Archive for August, 2011

South Australia’s water and spatial information clusters

August 10, 2011

 SA once ran Australia’s best cluster program. The main architects were Mick O’Neill (until recently Deputy CEO, SA Dept. of Trade & Economic Development) and ex-Irishman Hugh Forde. In this exclusive series, Mick provides Cockatoo readers with the lowdown on the origins and performance of two more clusters.

 Water

 This is similar success story to that of defence, where state government funding and alignment with policy were also critical. The sector/cluster was chosen in conjunction with a state government project to outsource management of the water assets in Adelaide(state capital) with commitments/obligations for industry development. Cluster development had been proposed by the successful bidder (United Water) during the bid process (based on advice from consultants from Stanford Research Institute). Hence United Water readily embraced the MFP/Business Vision 2010 process.  A new entity was established (Water Industry Alliance), state government provided substantial funding, United Water provided significant leadership, in-kind resources and international linkages and the entity is still operating successfully. Exports from the industry have grown from A$40m to A$400m over the past 10 years and the industry has grown accordingly. (http://www.waterindustry.com.au)

 Devils advocates will say that the industry growth would have happened anyway. But United Water, theAllianceand many of its participants will say that, notwithstanding contractual obligations, the cluster model provided an effective process, a focus, an industry identity which did not previously exist, an ongoing mechanism for engaging with the existing and emerging local industry, and ongoing facilitation to make it all happen. TheAlliancestill actively uses the word “cluster” in referring to its operations and its stakeholders.

 The industry now has momentum and critical mass, despite the outsourcing contract has finished. TheAllianceis currently facing significant funding issues with a substantial reduction in government funding. Once again the ongoing sustainability of the entity is not synonymous with the health of the cluster, although many of us would argue that it will continue to add value to the growth of the sector as long as it exists.

 Spatial Information

 A similar initiative to water – off the back of a government outsourcing initiative, with industry development objectives. There was significant industry engagement and activity addressing strategic issues. An entity was formed and continued for some years, supported by Fujitsu as the lead outsourcing contractor. The anticipated level of government business was not forthcoming and Fujitsu eventually withdrew its support.

 Today there is little evidence of a spatial information sector/cluster, although there is much spatial information activity undertaken by ICT companies, engineering services companions and government departments. Effectively Spatial Information (like multimedia and desk-top publishing before it) has proven to be a technology and a process as opposed to an industry. Here we can thus talk about a failed cluster. Arguably it was selected for the wrong reasons and technology and the market evolved to overtake it.  

 Regards, Mick O’Neill 0416 079 089

Pitching to federal ministers

August 4, 2011

 I’m often asked whether councils should write to federal ministers to push a particular project or issue. The answer obviously differs according to the circumstances. But there are common lessons and I’m happy to pass them on.

 The starting point is to recognise that whichever part of the world you’re in, there are a myriad of ways of trying to engage with federal ministers.  In the Australian context, the main options are:

  • Community Cabinet meetings – a great mechanism if you can swing such an event.
  • A random meeting to coincide with other business while you’re in Canberra- not recommended unless there’s some substance to the meeting.
  • A submission to a federal enquiry – yes, provided it’s followed up with a meeting.
  • A grumpy email letting off steam – not recommended.
  • A quick chat to a Minister after he/she has spoken at a gathering – OK for starters.

 However most attempts to engage with federal ministers fall short because councils are not clear about their desired outcomes, don’t have a strategy, and therefore don’t have a strong pitch.

 And if you haven’t a strong pitch, then your request gets swept aside in the maelstrom of paper and emails flying around the national capital. Reflect for a moment – the Australian Prime Minister receives 148,000 items of correspondence annually, and every approach gets a response (except for the loonies). Given the huge workload involved, the pedestrian letters and submissions receive a reply from an SES officer within PM&C or the line department to which the correspondence was referred.

 The Department of Innovation is a bit different. It advised me that while its Minister receives a more modest 3,500 letters per year, around 65% (2,275) require a considered reply. Of this, Minister Carr replies to approximately 45% (1,000).

 All up, I’d say the 45 ministers and parliamentary secretaries pump out close to 300,000 repiles annually. What is not generally understood is that each of these replies undergoes three or so drafts in the Department, with senior officers often ruminating over the best form of wording to ensure no blow-back from the Opposition. To my mind, this is a huge waste of resources – officials would be better employed developing solutions to problems, rather than mindless wordsmithing.

 Anyway, getting back to the point, to get traction with a Minister it’s best to pitch your letter or submission around solving a problem in the context of federal policies or programs. This provides a context for departmental officials and ministerial minders (who perform quite different roles) to sit up and take notice. Outlined below are some problem areas, and some examples of how councils could make a pitch for some mutually beneficial solutions.

 Export ban on live cattle

 The immediate problem is that Agriculture Minister Ludwig overreacted with his ban on live cattle exports toIndonesia– simply put, he misjudged the economic and social dislocation to northern Australian communities.

 However the long-term problem is that the shipment of live animals is inherently cruel and uneconomic when compared with the best practice solution, the shipment of chilled beef.

 You are probably thinking about the standard line thatIndonesia doesn’t have sufficient refrigerated capacity to go this route. This is undoubtedly true at present, but what if an alliance of councils in affected regions proposed to PM Gillard and Minister Ludwig the offer of land and locational incentives for a chain of export abattoirs? This could be the game breaker, with the other elements being:

  • financing of refrigerated capacity in Indonesian centres, utilising World Bank finance, multilateral aid or our own aid program.
  • Australian and Indonesian Government subsidies for the respective nodes (the feds’ $30 million hardship package might have been saved)
  • Mandatory joint ventures between Australian and Indonesian companies along the whole supply chain to provide the glue.
  • Long-term contracts and export insurance (via EFIC) to reduce the risks.

 Forestry restructuring

 The problem here is the need to create jobs inTasmaniain the face of the feds’ forestry restructuring program. Another $120 million is to be rolled out, following the hundreds of millions of federal assistance poured intoTasmaniaover the last four decades.

 What if a council, or alliance of councils, suggested to PM Gillard and Regional Development Minister Crean that the three levels of government form an alliance with industry associations to chase new industries and new international players? Sounds revolutionary, but it hasn’t stoppedNew Zealand(Tassie’s mirror economy) doing exactly this!

 Food labeling

 The problem here is that our food manufacturers are being swamped with cheap foreign product, and the current labelling arrangements provide NO IDEA to concerned consumers of the true local suppliers. Former Health Minister Blewett’s recent review gets nowhere near a solution. And I’m willing to bet that a food poisoning scare involving foreign product will blow the issue sky high.

 Given that food value-adding is critically important to many regions, I believe it most appropriate for councils in theGoulburnValley,LockyerValley, Adelaide Hills, Riverina, Sunraysia.Swan Valley,Tasmania, central and northernQueenslandto be pitching to PM Gillard, Health Minister Roxon and Industry Minister Carr for decent food labelling combined with real anti-dumping action.

 I could provide a dozen further examples. My point is that councils should be bold and persistent by pitching sensible solutions to national problems. This can start a productive relationship with federal officials and their political masters. As local government moves to constitutional recognition, you owe it to your constituents to step up to the plate. Ring us on 0412 922559 or email us on apdcockatoo@iprimus.com.au.