investment in innovation over the last decade.

Commercialisation is an art – requires input and commitment from seasoned business executives with experience in taking promising ideas, products and services and creating profitable enterprises from them. Over the last two years in my role as a VC, I’ve looked at 340+ entities (we have backed two!).

The common theme is the genuine lack of commercial expertise in these entities to make them globally successful. Investment has to be made in this area and the Commonwealth Coomercialisation Institute (CCI) is the right body to achieve it (see HOT GOSS)

Commercial Ready didn’t rise like a phoenix from the ashes in this Budget. The amendment to the R&D Tax concession is welcomed. But many early innovators will not be around to take advantage of these additional tax credits. Many have been struggling with the cash drain of the R&D burden since CR was cut in May 2008. Many are on life support. With CR, cash payments were made in advance of the expenditure. Now the cash does not arrive until after the tax year.

Contributed by Nick McNaughton (Anthill)

Canberra – why the VERY expensive water?

Cockatoo is assisting councils and sporting groups to access federal stormwater and Green Precincts grants.

Here in Canberra, our golf course has an urgent need for stormwater in the current drought because using potable water is not an option – it costs $3,700/ML.

During our mulling process, we discovered that Adelaide pays $1,650/ML, Sydney pays $1610/ML and even cities like Dubbo and Wagga further down the parched Murray-Darling system pay only $1380/ML and $680/ML respectively. Something seriously out-of-kilter. We are investigating.

And one of our Canberra readers has gone for my jugular (ouch!):

“Dear Cockatoo, Why is it that people like you now realise the cost of water in the ACT!! We have tried to make people aware for some time that due to the powers that be we are charged way beyond what others are charged. All our infrastructure has been in place for a long time and even the normal maintenance is reduced (ain’t broke don’t fix). Now for the so called water security we are expected to pay on top of the charges. Why don’t you check the dividend to ACT and AGL for the past 10 years it has been operating. Water is a cash cow! Everyone needs it – so be careful not to look for the ACT grant for putting in a tank, as they will charge extraction fees from the stormwater system as well. Give with one hand take with the other. Anon.”

Coogee Bay Hotel’s regional branding (BEST PRACTICE)

 Last week I met Stephen Saric, the bloke with the toughest job in Australia – he is the food services manager at the Coogee Bay Hotel. You might recall that this hostelry became famous last summer when some additional organic material found its way into a serving of icecream.

 Well I was cruising around looking for a decent coffee when I was taken aback by the menu – they were putting mystique and sizzle into things by emphasising the regional source of their steaks!

 SIRLOIN grain fed – 250gm Angus New England NSW $22

PRIME EYE FILLET – 250gm Gympie QLD $25

WAGYU RUMP Marble 5+ – 300gm Toowoomba QLD $26

T-BONE – 500gm Angus 150 day Kilcoy QLD $29

 This is extremely rare in a middle-priced eatery in an urban environment. Stephen explained that he’d be willing to consider offers from other regional producers, subject to QA assurances and reliability of supply. Hats off to Stephen for having a crack. It is an iconic pub, with lots of history. The owner for many years was leviathan bookie, Terry Page, and it’s seared into the memories of half the nation’s ex-footballers.

 And it has got us thinking – we have Cockatoo members in iconic towns with quality produce that could dovetail nicely onto the Coogee menu e.g. Kym raves about the saltbush lamb from out Wilcannia way, Peieta says Cunnamulla has fantastic beef, Chris has his innovative small species abattoir at Bega, Rob knows who’s who in the Heyfield beef industry. Who’s interested in exploring this further?

 Contributed by Silverhawk

Collaborator Profile – Nick Keyko

Who and where are you?

 My name is Nick Keyko. I currently live in Edmonton, Alberta, Canada – where I was born and raised.

 What’s your job?

 I am a Coordinator with Edmonton Economic Development Corporation. EEDC is a not-for-profit company strategically focused on Edmonton’s economic future – its purpose is to increase prosperity and the quality of life for people of the Edmonton region by promoting economic development, marketing Edmonton as a tourist destination, and by managing the Shaw Conference Centre and Edmonton Research Park.

 I work within the Economic Development department, focusing on Business and Industry Development. My group is responsible for the attraction of organizations to the Edmonton region and the retention and expansion of existing Edmonton organizations.

Currently, we are working with a variety of stakeholders to ensure the sustainable long-term growth of the Finance, Insurance, Real Estate, and Health industries, as well as Advanced Technologies and Education.

 What’s exciting you at present?

 New Urbanism – a development theory that is focused on creating neighbourhoods that are diverse walkable, accessible, sustainable and architecturally significant. As the world’s urban population increases, cities will need to address their planning policies to ensure that urban communities are able to flourish.

