Archive for the ‘Export development’ Category

USA gets Small Business STR (BEST PRACTICE)

November 22, 2009

David (Preacher) Dodd reports that Senator Mary Landrieu has introduced legislation to increase small business exports. The US administration is appointing a special trade assistant for small business to

  • promote the trade interests of small business concerns.
  • identify areas of demand in overseas markets.
  • identify and address foreign trade barriers that impede exports by small business concerns.

 Small business represents 97% of all exporters in the United States and account for 29 percent of the volume.  The constraints identified by the US Administration are:

  • lack of sales volume or resources to overcome the costs of trade barriers and overhead expenses in international transactions.
  • Small business advocacy groups often lack political influence in foreign countries, which hinders efforts to solve problems outside the legal process.
  • Small business advocates are not as visible or vocal on issues relating to international trade.

 David suggests that the proposed Cockatoo “Sunrise” project (aimed at bringing US and other nations into aid-investment-trade consortia) fits exactly with Obama’s mantra of “community” and “being a better partner in the global community.”

W2W channels Kiwi tech innovation (BEST PRACTICE)

February 10, 2009

Paul Spence (Cockatoo member) is a Wellington based technology blogger (http://www.genius.net.nz), management consultant and CEO of ideegeo Group Limited a web software developer.

 

Unlimited Potential is a Wellington-based volunteer managed networking community for ICT professionals and entrepreneurs.

 

UP puts on monthly events supported by local sponsors and invites anyone interested in IT to turn up for after work beer and pizza plus a themed presentation. The group is co-sponsored by Grow Wellington, the regional economic development agency.

 

In November 2008 I managed an event called “Wellington to the World” (W2W) – a half day program of talks on emerging technology plus presentations from technology entrepreneurs with recently launched ventures.

 

In the evening we hosted a networking session for all attendees. Members of a local angel investors group participated and mingled with guests and presenters. The idea for the event sprung from a realisation that, despite a wealth of ideas and talent, New Zealand’s isolation from the major consumer and financial markets makes it difficult for small or start-up tech businesses to compete offshore. 

Smart companies from NZ (and Australia) need to find networks and bridge-builders to help pave the way for access overseas. Consequently W2W partnered with the KEA Global Mentors program to match the young tech firms with people offshore who could help. KEA is a global network of over 25,000 New Zealanders living abroad.

 

Presenters at W2W were selected through an intense interview process to ensure quality pitches and a variety of products. After the live event we deployed the entrepreneur presentations on Youtube.

 

NZ Trade and Enterprise then shared the video content around its global trade missions. It was a natural progression to use a video site given that many businesses are enthusiastically adopting social media to share their sales message. Because of time zone differences and local bandwidth constraints we decided on an asynchronous rebroadcast and avoided the cost of live video content streaming.

 

Around 80 guests attended the event and hundreds visited the video channel and viewed content.

 

We later heard that one tech entrepreneur received an approach from a U.S. venture capital firm within 24 hours of posting the video content online. Angel investors were excited by the emerging technologies and approached the local university for further talks.  Subject to securing sponsorship, the event will be repeated in 2009. We hope to extend the scope by inviting participation from across NZ.

 

Weblinks: http://up.org.nzhttp://www.youtube.com/UPW2Whttp://www.keanewzealand.com/

 

Cost benefit analysis for US alliance…

April 13, 2008

 

 

 

by Bogong (our resident political analyst*)

 

It is a well known fact in the new Canberra bureaucracy that Treasury Secretary Ken Henry and his colleagues are entitled to a cost benefit analysis on every part of government policy and expenditure. Well here’s Bogong’s suggestion – ask for an evaluation of the US alliance.

 

Australia’s foreign policy has been built in the shadow of US expectations, and it’s not clear that we have come out ahead. In Bogong’s experience the main advantages fall into that category which the Defence and Intelligence set define as “trust us – it’s there – but it is so secret that we just can’t tell you”.

