Archive for February, 2006

Defence industry support

February 18, 2006

There is lucrative business to be won in the $400 billion US defence and aerospace markets.

Our UK colleagues advise that a Small Business Innovation Research program is sponsored by US agencies. They offer 51% of grants, ranging from $100k to $1 million to support new products and R&D. 

Here in the Antipodes, there is nothing as proactive as this to facilitate R&D joint ventures in the defence market. The main mechanisms are:
§          the Industry Capability Network, which matches supplier capability with the procurement requirements of the global defence and aerospace industry.
§          The requirement by the Defence Department for prime contractors to furnish Australian Industry Involvement plans when bidding for contracts. This has delivered very good outcomes for some SMEs. However the ability of this leverage to build critical mass and economies of scale is limited by the absence of a federal policy on the regional location of defence facilities.  

Wine supply chains: Australia-South Africa-Canada?

February 17, 2006

Philippe Roy (Ottawa) writes ‘We continue to enjoy Australian wines in Canada, both reds and whites, all of a uniformly high quality, full bodied and lots of diversity in characteristics and flavours.

Can you do an article on Australian wine clusters, and invite other countries and regions to respond with wine cluster study reports? I can see Australia, NZ, France, Italy, Spain, Portugal, USA, South Africa, Chile, Argentina, all over a longer period of time. Winemaking is a multi-billion dollar industry globally.’ Cheers! Philippe Roy, Cluster Pathfinders, Ottawa, Canada. 

Professor Ian Marsh (Australian National University) replies
Australian wine industry has achieved spectacular success internationally – in just over a decade. While a number of environmental and external factors helped, the progressive development of a cluster structure introduced the critical element.

This is the central finding of a study Brendan Shaw and I conducted for the Australian Business Foundation. (See

The process began with the formation of a strategic plan for the industry (Strategy 2020). It  demonstrated the scale of the business development opportunities, particularly growth from exporting, the requirements for realising these opportunities, and why collaboration held the key. The opportunities exceeded what any producer could achieve by solo action. This report provided the grounds for ‘buy-in’ and collective ownership by producers.

The areas where collaboration and commitments were required from producers, researchers and marketeers were clearly specified. Industry leaders championed these proposals at industry conferences and forums.

Research and marketing agendas were established – and crucially, the agencies needed to drive collaboration were established. Where they already existed, the institutions adapted their programs to the new strategies. Over the course of a few years, 8 agencies were established or reformed to manage implementation. The most critical were the Australian Winemakers Federation (overall strategy), the Wine & Brandy Marketing Corporation (international market development) and the Grape & Wine Research Board (R&D).

In its appraisal of the industry, the respected Dutch assessor, Rabobank, scored the Australian effort against a variety of indicators e.g. natural advantages, economic context and the industry’s self-made capabilities. The Australian industry scored best in this latter category, clearly affirming the contribution of clustering to its ongoing success.   

Nigel Gwynne-Evans reports from South AfricaThe Wine Industry Plan is hot off the press. It is a commitment by the South African wine industry to deal with the legacy of a highly regulated economic environment and the challenges of increasing global competitiveness and discrimination along racial and gender lines. Aims to establish a “vibrant, united, non-racial and prosperous SA wine industry”.The South African Wine & Brandy Company is the key body, with 5 offices involved – Social & Economic Development; Human Resources Development & Training; Technology Innovation & Transfer (Winetech network); Generic Market Development & Promotion via Wines of South Africa (WOSA) and SA Brandy Foundation; Knowledge & Information Systems through SAWIS.  An interesting notion is a Wine Industry Scorecard (WIS) – to manage the process and create synergies. Each signatory will implement transformation strategies to be monitored by the SAWB.   Black economic empowerment will be attended to within all of these indicators.  A proposed checklist of indicators and benchmarks will be developed in the 10 categories:– Human resources development
–  Social upliftment & rural development
–  Business development, service providers & input suppliers
– Ownership & equity schemes
–  Governance systems & participation
Quality & integrity
– Technology, innovation & transfer
– Market development & promotion
– Environmentally sustainable production practices
– Economic performance, efficiency & competitiveness.
The plan is available from South African Wine & Brandy Company – (Is there a window for technology transfer and supply chain initiatives between South Africa and Western Australia? Any interest, readers? – Editor).