Identifying smart localities

As a callow youth, I was led to believe that Victoria was the smartest state in the Commonwealth. In an insulated environment, who could ever question Premier Bolte or the Melbourne Sun? South Australians had a serious chip on their shoulders. Queenslanders’ brains suffered from the combined effects of XXXX and sunshine. And occasional forays to Sin City confirmed that NSW citizens were inferior in so many ways. Melbourne was an absolute hot bed of style and innovation.

Fast forward to the 21st Century where we have North Sydney, Noosa, the Gold Coast and Canberra claiming to be home to the brightest and most creative people.

While this might be dismissed as harmless posturing, the fact remains that governments collectively commit substantial sums to ‘smarten up’ their cities and towns. And better understanding how milieux of talent create wealth goes to the heart of industry and regional development policy.

 The UK’s National Endowment for Science, Technology and the Arts (NESTA) has been studying why certain places are poles of attraction in the economy. Its concern is that because innovation policy has been set at a national level, there is no appreciation of the widely differing innovation performance and needs of regions and localities.

NESTA argues that every region has an innovation system of sorts, but many lack the full suite of assets to stimulate innovation. Even where the assets are present – universities, TAFEs, high tech companies, entrepreneurs, risk capital, R&D institutions – they may not ‘connect’ properly, thus leading to sub-optimal technology flows and commercial outcomes.

The same situation applies in Australia, where we have no method of measuring innovation at the local level, and no track record in connecting the assets that make up local innovation systems.

For example, the locational decisions associated with the roll-out of Howard’s Technical Colleges, and earlier efforts with Cooperative Research Centres and regional universities, have been criticised for a lack of connection to other regional assets and actors.

For a nation with massive locational issues, we really must get a handle on this. However the economic literature on regional innovation measures is rather obscure. Accordingly, we are proposing to undertake a research study to develop some simple and measurable indicators. What we want is a user-friendly mechanism that explains how North Sydney rates against the Monash and Parkville Precincts.

It will also shed light on what additional capacity might position Daylesford, Torquay, Cairns, Tamworth, Angaston or Albany as diamonds of the future. If your council is interested in understanding how your community rates in the innovation stakes, please contact us ASAP.

Infrastructure Australia – preliminary audit

Infrastructure Australia has completed its audit of the nation’s vital economic assets, and a list of priority infrastructure proposals.

Infrastructure Minister Albanese received the report in December from the chair, Sir Rod Eddington – 94 infrastructure proposals were identified from 1,000+ put forward by state/territory governments, councils, business groups and the public. A final Priority List is due by March 2009. The analysis concludes that future public and private investment needs to be directed towards:

1.       A more competitive broadband system;

2.       Extending the national energy grids – for power & gas markets, renewables;

3.       Port productivity and associated land transport links;

4.       Lifting the amount of rail freight;

5.       Preparing for the impact of climate change on water supplies;

6.       Expanding public transport services within cities;

7.       Improving services to Indigenous communities.

The Minister says this is ‘an historic opportunity for the Australian Government to play a much more hands on role in infrastructure investment’.

We totally agree, but foresee huge problems for the Government in managing expectations. As one contact within the federal bureaucracy commented ‘some state governments have put forward some real try-ons’ – the inference being that the proposals would only be viable with soft money from the feds’ Future Fund.

We foresee major clashes on this issue, and the current economic climate will ensure no major funding decisions in the short term. The Very Fast Train (Sydney-Canberra-Melbourne) has been dusted off again. Wise heads in Canberra say this project is at least 30 years away.  Next month – our analysis of the best of the 94 proposals.

Go to http://www.infrastructureaustralia.gov.au/publications.aspx

Entrepreneurship in the Northern Forest of USA (BEST PRACTICE)

 

The decline of forestry and other economic anchors has created a challenging economic climate in Maine, New Hampshire, New York, and Vermont.

 

A new regional coalition – the Northern Forest Sustainable Economy Initiative, is examining new solutions for revitalizing the area’s economy.

 

A new report contends that entrepreneurship should be a critical part of the mix. It  calls for a new system of innovation networks and entrepreneurial clusters that better link regional businesses to one another and to support programs at local universities, non-profits and government agencies.

 

The report recommends a focus on the opportunities created by the region’s beauty and natural assets. This could occur through efforts to promote eco-tourism, adventure recreation and the development of sustainable wood industries and products.

 

Go to A Strategy for Regional Economic Resurgence. Source: NDOE

 

Entrepreneurship Policy in the Nordic Countries

Most Nordic countries have been pursuing aggressive policies to promote entrepreneurship – a new report from Norway’s Nordisk Innovations Center assesses how they’ve performed.

 

The report recognizes that Nordic nations are making major investments, especially in areas related to R&D spending. It also notes an increasing convergence between entrepreneurship and innovation policies.

 

Yet the report criticizes the absence of effective program evaluations. There are poor linkages between researcher and policy makers, and most policies are developed in a top-down manner. Policymakers must do a better job of reaching out to entrepreneurs, and designing programs that meet their real needs and demands.

 

Go to Entrepreneurship Policy in the Nordic Countries; Perspectives of the Development Since 2003.

 

Nestlé wins accolades in Vietnam (BEST PRACTICE)

 

Michael Porter, in his recent Vietnam address, stressed the need for a Corporate Social Agenda.

 

Somewhat surprisingly, he used the example of Nestlé, which entered the poor Moga region of India in 1962.

 

In this case study, the local milk supply was hampered by small parcels of land, poor soil, periodic droughts, animal disease, and lack of a commercial market. Nestlé therefore established local milk purchasing organizations in each town, and invested in improving the competitive context as follows:

 

§          Collection infrastructure such as refrigerated dairies was accompanied by veterinarians, nutritionists, agronomists, and quality assurance experts to assist small farmers.