 

So what about having Treasury do an ex post facto analysis of these advantages including the intelligence sharing arrangements, to see if those claims can be backed up? To many in the Industry Department, the capacity to use Government procurement preferences to help Australian companies get established has now been lost under the Australia US Free Trade Agreement.

 

The facts are that former PM Howard made a commitment to have it signed before the 2004 election, and with that ‘helpful’ handicap our team went to Washington to show they weren’t going to be pushed around, because as one DFAT official told Bogong at the time, we had “depth and sophistication on our side”. 

 

The outcome is best summed up by Deputy PM Mark Vaile telling media on his departure for Washington that there was no way he would agree to the so called Mickey Mouse amendment – in plain English, agree to change Australian law to extend the life of copyright from 50 to 70 years after the death of the creator. In the discussions on the relevant Chapter in the Agreement dealing with Intellectual Property, our team was led by a competent middle level official from DFAT. But the US side was led by the US Trade Representative himself, a man whose political career had been built in California with decades of support from Hollywood and the music industry. End of story.

 

The ANZUS Treaty may have served a purpose in years gone by, but not now.  If we could truly rely on US protection we would not be spending billions on new weaponry – the bulk of it from the US. And hasn’t the threat assessment changed? Who are our enemies? What has been the cost to NZ of taking a more independent path in foreign policy? Missing out on a presence in Iraq doesn’t seem like such a big loss.

 

And if we took a step back what would the US do? It would not harm the US multinationals that do business here, nor US buyers of Australian resources. The world has move on and it is time for us to move on too.

 

So when Rudd was in Washington to catch up with George W. let’s hope he asked a few hard questions and not, as the accompanying media have suggested, begin with a defensive explanation of why we are pulling out of Iraq and whether or not China is our new best friend. (*Bogong has no financial or legal relationship to the Editor.)

Collaborator profile – Jim Fountain

February 10, 2008

Who and where are you? Jim Fountain, Gold Coast City Council, Australia  

 What’s your job? To promote the region as a business location by establishing and maintaining contacts in the business community and assisting industry to establish and/or expand their operations in the region. Major focus on the marine industry and export development. Grew up in Melbourne and an early starter in snow skiing. Competed in still water and surf swimming events, winning a number of Victorian championships and an Australian interstate championship. Represented Victoria six times before winning a sports scholarship to an American university. Spent over four years in various parts of the USA. Worked with the AFL Bears, Griffith University. 

What’s exciting you at present? Market research and planning, overseas trade, industry clustering, industry strategy formulation, Yatala Enterprise Area and Gold Coast Marine Precinct. Enjoy teaching others – providing the experience from my years of varied work. I have enjoyed successful collaboration – organising trade missions to Middle Eastern countries and China; Marine Industry Skills Audit; Marine Supply Chain survey; implementing the technology incubator at Griffith University; boat show displays at  Dubai, Fort Lauderdale, Phuket, IBEX , Miami, Shanghai.

What collaborative projects do you have to interest Cockatoo readers – Ausindustry has been a close collaborator, as have Gold Coast universities. Industry clustering is a focus – we are thus interested in sharing ideas with other cluster groups, and to facilitate international JVs in education, marine, health/medical, creative industries, food manufacturing, environmental industries, tourism, sport and ICT. Open to any suggestions. Cockatoo’s Thinker-in-Residence proposal could be VERY relevant to you! A working holiday in Australia’s top leisure region!

Web www.businessgc.com.au Email:  jfountain@goldcoast.qld.gov.au Phone:  +61 7 5581 7547

Legoland…exemplar for Denmark…and the world

February 6, 2008

Danish toymaker Lego now outsources most of its manufacturing to Eastern Europe and Mexico – only 300 blue-collar jobs remain at Lego’s HQ in the town of Billund.

Union leaders say “It was the best way to keep as many workers’ places as possible…to make sure that they make money and we make money.”  In Denmark, 76% of respondents recently said globalization was a good thing.

