Linking clusters with Greece

Greece is at a critical point in its long and proud history. Its ability to overcome its economic difficulties will arguably depend on forging new global partnerships with external players.

To this end, the Cockatoo Network is interested in identifying how and where joint ventures might be developed between Greek and Australian businesses as part of Greece’s recovery program – the rationale is that Australia has weathered the GFC relatively well, it has companies hungry to expand into new global markets, and our nations have a strong cultural and social affinity that can underpin the commercial relationship.

The problem however is that new trade and investment joint ventures do not come easily. In our experience, the biggest problem is information failure – the likely partners are not aware of each other and the support agencies are not sufficiently connected. The process of engagement is therefore slow and often a matter of luck. We want to speed this process and bring a new dynamic into the relationship via the linking of companies with collaborative mindsets. The key roles of the Cockatoo Network will be to:

1. Identify the mutual business opportunities for Australian and Greek companies.
2. Present these opportunities to the relevant companies.
3. Engage other relevant stakeholders, including support agencies.

We are currently in discussions with the Australian Government, industry chambers and industry associations. If you have a likely interest in this subject – wherever you are – please contact us ASAP.

The world’s future – a must read

Russ Fletcher (Montana Roundtable, USA) has forwarded the link to a very, very good analysis by the US National Intelligence Council – provides a framework for thinking about the future. You will note some bias, but that is understandable. Below is a sample – the identification of four megatrends:

1. Individual empowerment will accelerate owing to poverty reduction, growth of the global middle class, educational attainments, ICT and manufacturing technologies, and health-care advances.

2. Diffusion of Power – there will not be any hegemonic power. Power will shift to networks and coalitions in a multipolar world.

3. The demographic arc of instability will narrow. Economic growth might decline in “aging” countries – 60% of world’s population will live in urban areas and migration will increase.

4. Food, Water, Energy nexus – demand for these will grow substantially due to population growth. Tackling one problem will be linked to supply and demand for the others.

The report covers population, health, technology, global threats, sectoral performance etc. An interesting example is the analysis of hot spots, as follows.

“Democratic deficits are said to exist when a country’s developmental level is more advanced than its level of governance. Democratic deficits are tinder that might be ignited by various sparks. Our modeling – based on the International Futures model – highlights many of the Gulf, Middle East and Central Asia countries – Qatar, the UAE, Bahrain, Saudi Arabia, Oman, Kuwait, Iran, Kazakhstan, Azerbaijan – and Asian countries such as China and Vietnam. This set of countries is very different from the “usual suspects” lists provided by indices of state fragility or failure.”

Go to Global Trends 2030: Alternative Worlds

Off-shoring has peaked?

Professor Brian Roberts (Cockatoo member) recently forwarded a timely article ‘The Third Industrial Revolution’ (The Economist, 21 April 2012)

The gist of the article is that off-shoring has peaked i.e. the shift of manufacturing to low-wage countries has slowed because labour costs are becoming less important. For example, a $499 first-generation iPad has only $33 of manufacturing labour, of which final assembly in China accounts for just $8.

The article makes the claim, echoed elsewhere in international circles, that companies want to be closer to their customers so that they can respond more quickly to changes in demand. A related factor is that with sophisticated products, it helps to have the people who design them and the people who make them in the same place. The Boston Consulting Group estimates that in areas such as transport, computers, fabricated metals and machinery, 10-30% of the goods that America now imports from China could be made back home by 2020.

Well this makes intuitive sense. Let’s certainly hope so. The importance of proximity to customers, designers, suppliers etc. bodes well for the precinct agendas described above.

Smart Specialisation and Precincts – ways of advancing your community

The European Commission is much involved in urban and regional development thinking, and it has been promoting the Smart Specialisation concept. It basically involves EC regions specialising in activities that align with their competitive advantages. And the Commission offers financial inducements to this end.

Now the churlish might argue that this policy shift has come a bit late to help Greece, Spain and Portugal. But the truth is that ‘regions’ hold a lot of sway in Europe – they are a fundamental part of its social and industrial fabric.

Alfred Marshall (Principles of Economics, 1890) was espousing this stuff more than a century ago. He talked about particular locations having types of specialization. Indeed he anticipated later discussion of the role of place as a point of information exchanges, and of innovation developing through that “something in the air” that arises when people mingle and exchange ideas. He identified four particular features of precincts – knowledge spillovers as a result of informal networking; access to a common pool of factors of production such as labour or R&D facilities; specialisation of production within supply chains; and the facilitation of ‘comparison shopping’ for buyers.