§          Medicines and nutritional supplements were provided to improve animal health.

§          Monthly training sessions were held for local farmers.

§          Wells to secure water supply for animals – with financing and technical assistance from Nestlé.

 

Nestlé has now built a productive milk cluster in Moga, buying milk from more than 75,000 farmers through 650 local dairies. Moga has dramatically improved social conditions.

 

Professor Bhide’s Venturesome Economy!

Professor Amar Bhide has captured worldwide interest with his latest offering ‘The Venturesome Economy: How Innovation Sustains Prosperity In A More Connected World’ (Princeton University).

As Clancy Yeates pointed out in the Sydney Morning Herald in December, Bhide’s thesis is that the “techno-nationalists” are fighting the wrong battle – no one disputes R&D is critical for creating economic wealth over time, but it’s too simplistic to see the benefits of a new idea going only to the country where it takes place.

Instead, globalisation means the benefits of a good idea can be spread throughout all the links in the chain of production. And it’s not always the inventor who benefits.

For example, the iPod has been tremendously profitable for Apple – sales of $150 million and climbing – but it was invented by Singapore’s Creative Technology and in fact received $100 million from Apple for a patent infringement. But Apple’s contribution was to create a novel fashion item, which led to spectacular sales, especially in the US. iPods are assembled in China with parts from elsewhere in Asia, but Bhide says the value add through marketing, selling and distributing iPods in the US is about the same as its production value.

In short, the iPod is an example of how US needn’t be locked into a “winner takes all race for scientific and technological leadership” – innovation on foreign territory has helped the US economy.

Source: NDOE.

Singapore exaggerates claims

In 2007, Singapore identified the Clean Energy sector as a strategic growth area.

Building on this, the Singapore Economic Development Board announced a joint venture between VDE Institute and Fraunhofer Institute for Solar Energy Systems (ISE). VDE Institute is an EC institution that tests and certifies electrical appliances, components, systems etc. while Fraunhofer ISE is a well-known German research institute.  

The SEDB claims the deal is a strong endorsement of the nation’s efforts at developing its solar energy industry, and that it’s the first Southeast Asian hub for solar photovoltaic testing and certification.

The SEDB further trumpets that it’s a ‘new milestone for the local solar industry’ and is the latest addition to an already vibrant Clean Energy sector. It breathtakingly notes that companies such as Renewable Energy Corporation, Oerlikon Solar and Norsun have already set up shop, and that the industry is forecast to contribute US$1.2 billion to GDP and to create 7,000 jobs in manufacturing, training and R&D by 2015.

However we looked more closely at the information provided, and we determine that JV is valued at only US$550k. We all tend to forget that Singapore is smaller than the economy of Victoria. (We still admire their proactive industry policy).

Vietnam needs major administrative reforms, says Porter

 

Professor Michael Porter gave a seminar on global competitiveness in Ho Chi Minh City in December – 700 were in attendance!

 

He said that Vietnam has achieved remarkable growth and progress over the last two decades, but the reforms are not sufficient enough to help it move up to an average-income nation; Vietnam’s reforms are fragmented.

 

He suggested that Vietnam needs a long-term economic strategy and a set of correlative factors, insisting of innovative policies and strict mechanism and implementation.

Vietnam has made substantial progress in opening up the financial markets. Vietnam should continue this policy in line with WTO commitments and build an efficient, independent financial management paradigm.

It needs a totally new approach in administration reform, including assessing and managing regulations, as well as reforms in human resources; State-owned enterprises. Other key messages included:

§          Vietnam’s clusters tend to be narrowly focused on individual products.

§          There is limited collaboration among companies, suppliers and other institutions.

§          Some clusters, like coffee, can significantly grow if they adopt a collaboration approach.

§          Cluster-based development thinking is crucial in improving the delivery of other economic policies.

§         Need to focus on skill development around clusters; FDI attraction/industrial zones around clusters; quality and technology transfer; upgrading all existing and emerging clusters.

Aquaculture – invitation from Chennai

I read with great interest about your Cockatoo Network. Our prime areas of interest are Aquaculture (Barramundi Aquafarming) and Marine Biotechnology (production of Chitin & Chitosan).

Maritech has been involved in development, implementing and operating Aquaculture projects since 1989 in India, Malaysia, Sri Lanka, Tanzania, Saudi Arabia, etc. as Project Consultants. We have played a key role in transfer of technology in India during the boom days in early 1990s.

Barramundi farming & Marine Biotechnology have a large scope & potential in India. We are keen to cooperate with your network to establish collaboration and investment in India. Also, there is some interest among Indian investors to look for potential in Aquaculture in various South East Asian countries.

Let me know how we can collaborate with you.

Contributed by S. Santhana Krishnan, Chief Executive, Marine Technologies
37, 1st Street, Anna Colony, Besant Nagar, Chennai 600 090, INDIA Tel.91-44-4551 1214

(Certain Cockatoo members have already replied, and networking activity is underway – Editor)

Booz study of corporate R&D spend

Corporate innovation strategies are becoming more global – multinational companies are spending a significant – and growing – share of their R&D money outside the countries in which they are headquartered.

 

Booz & Company’s annual Global Innovation 1000 study found that in 2007, the top 80 U.S. corporate R&D spenders deployed US$80.1 billion of their $146 billion R&D funds overseas.

 

The top 50 European companies spent $51.4 billion of their $117 billion total outside the continent. In Japan, the top 43 Japanese firms exported $40.4 billion of their total $71.6 billion to other countries.

Go to Beyond Borders: The Global Innovation 1000 by Barry Jaruzelski and Kevin Dehoff