Direct Trade – a huge step beyond free trade – and even a step beyond fair trade – direct trade is a system built on principles of true collaboration, participation and justice. With an increasingly global marketplace, equitable trade practices need to be promoted to ensure that trade agreements are just and profitable for all parties involved.

Moving to Australia! - my wife, a registered nurse, and I have decided to make the move from Canada to Australia in November. We are excited to live, work and play in one of the World’s most beautiful settings. Currently, we are in the midst of Visa applications and actively looking for work.

 Your top 3 tips on how to collaborate?

 1. Come to a consensus on the desired outcomes - having a clear focus helps the group to stay on task.

2. Develop a multi-faceted matrix – ensuring that the individuals represent a variety of backgrounds creates a group that builds on the strength of its members.

3. Appoint a leader to facilitate the collaboration – a leader will facilitate collaboration between individuals to ensure the group works effectively. Don’t be afraid to consult an outside professional.

 Nick Keyko, Business Development Coordinator, Edmonton Economic Development Corporation, World Trade Centre, 9990 Jasper Avenue, Edmonton, Canada +1 (780) 401-7695 nkeyko@edmonton.com

 

UNIDO work on international JVs

The OECD holds centre stage in the West as regards pushing best practice in economic development.

But the United Nations Industry Development Organisation (UNIDO) has been quietly consolidating its reputation as a real player in this field.

Further evidence is provided by its recent publication of “Patterns of Internationalization for Developing Country Enterprises (Alliances and Joint Ventures).”

This UNIDO work argues that foreign direct investment (FDI) and related aspects of MNE activity – subcontracting, original equipment manufacturing (OEM), global value chains, global manufacturing networks, joint ventures – are the key source of technological-economic progress for developing countries.

 Success stories are highlighted in this work – the authors emphasise that successful experiences cannot be simply transplanted. MNEs take their strategic and locational decisions in their stakeholders’ interests, including risk perception, profit expectation, pursuit of market share.

Host countries however have their own values and endowments, cultural/social patterns, and development policy options. And the characteristics of industry competition and factor markets are constantly changing, which adds to the complexity.

 This report is designed to help firms in developing countries to improve their competitive position by linking with foreign partners, leveraging the relationships etc. Particular attention is given to JVs and alliances, including the motivations of the participating enterprises, opportunities for partnerships and their negotiation, implementation and management.

This is of great interest to the Cockatoo Network because it aligns 100% with our objectives. We propose follow-up talks with UNIDO. If you are also interested, please contact us.

Patterns of Internationalization for Developing Country Enterprises (Alliances and Joint Ventures)  Language: English, French, Order No.: ID/436, Price: Euro 30.00 (Go to www.unido.org)

Baccarat jewelry cluster (BEST PRACTICE)

Baccarat is three things – a card game, a company manufacturing crystal, and a town in France.

Hervé Novelli, French Secretary of State for Trade, Crafts and SMEs, has initiated work to set up a cluster to promote the jewelry trades in Baccarat, in the Meurthe-Moselle area – 300km due east of Paris.

The project labelled as a “rural pole of excellence” provides € 2.1 million investment, of which 25% is financed by the State.

The aim is to “establish a synergy of development, creation, and partnerships” and to ensure the Meurthe-Moselle area, which is the birthplace of crystal glass-making in France, a “revitalization of the territory in terms of economy, employment and urban planning”.

As a first step, the renovation of two buildings will be undertaken to provide a home for craft works, design and creative agencies, production, as well as research, training and exhibition facilities to the general public.

(This is a model for others, especially Australia, with significant sums being spent on education and training infrastructure, but minimal thought to bringing companies together to leverage this expenditure – Editor)

Think hubs!

Industry Minister Carr has subconsciously recognised the importance of place is because he is quietly funding industry centres and hubs around Australia. For example, a mining technology centre in Mackay, a creative industries hub around UTS in inner Sydney, a defence hub in Dandenong, a clean energy centre in Newcastle.

These examples of ‘localised capability and competitive advantage’ can equally apply to social and environmental projects. Members are advised to ponder the following:

• The feds are currently announcing a spate of local infrastructure spending e.g. $2.4 million for a 15 hectare eco-tourism precinct on the Swan River, $910k for a Marine Discovery Centre at Bondi Beach. This is smart, because the expenditure aligns with local competitive advantage.
• The Jobs Fund is providing another tranche of relevant expenditure ($650 million) right NOW.
• The Building Australia Fund will eventually roll-out like a latter day Super Auslink program, and the city suits will be looking for local competitive advantage, critical mass and alliance partners.