Why? Living standards in Denmark are high – per capita income trails that of the U.S. but is distributed far more equally. Unemployment is just 3.1%. The country exports more than it imports. Although only two Danish corporations (shipper A.P. Moller-Maersk and the Danske Bank) are on the FORTUNE Global 500 list, Denmark has many smallish, nimble, outward-looking firms in growth areas – alternative energy, health care, high-end furniture etc.

 The World Economic Forum says Denmark is the world’s 3rd most competitive economy – the 2nd highest tax burden, generous welfare state, heavily unionized workforce…but it’s all part of a trade-off, the Danes say. Corporate and capital gains taxes are low. There are few restrictions on trade.  

Employment Minister Claus Hjort Fredriksen says “the model we have found here – free education, free health care, a good financial situation if you lose your job, together with a flexible labor market and the size of Danish companies – somehow has struck something that is the answer to the challenges of globalization.” 

Denmark is now a darling of European social democrats, but it’s been overrun lately with visiting journalists, academics and politicians looking for insights. Another thing is its size and homogeneity – 5.4 million people, most of whom are of Danish ancestry. It is basically a clan – and informality, disputation and disrespect for authority are core Danish traits. A few clear goals and lots of leeway to achieve them.     

Source: IEDC 

Lego – exemplar for Denmark

December 16, 2007

Last year Danish toymaker Lego announced plans to outsource most of its manufacturing to Eastern Europe and Mexico – only 300 blue-collar jobs remain at Lego’s HQ in the town of Billund. 

Union leaders at Lego said “It was the best way to keep as many workers’ places in Denmark as possible…we want to make sure that they make money and we make money.”  

In Denmark, 76% of respondents in a recent poll said globalization was a good thing. And why shouldn’t they? Living standards in Denmark are among the highest in the world. Per capita income trails that of the U.S. but is distributed far more equally. Unemployment is just 3.1%. The country exports more goods and services than it imports.

And while only two Danish corporations (shipper A.P. Moller-Maersk and the Danske Bank) are big enough to make the FORTUNE Global 500 list, Denmark has more than its share of smallish, nimble, outward-looking firms well positioned in growth areas ranging from alternative energy to health care to high-end furniture. 

According to the latest rankings from the World Economic Forum (WEF), Denmark is the world’s third most competitive economy. It also has the second highest tax burden in the capitalist world, a generous welfare state, a heavily unionized workforce and at least five paid weeks off every year. It’s all part of a trade-off, the Danes say. Corporate taxes are low, and capital gains are taxed at a much lower rate than ordinary income. There are few restrictions on trade.  

Employment Minister Claus Hjort Fredriksen says ‘the model we have found here – free education, free health care, a good financial situation if you lose your job, together with a flexible labor market and the size of Danish companies – somehow has struck something that is the answer to the challenges of globalization.” 

Denmark is now a darling of European social democrats and the country has been overrun lately with visiting journalists, academics and politicians looking for insights. Another thing is its size and homogeneity – 5.4 million people, of whom all but 478,000 are of Danish ancestry – are crucial to how the economy works.  

It’s basically a clan – and informality, disputation and disrespect for authority are core Danish traits. There are a few clear goals and lots of leeway to achieve them. 

Source: IEDC 

Innovation NZ style (BEST PRACTICE)

November 15, 2007

An advanced food pilot plant is under construction in NZ – $6.5 million cost – completion by February 2008 – at the Institute of Food Nutrition and Human Health on Massey University’s Palmerston North campus.

It will cater both for industrial needs and academic requirements. It will meet the NZ Food Safety Authority standards and be able to produce small scale product batches which meet export certification. 

The plant includes smaller laboratories to allow sensitive work in tandem with teaching classes, a complex of chillers and freezers, a food quality assessment laboratory, and a sensory suite for consumer trials. 

Post-harvest quality has a dedicated laboratory area including 5 specialised walk-in temperature and humidity-controlled rooms. Dedicated food engineering and dairy processing equipment will be housed in separate areas, and a research area is devoted to extrusion technology – first in NZ.

