Industry clusters have been in the doldrums in Australia for some years. Most of the action has been at the state and local government level, and the initiatives have been patchy and lacking focus. A quick review:
South Australia led with way on clusters during the 1990s with the support of Colloborative Economics (USA) and a host of local champions took up the challenge in water, electronics, geology etc. However, the SA Government closed down it program around 2005 – the alliances are still broadly in place e.g. SA Water Industry Alliance. There is a significant repository of collaboration-aware SA companies for foreign investors to align with.
Victoria introduced its cluster program around 2005, with the championing of the then Secretary of the Victorian Department of Industry (DIIRD). While not large in dollar terms, it has spawned some significant efforts in high technology (e.g. automotive, biotech, food) and regional development (e.g. North East, Ballarat) spheres. Clustering concepts now underpin a number of DIIRD’s programs. The opportunity to link state and federal funding has not been seized to date in respect of cluster programs, although there has been significant co-sharing of infrastructure costs e.g. Synchronometer, medical schools etc.
Queensland is similar to Victoria in that clustering concepts are now broadly accepted, especially in respect of innovation policy. A number of the efforts to establish cluster programs at the local government level have floundered, due to the intermittent, uncertain nature of funding e.g. the recent demise of the Cairns REDC. Nevertheless, the Queensland Government is the most proactive state in terms of investment attraction, and there is an excellent opportunity for it to join forces with the federal government to use clusters as a proactive investment attraction tool.
New South Wales has made a modest effort to date, partly because of its laissez-faire industry policy. There is a view in some quarters that Sydney’s world city status is sufficient incentive for innovative companies to be there, and that the demands on the state’s transport, education and health systems preclude any proactive innovation or investment facilitation programs. Others can rightly argue that State Ministers have been active in promoting the development of clusters and networks – the Western Sydney IT cluster comes to mind. The NSW approach to clusters could receive a shot in the arm as the Rudd Government finalises its innovation program later in 2008.
Western Australia has not introduced cluster programs to facilitate industry collaboration, although it has sought to build physical clusters – the best example is the Jervoise Bay/Rockingham marine engineering precinct. Part of the problem is that the resources boom has consigned innovation and investment facilitation into the background. However WA is a sleeper – it has some very innovative and aggressive companies ready for joint ventures with foreign companies. It is predicted that a cluster program will materialise in order to realise these opportunities.
The Northern Territory has been active in the establishment of industry networks – for example, the outback.net and the Desert Knowledge networks could evolve into industry clusters. Darwin also has a significant marine engineering capability that would arguably benefit from the introduction of clustering initiatives.
The ACT has no cluster programs, although preparatory work has been done in respect of the environment industry (‘Turning Green to Gold’ report, by R. Brown & G. Pryor), the sports industry and print management.
Tasmania has no significant cluster initiatives. A proposal to establish an adventure industry cluster, based loosely on the NZ model, received only lukewarm suppport in 2006. The Intelligent Island program involving considerable federal funding to develop the ICT industry is another opportunity.
In terms of the federal government, the notion of industry clusters is now receiving serious attention. It was not properly understood by the previous government, although there were ministerial pockets of support e.g. Nick Minchin. Inputs from various Cockatoo members has helped the incoming Rudd government to move forward on clustering and globalisation issues. Go to Australian Labor Party : ALP Policy.
The new industry policy, as foreshadowed by Minister Kim Carr, foreshadows seed funding to support region-specific strategies, such as business clusters and networks, to boost the innovative capacity of firms.
There is the possibility that the Minister will decide which of the Action Agendas (developed under the previous government) are worth continuing or resuscitating. The introduction of clustering agendas into these Action Agendas is thus a real option. Industries considered to be ripe for this approach are ICT, biotechnology, food, renewable energy, engineering, and any industries where collaboration and partnering are important. The main impetus is expected to come from the findings of the review of the Innovation Review currently underway. It is instructive that chairman of the review team, Dr. Terry Cutler, has a strong background in cluster development.
Readers will be further updated on the situation in coming months.
