Archive for January, 2005

‘Collaboration-ready’ firms, says Hugh Forde

January 17, 2005

Recently we featured Hugh Forde (Director, Cluster Program at Business SA) who has vast experience in generating collaborative outcomes. The economic literature talks about investment-ready and export-ready firms. Hugh has extended it! He is absolutely on the money. See below. 

The function of the collaborative process is to enable firms and other participants to appreciate a wider industry and global context in which they can expand their competitiveness and market growth.  

Firms can achieve this by discussing, in an industry or international context, their respective contents with other firms and/or institutions i.e. research organisations, universities, government agencies, service providers. Industry clusters are a proven mechanism for initiating and facilitating this process.

Alas attempts to facilitate this approach across clusters in South Australia have been captured and constrained by the content syndrome. People are reluctant to practice what they preach and to talk with each other about the respective content of their programs. A ubiquitous barrier is protection of intellectual property. The challenge for clusters is to develop tools and strategies to facilitate implementation of their own collaboration strategies.

These should focus on ‘collaboration ready’ firms. These are firms:
§          Exporting as a key element in their strategic approach to business.
§          That have reached maturity in their domestic markets.
§          Entering overseas markets because there is no market space or application locally.
§          Already using alliancing successfully. 

Optimizing for innovation – US Competitiveness Council

January 17, 2005

The final report of the US Competitiveness Council has been released. Called the Innovation Initiative, it examines how America can compete in today’s more connected global marketplace.

It argues that the US remains the world’s innovation hub, but its dominance is not guaranteed. Indeed, many warning signs, such as declining immigration of skilled scientists and engineers, are emerging.

The report’s basic message is that, for the past 25 years, the US economy has succeeded, through innovative management and smart investments, in optimizing itself for efficiency and quality. It must now focus on optimizing for innovation. The report contains numerous insights and important recommendations.

Among its proposals are:
§          Build 10 regional Innovation Hot Spots in the next five years.
§          Designate a lead Federal agency and an inter-agency council to coordinate economic development programs around innovation-led growth.
§          Increase the availability of early-stage risk capital with tax incentives, expanded angel networks and new seed capital funds.  

The report is available at www.compete.org 

‘Offshore manufacturing – what’s working, what’s not’

January 17, 2005

The move to off-shore manufacturing as a means of reducing labour costs hit Australia and New Zealand more than a decade ago – so it’s old news.

 

Interestingly, the National Dialogue on Entrepreneurship says that while the international outsourcing debate has cooled a bit in the US, the issue still warrants public attention.

 

A new series of reports from ‘Knowledge at Wharton’, an on-line newsletter from the University of Pennsylvania’s Wharton School, examines new trends in offshoring.

 

Experts predict that closer collaboration between US and overseas partners is likely, and that new hybrid organizational forms will emerge. It may become difficult to make clear distinctions between the parent company and the outsourcing partner. Others predict that India will face increased competition as the primary locale for IT offshoring e.g. from Eastern Europe.

 http://knowledge.wharton.upenn.edu/index.cfm?fa=SpecialSection&specialId=25&CFID=3547172&CFTOKEN=44960870 

Regional grants – problem was predicted!

January 17, 2005

We do not expect much to come out of the Australian Senate’s Enquiry into regional grants.

DOTARS’ administration of the program is very tight and painstakingly laborious – to avoid any criticism of ‘whiteboard’ decisions.

But we did predict that the heat would be on the politicians for holding back the announcement of grants until the election was looming. There is nothing illegal about this, but back in August, I wrote in Local Government Focus magazine as follows: 

“The compression of expenditure commitments into a narrow window, and the accompanying uncertainty for those with funding applications in the system, raises the question of some sort of Code of Practice to govern the processing and announcement of government grants.

From where I sit, there is a case for a cap to be placed on the percentage of program expenditure that can be announced in the run-up to elections. Another option, which the Department of Finance has surely ruminated over, is the introduction of quarterly expenditure allocations without rollovers – this would mean that if Ministers don’t spend their budgets within a specified period, they would lose it. A bit radical perhaps.’

Ireland – new focus on commercialisation

January 17, 2005

Last month, Dr. Roy Green, Head of the Department of Management, National University of Ireland, Galway gave an interview on Melbourne radio. Excerpts follow. 

In the 1980s, Ireland was essentially a basket case in Europe – 17% unemployment, 20% inflation, national debt higher than annual GDP.

 

It was really in a serious predicament. It therefore developed a social partnership involving government, unions and business, and a framework in which new economic policies and an emphasis on education and research could take effect.

It opened itself to the international economy, looked for international investment – any investment, anything that would create jobs. This led to large companies setting up to manufacture (with cheap labour, low corporate taxes) for the EC market, especially in computer hardware, pharmaceuticals etc.

By the mid 1990s, Ireland was the world’s biggest software exporter, and also exporting PCs. But it was becoming evident that Ireland was not a technology maker, it was a technology taker.

Thus in the mid 1990s economic policy became more discriminating. Within the context of the social partnership, some very far-sighted civil servants, with leaders of business and unions, formulated policies that targeted areas of global growth that were not simply dependent on duplication of American software for the EC market or the production of PCs.  

There is a high degree of government intervention in Ireland in the context of making firms competitive in global markets. While there is a healthy respect for the market environment in which Ireland operates, they’re not going to leave their industry policy to chance.

The Irish government set up the most significant review of industrial policy since the Telesis and Culliton Reports of the late 1980s/early 1990s, which established such very effective institutions as Enterprise Ireland, which has developed supply chains and industry clusters and identified areas of growth for Irish industry. The new review, released in 2004, concluded that Ireland had not done so well in developing its own R&D and innovative capacity. It is suggesting very large increases in funding on top of previous funding in basic and applied research (this level of investment is huge for a small economy).

However a weakness in the Irish economy (and in Australia) is the lack of the ability of institutions to translate successful research into commercial products and processes. Again, the Irish government is not leaving this to the market. It is intending to bring the universities together to cooperate. It doesn’t necessarily have the critical mass of big research-intensive universities in the US like MIT and Princeton – so it’s bringing the universities together via a pooled approach to technology transfer and commercialisation of research. It sees this as the key to competitiveness over the next ten years.

More info – http://www.nuigalway.ie/management/roy_green.html