Archive for July, 2010

Reconstruction Economics for US Military?

July 14, 2010

Washington’s approach to rebuilding economies devastated by conflicts and natural disasters is flawed. It should be encouraging US -style entrepreneurism and allow the U.S. military to help.

 Economic growth is critical to establishing social stability, which is the ultimate objective of counter-insurgency campaigns and disaster-relief efforts. Various obstacles – such as insurgencies and inadequacies in infrastructure – have made economic development difficult in these countries, but these difficulties cannot be blamed exclusively on such obstacles.

 A central element in the failure to establish robust economies in war-torn or disaster-stricken countries is the prevailing doctrine of international development, according to which strong economies cannot emerge in poor countries. Yet there is a proven model for just such economic growth right in front of U.S. policymakers’ eyes – the entrepreneurial model practiced in the US and elsewhere.

 The model rests on the dynamism of new firms. Washington’s recent engagements have made it appreciate that post-conflict economic reconstruction must become a core competence of the U.S. military. But this appreciation hasn’t been followed by sufficient enabling actions. The U.S. Army Stability Operations field manual (2009) offers no guidance on what role economic development should play in the United States’ post-conflict strategy or how to help build dynamic, growth-oriented economies. The manual epitomizes the central-planning mindset that prevails in the international development community.

 It is imperative that the U.S. military develop its competence in economics – establish a new field of inquiry that treats economic reconstruction as part of any successful three-legged strategy of invasion, stabilization or pacification, and economic reconstruction. Call this “expeditionary economics.”

 Source: CARL J. SCHRAMM, President of the Ewing Marion Kauffman Foundation and a co-author, with William J. Baumol and Robert E. Litan, of Good Capitalism, Bad Capitalism.

 (Schramm makes good points – but we think ‘reconstruction economics’ is a better term. And such efforts will face huge hurdles where the local citizens (e.g. Vietnam, Iraq, Cuba) associate a foreign entrepreneur with their former foes. Surely a multilateral effort under the UN umbrella is the way to go. – Editor)

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A brief lesson in political economy…

July 14, 2010

 SOCIALISM – You have 2 cows. You give one to your neighbour.

 COMMUNISM – You have 2 cows. The State takes both and gives you some milk.

 FASCISM – You have 2 cows. The State takes both and shoots you.

 BUREAUCRATISM – The State takes both, shoots one, milks the other, throws the milk away.

TRADITIONAL CAPITALISM – You have two cows. You sell one and buy a bull. Your herd multiplies, and    the economy grows. You sell them and retire on the income.

 SURREALISM – You have two giraffes. The government requires you to take harmonica lessons.

AMERICAN CORPORATION – You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow has dropped dead.

FRENCH CORPORATION – You have two cows. You go on strike, organise a riot, and block the roads, because you want three cows.

JAPANESE CORPORATION – You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

GERMAN CORPORATION – You have two cows. You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

ITALIAN CORPORATION – You have two cows, but don’t know where they are. You decide to have lunch.

RUSSIAN CORPORATION – You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka.

SWISS CORPORATION – You have 5,000 cows. None belong to you. You charge owners for storing them.

CHINESE CORPORATION – You have two cows. You have 300 people milking them. You claim that you have full employment, and high bovine productivity. You arrest the newsman who reported the real situation.

INDIAN CORPORATION – You have two cows. You worship them.

BRITISH CORPORATION – You have two cows. Both are mad.

IRAQI CORPORATION – Everyone thinks you have lots of cows. You tell them that you have none. No-one believes you, so they bomb the **** out of you and invade your country.

NEW ZEALAND CORPORATION – You have two cows. The one on the left looks very attractive.

AUSTRALIAN CORPORATION – You have two cows. Business seems pretty good. You close the office and go for a few beers to celebrate.

Contributed by a recently-retired OECD economist, Paris

Always handmade – Parmigiano in Reggio Emilia (BEST PRACTICE)

July 14, 2010

 This is one of the world’s best-known and most established clusters. Situated in Emilio-Romagna, the heartland of business clusters in Italy, the cluster can trace its roots to the 13th century.

 It attributes its distinctiveness to the taste that originates in place of origin, long aging process, natural fermenting agents and lack of any additives, and to the unusual cooperation among the milk producers, cheese makers, and agers who refine the cheese. Every step in the process is strictly regulated, from what the cows are fed (hay), how often they are milked (twice a day), the separation and the production steps.

 In 1901 the Reggio Emilia Chamber of Commerce established a union between producers and traders of cheese to brand its origin. In 1928 a voluntary Consortium for Parmigiano Cheese was established, and since 1955 it has protected its brand and prevented those outside Parma, Reggio Emilia, Modena and Bologna from using the name or mark fraudulently. The EU’s campaign against the use of protected European food names by producers outside the designated region of origin is also intended to protect the name “Parmesan” from cheese products originating outside the designated production region.