We are excited by the potential for our members to use the ‘competitive hub’ concept to get some very worthy projects off the ground. Indeed, my crystal ball shows real potential for:

• International aid hubs e.g. Cairns, Darwin.
• Food value-adding hubs e.g. northern Adelaide
• Eco-tourism corridors e.g. East Gippsland, Central Ranges (Victoria), Darling Ranges.
• Logistics hubs e.g. Parkes, Shepparton, Ipswich.
• Historical tourism and lifestyle hubs e.g. Braidwood, Chiltern.
• Environmental management hubs e.g. eastern Adelaide, Sunshine Coast.
• Indigenous arts and culture hubs that actually work e.g. Wilcannia, Broken Hill.
• Recreation, health and social service hubs e.g. Wee Waa, Port Macquarie, Port Augusta. 

 Progressing these possibilities is beyond a gopher writing an application. Contact us for further details.

Japanese urged to facilitate inwards FDI (BEST PRACTICE)

A new report from Harvard Business School researchers suggests that Japan’s hierarchical forms of business organization serve to impede innovation by “locking out” certain forms of new ideas and concepts. The authors say Japan needs to introduce new legislative measures that break up these barriers.

Suggested reforms include stricter antitrust enforcement, improving the legal infrastructure (e.g., supporting training for more business law attorneys), and lowering barriers to foreign investment.

All of these steps will help free up the flow of ideas and creativity in Japan’s business sectors.  “Capitalizing on Innovation:  The Case of Japan,” by Robert Dujarric and Andrei Hagiu, Harvard Business School.

Contributed by Mark Marich at Entrepreneurship.ORG

Universities must engage in regions, says OECD

 A very interesting OECD report “Higher Education and Region’ has landed on our desk, written by Cockatoo member and ‘Oz-phile’ Patrick Dubarle, Paul Benneworth et al. It should be compulsory reading for every Vice-Chancellor, university academic and regional development practitioner in the civilized world. It draws on findings from 14 regions across 12 countries.

 The basic message is that higher education institutions (HEIs) must do more than educate and research – they must engage with others in their region, provide opportunities for lifelong learning, and contribute to the development of knowledge-intensive jobs.

 The report synthesizes the main developments, and provides scores of examples of best practice. Some that attracted our attention are:

• The ‘Knowledge House’ in NE England – addresses the reluctance of SMEs to go anywhere near a university by providing a nifty, common entry point to the five universities in the region.
• University Jaume I in Valencia – helping to transform the SME-based ceramic tile industry.
• University of Sunderland – helping to make Nissan’s new plant the most productive in Europe.
• Provincial University of Lapland – reaching out to remote communities.
• Aalborg University (Denmark) building its education program around Problem Based Learning.
• Monterrey International Knowledge City (MICK) in north east Mexico.

 The book can be purchased on-line at the OECD – ISBN 978-92-64-03414-3. Patrick Dubarle is now a freelance consultant, living at beautiful Meudon – contact him at phdubarle@club.fr

Africa beckons

Cockatoo members are currently involved in follow-up to the visit by the UAE delegation. It prompted a member to raise some very interesting ‘What if’ questions.

 My partner is currently based in Nigeria which I also visit (apart from the Gulf) and, believe me, that is an area where plenty of opportunities exist for an enterprising nation. They have lots of gas and oil reserves and other minerals, with the Chinese very visible in Nigeria sewing up contracts for these natural resources. However the Chinese don’t build back local infrastructure like the western nations, so the Africans are looking for other partners – but money really talks in Africa.

 France seems to be the major source of quality food imports. Quality food is in really short supply and there is major demand. A plane from France lands in Lagos once each week to supply one Victoria Island market, with all the stock sold by day’s end for very high prices e.g. $30 for 500g of ice cream – rich Nigerians and expats willing to pay. In the supermarket, I saw dairy from Ireland, soap powder and biscuits from USA, but nothing from OZ. All the meat/fresh produce seems to be from France. Surely we could undercut?

 Demand for education and skills training is endless and they also need help with managing their infrastructure, setting up regulatory frameworks, logistics/governance programs etc. Africa is emerging. All we see in the media is a constant supply of ‘poor babies stories’ but there are many versions of Africa so opportunities abound. Nigeria has so much oil, gas, mineral wealth not to mention the vast quantity of Aid money which is such an enormous industry one can’t see it ending anytime soon. Contracts in the millions of dollars are freely exchanged. It is all a matter of connecting with the right person in government. Yes there are issues and deals for trade/Aid, but even with that it is a market we shouldn’t ignore.

 Contributed by Fionnuala Livingston, Port Macquarie NSW