Australia’s Auto future

 

On 15 August 2008,  the Review of Australia’s Automotive Industry was released. Carried out by Steve Bracks (former Victorian Premier) and an expert panel, the review’s recommendations included:

§ A new Global Automotive Transition Scheme to support R&D, design and export.

§ Double to $1 billion the Government’s Green Car Innovation Fund.

§ A restructuring fund to assist the automotive supply chain to improve economies of scale.

§ Reducing the passenger motor vehicle tariff from 10 to 5 percent by 2010.

§ Include road transport in an emissions trading scheme.

§ Encouraging auto exports via FTAs, particularly with the Gulf States, ASEAN and South Africa.

§ Expand access to overseas automotive supply chains through a ‘Team Australia’ approach using eminent automotive ambassadors.

See www.innovation.gov.au/automotivereview

Review of assistance to Australian textiles, clothing & footwear industry

The review by the Taskforceinto the textiles, footwear and clothing industry was handed to the Minister by Professor Roy Green in late August.

 

The AFR ran a front page article on the likely thrust of the report. Judging from the word around the Canberra traps, the AFR article is pretty close to what the feds will finally decide. In brief:

 

§          The tariff reduction to 5% will happen (no big deal – tariff assistance can be swamped by currency fluctuations)

§          Programs to be introduced for workforce and management capabilities, R&D support, adoption of new business models, links to global supply chains (aligns with new Enterprise Connect Program)

§          Building competitive advantage through uniqueness, design, innovation, speed to market etc.

§          Emphasis on fashion and design, which was largely missing from the Button TCF Plan (no-brainer – opportunity to leverage off Melbourne’s longstanding capability, and to link with Milan etc.)

§          Prof. Green said ‘we should be giving as much attention to where value is created as to where assembly is situated’ (totally agree – owners of Quiksilver, Rip Curl and Billabong are sipping wine at Jan Juc and the Gold Coast as you read this)

§          Renewed emphasis on value-adding the wool industry (yes – bring the farmers in from the cold).

 

Some very interesting agendas are about to unfold in TCF. However the Government is not well-equipped to put together international joint ventures due to the demise of Invest Australia.  

Western Australia’s investment hubs

 

We’ve been identifying the main hubs that could form part of a national investment framework. Not in prospect at present, but you must be ready! So, let’s imagine we’re in London or New York and a local investor wants information on what’s on offer.

 

To date we have identified 12 hubs in Queensland, 20 in NSW, 11 in Victoria, 8 in SA and 5 in Tasmania.

 

We have identified 16 hubs in WA. All have good road and air access. Let’s start in the north.

 

Kimberleys – Close to the NT border is Kununurra (pop. 6,000), which developed as a result of the Ord River scheme, and now irrigates ever-expanding fruit, cotton and sandalwood crops. Distinctive features are Lake Argyle hydro energy, the Argyle diamond mine and the strong aboriginal presence. Gee it’s hot. Frontier stuff. Broome (pop. 15,000) – old pearling port transformed by UK bon vivante, Lord McAlpine, and his Cable Beach resort – now a serious hub for eco-tourism, environment, indigenous culture.  Has the opportunity to service the Browse Basin gas fields. Direct air links to Asia.

Pilbara – Moving into the Pilbara region, Port Hedland (pop. 15,000) is dominated by the BHP Billiton iron ore facilities and a significant industrial estate. Fantastic fishing – 18 foot boats occupy every second car port. Neighbouring Karratha (pop. 12,000) is a boom town, with folks living in tents, caravans and sea containers on front lawns. It has an annual Fenaclng Festival – an acronym for iron (Fe) and salt (NaCL) plus liquefied natural gas (LNG). These three industries sum it up.

Gascoyne & Mid West – Further south is the Gascoyne region where Carnarvon (pop. 10,000) is the commercial and administrative hub. Major industries are prawns, game fishing, horticultural, mining, and tourism blessed with world-class national parks e.g. Shark Bay, Ningaloo Reef. Also, Exmouth Marina Village is awaiting development. Geraldton (pop. 35,000) is the Mid West region’s main centre, and going through a huge boom. A classy city, and relatively close to Perth. Industries include mineral sands, iron ore, crops, wool, lobster. Well-developed transport infrastructure now that Oakajee Port has the go ahead. And Port Kalbarri, just to the north, is absolutely idyllic. Also likely ambassadors in TV identities Ernie Dingo and Tasma Walton.

Wheatbelt – WA’s main grain-growing area. It is sprinkled with some good towns – Northam (10,000 pop.), Merredin, Moora and Narrogin have the infrastructure to support foreign investment in grain-based product for export. Wave Rock and the Pinnacles are tourist attractors.  

 

Perth – Four four well-recognised hubs. There is the CBD and inner-city business districts; the Fremantle-Kwinana-Rockingham corridor which has grown to a world-class industrial agglomeration; Eastern Perth corridor, where most suburbs start with B – serious industrial capability and proximity to the airport; and the north-west growth corridor around Yanchep (Bond’s former real estate play), Joondalup and Wanneroo. The Neerabup industrial estate is currently fast-tracking 400 ha.  