 The continuity of the cluster depends on attracting apprentices into a program that takes at least 8 years. More than 20% of the cheese is now exported, with recent domestic demand slack, in part because of the drop in pizza sales in Naples. The consortium is looking for ways to increase its exports, difficult for the many small producers. Last year the Italian government purchased 100,000 wheels of the cheese and donated them to charity.

 http://www.parmigiano-reggiano.it (Source: Appendix to Growing Jobs, Vermont-Style: Skills and Knowledge for Vermont’s “Sustainable Food System Cluster” and Natural Resources May 2010 – details next month)

Lifetime care for people with a disability (BEST PRACTICE)

July 14, 2010

Australian politician, Bill Shorten, is talking up the idea of national lifetime care and support system for those with disabilities, and he is awaiting the Productivity Commission enquiry.

Our reading of the terms of reference is that the PC will be take a clinical look at things, and ‘compassionate’ issues like lifetime care won’t get much of a run. This will be a shame because life is tough for those with disabilities, and their carers. The better prospect might be the National Disability Strategy being released shortly.

 In this context, local stakeholders have first-hand experience, and hence the opportunity to leverage initiatives if they see fit. To my mind, if Shorten is talking about lifetime care, then local groups might pursue what he actually means, and take things from there. It presumably means physical and mental health, education and training, work, leisure, aged care etc. From our recent research it seems that Sweden is implementing some smart agendas in the disability field.

 It was also interesting to note that in April in Madrid, EU tourism ministers agreed to facilitate ‘the access to holidays to groups with impaired mobility or those who are socially and/or economically disadvantaged.’ This could take many forms, and it will be interesting to track progress.

 

Angles for Cockatoo members

  • §          If you’ve an interest in this field, the EC work should be on your radar. Tourism and leisure surely fits within a lifetime support system of all developed nations.
  • §          The hot spots might be those towns already strong in aged care, with the infrastructure in place, and close to the major cities to avoid lengthy travel. The hosting of a disability conference might be the trigger? Contact us to chew the fat. 

 

Creative Arts update from the USA and Europe

July 14, 2010

 The Washington Economic Partnership has released the report on the city’s creative economy. Conducted by Mt. Auburn Associates with RTS, the Creative DC Action Agenda found that DC’s creative economy generated $5 billion annually in income and accounted for more than 75,000 direct jobs. The report can be downloaded at http://www.wdcep.com/newsletter96.php?aId=493&pageId=19.

 Charleston, South Carolinaa recent RTS study of Charlestone’s creative economy found that it represents much more than the world-famous Spoleto Festival. The creative economy cluster has 18,600 jobs, making it one top five largest clusters in the Charleston economy. The prominent sub-clusters include the culinary arts, with scores of innovative restaurants highlighting the cuisine of the Low Country, and architecture and urban design, which showcase Charleston’s extraordinary historic preservation efforts.

 The European Union has issued a Green PaperUnlocking the potential of cultural and creative industries”. It notes that “immaterial value increasingly determines material value, as consumers are looking for new and enriching ‘experiences’. The Green Paper explains how to foster art and design school/business partnerships to promote incubation and entrepreneurship; how to strengthen the integration of creative industries into strategic regional  development; how to promote cultural diversity; how to stimulate spillover effects. Go to http://ec.europa.eu/culture/our-policydevelopment/ doc2577_en.htm.

 Contributed by Stu Rosenfeld (CraftNet)

Rudd no conductor of the orchestra, says Silverhawk

July 14, 2010

 His demise came quickly, but it had been brewing for many months. Rudd’s workaholic ways and his staff’s dismissive approach to caucus members and ministers were the core problem.

It was at a Community Cabinet meeting in Adelaide when it struck me. Here was Rudd taking 40 minutes to answer four questions – he was drawing statistics from the recesses of his brain, like a latter-day Barry Jones. And 20 cabinet ministers were sitting back stifling yawns and looking at the ceiling. Senior hard-nut ministers like Carr, Crean, Ferguson and Smith weren’t asked a question the whole evening. They must have been seething inside. And then back in Canberra, Rudd continued to take the limelight.

 In the old vernacular, Rudd was a try-hard. Although his intentions were totally honourable, he was basically depriving his parliamentary colleagues of oxygen. And therein lies the lesson for all of us. Good managers manage. They conduct the orchestra and get the harmonies right. Bob Hawke understood this – he devolved responsibility and encouraged his ministers.

PM Gillard has similar instincts to Hawke. This opens up some real opportunities for local players, namely to identify where YOU can take over some of federal workload with offsetting funding deals. As I’ve been saying ad nauseum, don’t be timid folks.  

 Contributed by LG Focus (Good Oil column)

Bibbulmun Track – BEST PRACTICE

July 14, 2010

 There have been a spate of walking tracks developed in the last 5-10 years, and the federal infrastructure programs in Australia have helped. But the quality has been patchy because project proponents haven’t had a clear idea of what they should aspire to. Our research highlights the following deficiencies:

– gaps lie in poor signage.
– lack of decent maps for out-of-area tourists – unless you’re a local, walkers don’t have a clue where the tracks start or finish, or the worthy features along the track.
– lack of toilets and picnic areas.
– insufficient accommodation (both basic and upmarket).
– Poor marketing to national and international markets.

 The best way for local communities to understand how their walking trail measures up is to get a group together and walk other trails. A good example is the Bondi to Coogee Walking Trail in Sydney – takes your breath away.  The Yarra Trail is another good one.

