Archive for February, 2013

Industry Statement – opportunity beckons

February 27, 2013

Australia’s long-awaited Industry & Innovation Statement, released in February, provides an intriguing opportunity for local councils.

It stems from the announcement of ten Innovation Precincts, with $500 million funding. As I’ve foreshadowed in recent months, these will be established in areas of current Australian competitive advantage like manufacturing, food, finance and resources and up to five Precincts will support emerging opportunities – their focus will be on industries with strong export potential.

Melbourne is to be a food precinct under the new arrangements, which is very interesting given that most manufacturers have moved out to Cranbourne, Shepparton, Ballarat, Bairnsdale etc. Perhaps the CSIRO and the Australian Research Council, whose influence and/or facilities lie in Melbourne, had a big say in the decision?

The reality is that for certain industries, urban agglomerations of research infrastructure, plant, equipment and workers are important e.g. finance, IT, biotech and pharmaceuticals. However this isn’t the case for the food, timber, metals and engineering industries.

The configuration and location of most of the precincts have yet to be decided.

The opportunity is thus for regional cities and towns to negotiate and lobby their way into these precincts, including the afore-mentioned food precinct, especially since the government would be open to sensible propositions at a time of a hung Parliament. We’re now scheduling meetings with the industry and regional development departments to discuss how regional hubs can be positioned in the new arrangements. If your Council has an interest in this dialogue, please contact us ASAP.

Clusters and supply chains

The Industry Statement actually uses the terms precinct and cluster interchangeably, which is nice after our decade of effort in opening federal policymakers’ eyes to the potential of clusters. We must thank my colleague Professor Roy Green (UTS) for his leadership on this.

To explain, a few years back our Cockatoo members identified some 100 industry clusters around Australia. We have been dropping hints about they could form the basis of a new industry policy, especially given that localised processes are increasingly important.

For example, in South Australia we identified clusters of differing sizes in horticulture (Virginia, Riverland, Hahndorf), seafood (Port Lincoln), automotive and engineering (northern Adelaide), wine (Barossa and Clare Valleys), food (northern Adelaide), minerals and metals Upper Spencer Gulf) The defining features of each of these clusters are the specialisation and critical mass that helps them build supply chains into global markets. I will identify more of these clusters next month.

The Industry Statement touches on the importance of supply chains. We believe there is real scope for companies to now engage with the federal government to think about how high-value global supply chains can be nurtured in association with these clusters and precincts. Once again, please forward your ideas!

Defensive measures

As mentioned above, the Statement had a defensive component, presumably crafted by the manufacturing unions. It involves increased vigilance on cheap imports via anti-dumping action. The reality is that many foreign companies are selling their goods into our market at cost just to keep their operations going. But an anti-dumping program will not prevent these practices, and anti-dumping cases are excruciating slow.

A beefed-up Australian Participation Program, to seek higher levels of Australian content in major resource and engineering projects, will also be sought. However our signing of Free Trade Agreements means that we can no longer mandate particular levels of local content for these projects.

Innovation grants

The third leg of the Statement involves $350 million in a new round of the Innovation Investment Fund program to stimulate private investment in Australian start-ups. There is also a new competitive Industry Collaboration Fund (up to $50 million a year). This is all a little murky because the offset savings are linked to reducing the eligibility of the resource companies to R&D grants.

In any event, Shadow Minister Sophie Mirabella is the one to watch. She has not yet ruled anything in or out.