Mandurah (pop. 71,000) is the key city in the Peel region. A commuter belt to Perth, resort centre, retirement hub. Like Bunbury (further to the south) it’s the real deal in terms of wine, forestry, mining, mineral processing (bauxite, alumina, gold), agriculture, equine pursuits, fishing, tourism and beaches.  The passenger light rail link to Perth was opened in 2008 and is delivering  spin offs  for residential and  commercial  land. 

Bunbury (pop. 56,000) is a world-class hub two hours drive south of Perth. A wonderful mix of forestry, wine, gourmet food, eco-tourism, fruit, livestock, dairying, coal-fired energy, alumina, mineral sands, tin, tantalite, chemicals. The Kemerton industrial estate is a major mineral treatment and engineering cluster. TAFE and University campuses.

Heading further south we skip around Busselton and Margaret River and the next real hub is Albany (pop. 25,000), the key city of the Great Southern region. It has a deepwater port, and a well-established sense of identity with timber, wool, wine, broadacre crops, essential oils, fishing and meat processing for international markets. It also has some effective local champions. TAFE and University campuses.

Moving eastwards is Esperance (pop. 15,000) which is a major port for grain and minerals. Its lead pollution problems have drawn unwanted publicity. It nevertheless has magnificent fishing, aquatic sports and lifestyle attributes.

And heading inland is Kalgoorlie-Boulder (pop. 30,000+), the heart of the Goldfields-Esperance region. The gold and nickel industries are booming. Major rail-road-air links to Perth and the east, and a LNG pipeline from the Pilbara. Its brothels are a tawdry reminder of its rollicking past. 

Glass half empty…

 

‘Cockatoo’, as a democratic institution, allows members to freely express their views, as long as they’re not defamatory or ridiculous. A Canberra-based member filed this report on Minister Carr’s Press Club address.

 

We the Government and the APS knows better – At his National Press Club speech on 3 September to address innovation and the inclusion of the arts and humanities into science funding, the Minister repeated that Canberra and its officials know more about innovation, competition and the logic of business and what makes good research than do businesses or the universities.

 

He said the car industry employs 60,000 people and needs to be assisted to make cars people want, despite its self-interest failing to do it. So far, he said, it has not performed. Ditto for the textiles sector which also needs structural support even as he described its high level of innovation and flexibility.  He finds we do not have enough PhD graduates being injected to help smarten up industry especially in the SME sector. Minister Carr sees the need to cajole SMEs into sponsoring doctoral candidates for the future workforce even though most SMEs do not need science PhD graduates to make their business work.

 

Government officials will assess universities’ claims for funding under new national research “mission” statements. Officials, under Minister Carr’s conception of industry development, know more than industry about business and will pay grants for business to live up to Government goals. 

 

Throughout his speech – on nearly all occasions where a sectoral issue was addressed – it was the reverse of usual business dynamics. Government directs, business invests, because Government knows best.

 

The problem which escaped no one is that the Rudd Government has not stated clear industry and innovation goals, reasons for those goals, and related incentive-based and regulatory commitments to achieve them. It has spoken atmospherically, not concretely, and under current language is unlikely to be so.

 

If the car industry is as Minister Carr says “strategically important” does this mean continued taxpayer-funded jobs for a sluggish manufacturers and dollars for corporate losses, or does it mean paying what it takes to have an indigenous vehicle manufacturing capability in case our sea-lanes and imports are cut? If so, a strategic autarky in an uncertain future world is the goal, then let’s hear it for what it is, not just a revisitation of policy ideas now, as one senior official said at the speech, which were coming out of the ALP in 1995.

 

What he means is that the Government is rich and intends to pay those it sees as allies, but cannot yet find the words to do. Perhaps they will emerge from the Review season.

  

Cluster ScoreCard – Adelaide’s Advanced Manufacturing cluster

 

The Cockatoo has a Cluster ScoreCard which is basically an advance on Porter’s Competitiveness Diamond – we use it to provide an objective analysis of a cluster, to highlight deficiencies, and to formulate Action Agendas.

 

We analysed Adelaide’s advanced manufacturing (AM) industry cluster in 2006, and it is still very accurate according to local players. The cluster rates at 70.2 out of a maximum 100 points on our Cluster ScoreCard, which encompasses 10 performance criteria. Excerpts from the analysis are as follows.

Attribute 1 – Critical mass of local suppliers – rating of 7/10

§          Reasonable concentration of companies. Adelaide ranks 3^rd behind Melbourne and Sydney. The core comprises 25-30 companies, near vehicle manufacturers and Technology Park.

§          Only 25% have significant global supply chains. Moderate beacon for investors, technology, venture capital. Good technical back-up, but banks are not attuned to financing needs.