 But the daddy of them all is the Bibbulmun Track in Western Australia – it runs for almost 1,000 km along the Darling Ranges and beyond. It is a marvellous model for other tracks, not because of its length, but because of the brains and persistence that have gone into it. The track dates back to 1972, but take-off occurred in the 1990s when a remarkable ‘rainbow coalition’ was formed. An American guy named Jesse was the project manager, and RDC folk like Bruce Manning (see below) was also very active.

The project grabbed Canberra’s attention because of the above coalition, the innovative leveraging of funding from the mining companies for toilets, signage, tables, bridges etc., and the involvement of prison labour in the upgrade. A federal Regional Development Program grant of $1.38 million ensued, which was matched by the then WA Department of Conservation and Land Management, WA Ministry of Justice, Regional Development Commissions and Employment Training programs.

Alison Dalziel of Morrison Low Consultants Pty Ltd recently chased down the latest details. The Department of Environment and Conservation (DEC) is now the manager of the Track, assisted by a not-for-profit Foundation. The really interesting thing is the high level and varied membership of the Board. Take note!

Chair: Mike Wood: MD of Mountain Designs, WA
Deputy Chair: Simon Holthouse: former Chair of State Planning Commission
Ron Alexander: DG, WA Department of Sport & Recreation
Steve Crawford: Director Policy and Planning, Tourism WA
Megan Graham: Recreation and Trails Unit, Dept. of Environment & Conservation
Leonie Kirke: Former Assistant Principal, All Saints College
Bruce Manning: CEO, Great Southern Development Commission
Jim Sharp: Director of Parks, DEC
Patrick Tremlett: Assistant Parliamentary Counsel
Linda Daniels: Executive Director.
 

Go to http://www.bibbulmubtrack.org.au

Rudd wasn’t a conductor of the orchestra

July 4, 2010

 His demise came quickly, but it had been brewing for many months. Former Australian PM, Kevin Rudd, was a workaholic and his staff’s dismissive approach to caucus members and his ministers were the core problem.

 It was at a Community Cabinet meeting in Adelaide when it struck me. Here was Rudd taking 40 minutes to answer four questions – he was drawing statistics from the recesses of his brain, like a latter-day Barry Jones. And 20 cabinet ministers were sitting back stifling yawns and looking at the ceiling. Senior hard-nut ministers like Carr, Crean, Ferguson and Smith weren’t asked a question the whole evening. They must have been seething inside. And then back in Canberra, Rudd continued to take the limelight.

 In the old vernacular, Rudd was a try-hard. Although his intentions were totally honourable, he was basically depriving his parliamentary colleagues of oxygen. And therein lies the lesson for all of us. Good managers manage. They conduct the orchestra and get the harmonies right. Bob Hawke understood this – he devolved responsibility and encouraged his ministers.

 PM Gillard has similar instincts to Hawke. This opens up some real opportunities for local government in its dealings with the federal government, namely to identify where YOU can take over some of federal workload, and naturally with funding adjustments. As I’ve been saying ad nauseum, don’t be timid folks.

US food hubs

July 4, 2010

THE Obama Administration is reportedly looking to rebuild the country’s rural economy by creating a parallel universe of local and regional markets and “food hub” distribution centers to help farmers market their production closer to home.

The US Department of Agriculture has released a “gap analysis” that maps the locations of small livestock producers by county, and compares production to the availability of small slaughter processing facilities and rendering plants. The study is part of USDA’s ‘Know Your Farmer, Know Your Food’ initiative.

Food hubs are aggregation points – similar, in some ways, to co-operatives – where farmers can bring goods that are inspected and graded for resale to wholesalers. The food hubs provide storage and logistics services for buyers and sellers and have been “hugely successful” in some areas of the country. The food hubs often are “hybrids” that combine a traditional wholesale market with a retail farmers market.

Angles for Cockatoo members

  • Our US members are tracking developments to see if there is real policy grunt behind this initiative.
  • The real value is arguably to coordinate public and private infrastructure (e.g. water treatment, roads, refrigeration, auctioneering software systems) and related spending (e.g. training, marketing) around such food hubs, and therefore create best practice investor beacons. The Dutch (Food Valley) are the best at this?

Copenhagen’s Cleantech Cluster – a good model

July 4, 2010

Copenhagen is a European hub for cutting-edge cleantech companies, R&D and test facilities. It obviously has global prominence too in things environmental. There are numerous reasons for this, including:

  • A pervading philosophy of being an ‘early adopter’.
  • The national goal of being 100% free of fossil fuels.
  • The Copenhagen Cleantech Cluster – basically there to coordinate resources.

This cluster is “one stop cleantech shop” offers access to cleantech sector networks, cooperation between members, workshops, seminars, research projects, and insights to the political environment. It also wants to join up with other leading clusters worldwide. www.copenhagencleantechcluster.com

Another player is ‘Copenhagen Capacity’ (part of inward investment agency) – provides information, access to companies, associations, research institutions and assists with investment and business opportunities.

Angles for Cockatoo members

  • This is one of the agencies we want to collaborate with via the Sunrise Program.