Precincts are, by the way, akin in some ways to clusters, and the Cockatoo Network is quick to highlight this to government officials who still think clusters are about picking winners. Rubbish of course.

Five tips for facilitating specialisations and precincts

It makes good sense for councils and regional stakeholders to use local specialisation and precinct concepts in their lobbying efforts to government agencies. Below are some suggested initiatives that could complement your lobbying effort. Contact us for support (naturally!).

1. Map your specialised assets and their linkages – a natural start point, and great marketing tool.

2. Get international agencies to study or talk about your area of specialisation – Cockatoo members regularly work with the OECD or UN agencies to raise awareness of their regions.

3. Commission university studies on national issues at your local level – these can be good copy for national newspapers, which then educate external audiences about your local specialisation.
4. Leverage your champions – they are in your midst.
5. Do something bold and innovative – all towns, cities and suburbs have specialisations, but they’re hidden to the outside world. A bold project can lift the specialisation profile.

There’s something about San Sebastian!

Report from TCI’s annual global conference

The 15th TCI annual global conference was held in the Basque Country from 16-19 October 2012. A highly successful event with 450 delegates representing 67 countries. (Unfortunately I was the only Australian this year). The conference theme was “Place based competitiveness in times of global change”, underlining the need to be focused and strategic in promoting the competitive advantages of regions and localities.

There IS something about Sas Sebastian! One of the many workshops was dedicated to understanding the bleak situation with the Spanish economy – however one would have thought Spain a much rosier place walking the streets of San Sebastian. The pounding of the Atlantic around the headland of the old town, the surf beaches and pintxos (Basque form of tapas) bars on every corner make for a wonderful setting. In fact San Sebastian was voted one of Europe’s top food and wine cities by Trip Advisor in 2012, boasting more Michelin star restaurants than any other European city.

The success of the Basque country in weathering the economic storms over Europe is palpable. Tours to various Basque clusters further highlighted this. Basque was one of the early adapters of a competitive cluster policy and their clusters are performing and centrepiece to the Basque economy.

Cluster policy pioneers such as Antonio Subira, Catalonia; Jon Azua, Basque Country; Ifor Ffowcs-Williams, NZ; Gerd Meier zu Kocke, Germany; Alonso Ramos Vaca, Mexico, discussed the past 15 years of TCI and cluster policy. The session facilitated by Christian Ketels, current TCI President, celebrated the vision and commitment of the Basque people to their policy of ‘clusterisation and strategic thinking’.

Michael Porter summed things up by saying we no longer need to understand the ‘why and what of cluster policy’, we just need to get better at doing the ‘how’. Michael Porter has recently developed a Microeconomics of Competitiveness (MOC) program as a platform that can be taught at universities around the world to improve understanding of competitiveness and clusters.

I presented the views of Australian women cluster managers in the “Gender and Diversity in Clusters” workshop with three other brave women from Denmark, Germany and Austria. The audience grew as we went along and by the end we felt we had hit on a topic that resonates. There seems to be a quiet swell of renewed interest in gender and diversity issues.

The issue, in Europe and elsewhere, is that plenty of women are in the top jobs, including managing clusters, but few are on Boards. Norway has just implemented a 40% compulsory inclusion of women on Boards policy apparently. Also an issue of representation of women in engineering and design sectors. They are at universities, but this is not translating to the industries. Great case study presented by Kersten Hindrum, an engineer from the Danish maritime sector, about a ‘women only’ designed pleasure craft which received rave reviews and media at this year’s Danish boat show. The point was that women use the indoors of the craft and therefore should design them!

Expect to see more on this subject at the TCI annual conference in Kolding, Denmark in September 2013.

Contributed by Tracy Scott-Rimington (Brisbane) tracysr@bigpond.com. Go to http://www.tcinetwork.org

In support of Air Cranes

The Erickson S-64 air-cranes continually prove their worth – 9,600 litres in one load certainly has an effect. We recently spoke with the local representative of the US parent. He says there are six leased to Australia for around three months each year – two are based in both Melbourne and Sydney, and one in Adelaide and Perth. The cost per air-crane is less than $2 million all-up (i.e. including pilots), which is very reasonable when the annual costs of fire damage is taken into account.

Could we do with more than six? A dozen wouldn’t be out of the question if you take into account that the annual losses are huge. A few Cockatoo members had first-hand experience of the Canberra bushfire 10 years ago (4 deaths and 500 homes destroyed). And the enquiry into the disaster concluded that it might have been avoided if action was taken in the 24 hours after the lightning strikes i.e. the fires sat out in the Brindabella ranges virtually untouched.