Attribute 2 – Specialised infrastructure – rating of 9/10

§          Adelaide is an attractive industrial location due to its compactness and the good road, rail, sea and air services. Substantial flat land, and building costs are very competitive.

§          Considerable R&D and education infrastructure – arguably an over-supply of this infrastructure.

Attribute 4 – Social capital – rating of 8/10       

§          Elizabeth and Mawson Lakes are attracting interest because of examples of inter-firm collaboration.

§          Social capital quite strong. Economic adjustment since 1990s led to stronger sense of community.

Attribute 6 – Governance structures – rating of 3/10

§          The majority of the companies and development agencies don’t think of it as an industry.

§          Adelaide’s key industries are seen as automotive, defence, electronics, information technology and perhaps food processing. AM firms are seen as suppliers to these industries.

§          The roles of the various development agencies are not understood by the industry.

                            

Attribute 10 – Existence of Threat – rating of 8/10

§          Biggest threat is the possible closure of Mitsubishi Motors Australia (subsequently occurred!)

§          Other threats are shortages of skilled labour, and low cost-competition from Asia.

As a result, companies are diversifying into medical equipment, defence,  food processing & mining.

Innovative Regions agenda – Australia

 

The Rudd Government’s national $20 million Innovative Regions Centre, with its HQ at Deakin University’s Geelong campus (Vic), was opened in August 2008.

Industry Minister Kim Carr said it will help address the challenges faced by Australia’s regional SMEs in today’s increasingly global marketplace. “The Innovative Regions Centre will operate as a source of advice and services to help regionally based SMEs become more innovative, efficient and competitive.”

The facility is a part of the $251 million Enterprise Connect network. This centre aims to provide services and support for about 1,500 companies annually by way of expert, practical advice and support. The centre is to support businesses in targeted regions around the country.

Senator Carr announced Professor Roy Green (Cockatoo member) as Chair of the Centre’s Advisory Board. “Professor Green, the Dean of the Macquarie Graduate School of Management in NSW, brings great expertise and experience …in providing advice on the implementation of the Innovative Regions Centre and the ongoing strategic direction of the centre,” he said.

Visit www.enterpriseconnect.gov.au or ring 131 791.

Clusters and Zones on radar in Algeria

The Algerian Government is considering the creation of a competitiveness cluster in the region of Cap Djinet.

 

The agenda is led by the group Cevital. The National Agency for the Development of investment will soon submit it to the National Council of Investments.

 

The aim is to develop partnerships with foreign companies in steel, aluminium, automotive, chemical/petrochemical and paints. The agenda might involve an Integrated Activities Zone where companies, universities and technological partners could work in synergy.

 

Source: SPL Info

Climate proofing guide launched

 

The World Bank has launched a practical guide to help city managers and planners in the Asia Pacific protect their cities from the effects of extreme environmental events.

 

It is a joint effort with the UN and the Global Facility for Disaster Reduction and Recovery (GFDRR). It all seems a bit dramatic, but it nevertheless sketches the measures to assist the areas most susceptible to environmental events.

 

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/0,,contentMDK:21863994~pagePK:146736~piPK:146830~theSitePK:226301,00.html

 

Source EDGE News

EC Innovation Hubs – pointer for other regions!

 

In 2005, EC President José Manuel Barroso came up with the idea of EC innovation hubs. And the Board of the European Institute of Innovation and Technology (EIT) is now working towards the launch in 2009 of the first hubs – to be known as Knowledge and Innovation Centres (KICs).

 

They will cover climate change, renewable energy and ICT. The first Board meeting is in Budapest on 15 September.

 

The details have not been revealed, but there are references to virtual centres of scientific collaboration, and the bringing together of ‘departments of universities, companies and research institutes to form an integrated partnership to perform education and innovation activities in inter-disciplinary strategic areas’.

 

Sounds like the usual stuff, although the difference is that they’re aiming to stimulate collaboration across the EC. It provides an interesting precedent for ASEAN and APEC as they attempt to harness technological collaboration in the Asia Pacific region. The Cooperative Research Centres (Australia) and Crown Research Institutes (New Zealand) could provide nodes of such networks. However it will be some time before the CRCs are ready to drive international collaboration. Their combined track record has been underwhelming, and the recent review of the CRC Program makes no major references to the role of CRCs in international collaboration. (Source: EDGE News)

Go to http://www.euractiv.com/en/innovation/eu-names-new-board-technology-institute/article-174658

The Agglomeration of Ethnic Inventors

 

Researchers at Harvard Business School have been studying the changing nature of innovation by tracking the ethnicity of US-based inventors.

 

The study identifies a large increase in the number of Chinese and Indian inventors during the 1990s. The largest portions of patenting by ethnic inventors occurred in three locations – San Francisco, LA and New York. And 80 percent of all ethnic patenting was in the largest metro areas.

 

These concentration effects are most pronounced in the private sector, as opposed to government agencies or universities, which are in fixed locations.

 

Go to “The Agglomeration of US Ethnic Inventors” by William R. Kerr (Source: NDOE)