We’re not here to apportion blame, but the Bushfire Cooperative Research Centre further concluded that ‘the critical condition is the ability of aircraft to knock down a fire before ground crews arrive – buys time. This advantage is much greater in inaccessible terrain.’

In addition, The Fire Management area of the Department of Sustainability and Environment (Victoria) also released a supportive analysis in the late 1990s, as follows:

“The helitanker was effective in directly attacking the edges of going fires, hot spots and spot fires, in providing valuable support to the ground firefighting resources and in working with both the fixed-wing and other rotary-wing firebombers…Its ability to quickly deliver large volumes of fire retardant in potentially threatening situations under extreme fire danger conditions was well demonstrated. The large volume carried and the ability to split the load also allow it to deliver separate drops to several locations…by directly attacking high-intensity fires the Aircrane Helitanker was credited with several significant saves where high-value assets were under threat. “

The overall fire management task is funded by the feds and states, together with levies collected by the insurance companies in some states. This system is now apparently moving to a council rates arrangement (which is fairer since insured properties have been subsidising the uninsured).

The bottom line is that if the feds, states and territories own say $20 billion worth of land and buildings in fire-prone areas, spending a further $8 million a year on 4 Erickson’s would have to be good insurance.

If your region or council has an interest in this subject, please contact us.

Precincts now in vogue for National Broadband Network roll-out

A number of members have not done well out of the NBN roll-out. The problem stems from the roll-out plan being based primarily on engineering efficiency considerations (the lowest cost and quickest rollout schedule). There has not been any conscious consideration of commercial benefits e.g. where high speed broadband would be most effective in addressing poorly served areas (rural areas and urban black spots) or targeting areas where the return on network installation would be greatest (business parks and high income/high density suburbs).

Having gone public on the NBN roll-out schedule with Government support, and defended its decision to be politically and commercially agnostic, there is little or no chance of the Government being diverted from this path. We have therefore held talks with the Department of Broadband, Communications & Digital Economy (DBCDE) and NBN Co. in recent weeks about the scope for regions to now take advantage of NBN roll-out by developing clusters and precincts. The annual update of the NBN roll-out is due in March.

Members please note – we are delighted to announce that we have specialist support via Dr. Paul Paterson (ex-Telstra and ex-NSW Dept. of State & Regional Development). He can be contacted on paul.paterson@ppconsulting.net.au

Five winners of inaugural ‘Fairest & Best’ Award – Australian politicians

We are now in an election year. Who can we believe and trust? As Henry Kissinger once said ‘Too bad ninety percent of the politicians give the other ten percent a bad reputation!’

So a group of Canberra-based Cockatoo members recently mused about the degree to which political mudslinging is damaging the voter attractiveness of federal politicians. We then decided to run a simple question past a sample of our members – ‘please nominate three exemplary, or at least straight and good politicians, from both the Labor and conservative side, and throw in a Green or Independent if you like?’

Well a grizzled bunch of former federal officials and ministerial advisers fell over themselves – some even offered views on state politicians or went back 50 years. A small sample, but the results are in line with what people here in Canberra think i.e. the Independents are important in the current Parliament, and politicians need to let their personal values shine through. Rudd and Hockey on the list is surprising.

Current

Labor – Tony Burke and Greg Combet as the standouts – then (in no order) Kim Carr, Simon Crean, Peter Garrett, Jenny Macklin, Andrew Leigh, Tanya Plibersek, Penny Wong, Kevin Rudd.
Conservatives – Malcolm Turnbull is the standout – then (in no order) Ian Macfarlane, Russell Broadbent, Kevin Andrews, Judy Moylan, Greg Hunt, John Cobb, Nigel Scullion, Michael Ronaldson, Arthur Sinodinos, Joe Hockey.
Green/Independents – Tony Windsor and Rob Oakeshott as the standouts – then Natasha Stott Despoja.
State government – Gladys Berejiklian (Liberal – NSW), Peter Hall (Nationals – Vic).

Recent Past

Conservatives – Judith Troeth, Nick Minchin, John Anderson, Tim Fisher, Fred Chaney, Robert Hill.
Labor – John Faulkner, John Button, Barry Jones, Bob Hawke, Kim Beazley, Peter Walsh, Barry Cohen, Lionel Bowen.
Greens/Independents – Bob Brown, Janine Haines, Don Chipp.
State government – Steve Bracks (Labor – Vic), Phillip Costa (Labor – NSW)

The winners of the inaugural Cockatoo ‘Fairest & Best’ Award are Messrs Turnbull, Windsor, Oakeshott, Burke and Combet. Next year there will be more science in the exercise – members are invited to nominate an appropriate name for our new award.