Email: c.s.brennan@massey.ac.nz

Our assessment

These plants are becoming commonplace in the EC and elsewhere. For example, there is a similar plant at Werribee (outside Melbourne) which is around 8 years old. However the Palmerston North plant has the potential to be more effective than the Werribee plant, and many others. There are 3 reasons:

  • it provides a ‘lighthouse’ for increased focus on high value food product  for export markets, where NZ is already ahead of Australia.
  • it can enhance NZ’s clean, green image, where it has a clear global position.
  • it can help, by the research and market trialling of niche exotic products, leverage the mystique that NZ holds in distant global markets.

Export grants enhanced in Australia

October 16, 2007

Hidden away in the fine print of the Australian Government’s 2006 changes to the Export Market Development Grants (EMDG) scheme is a sensible, but little publicised, simplification.

It involves the extension of the EMDG for a further 5 years – taking the scheme to June 2011. EMDG is very popular with SMEs that know about it – they can get up to $150,000 a year for up to 7 years, AND it helps new exporters when they need help most. Why? Most SMEs have to spend seriously for years to market their product or IP/services overseas before sales and cashflows result. EMDG rebates up to 50 cents in the dollar up to $300,000 (after a $15,000 threshold) on eligible overseas marketing.

Subject to the legislation being passed, the changes apply to claims lodged after June 2007 i.e. for FY 2006/07. The changes also include increasing the daily overseas visits allowance to $300 a day, increased flexibility re emerging industries (e.g. digital content and services) and improved flexibility in Australian content rules. 

But the most significant change hasn’t attracted much attention – the dropping of the export performance test. This means applicants can stay in the scheme even if they have not achieved export sales. The change recognises the reality that establishing export markets takes much longer than domestic markets.

Overall the latest changes should make an already effective scheme simpler and more accessible for SMEs.  Austrade has a budget of $150 million per year to spend on EMDG and has not spent it’s budget in recent years! If a company is spending at least $60 or $70k on overseas marketing in a year, by talking to us may result in a rebate of $20 or $30k. We charge a success fee – there is no additional expenditure involved. Export sales are not necessary – but we need to prove the expenditure is a genuine marketing expense. 

Contributed by Don Greig, EMDG specialist forCanberra lobbyist, Geomentus. Don is a former senior official in Austrade, which administers EMDG.  Go to dkgreig@bigpond.com

Tyranny of Distance is explanatory factor’ says Treasury official

October 16, 2007

Australia’s productivity level has hovered around 80% of the US level for the last 50 years.  The pervasiveness and size of this gap suggests that there is more to it than just differences in economic policy.

One explanation might be found in the natural circumstances of the two countries. The US is 15 times larger in population and 18 times larger in output – and can thus take advantage of economies of scale and scope. The 2003-04 Australian Budget Papers highlighted our internal and external geographic circumstance and noted that ‘fully achieving economies of scale and scope in many industries requires large markets, either domestically or internationally through trade’.

These advantages do not reside with Australia. Gravity trade models provide a good example of the effect of Australia’s distance on trade performance. These models explain how Australia’s distance to the world’s ‘economic mass’ has an impact on Australia’s expected level of trade. Note also Battersby and Ewing (2005). In regressions of labour productivity on an indicator of proximity (which captures a state’s closeness to world economic output) along with physical and human capital, the coefficient on proximity was positive and significant. This suggests that the difference in the average proximity indicators for Australia and the US accounts for around 45% of the labour productivity gap. This further suggests that even over considerable distances (greater than those identified in standard agglomeration economics), there are significant external effects from being located near centres of output. 

‘Does distance matter? The effect of geographic isolation on productivity levels’. Bryn Battersby, Treasury Working Paper 2006 — 03 April 2006. Thanks to Peter Morris for uncovering this gem.  

Artisans in Africa

October 16, 2007

Following on from our dialogue with Indonesian officials about JVs in artisan work in third world countries, we sought advice from Graeme Simmons, a longstanding travel and lifestyle writer. He reports as follows: 

A good example I know of is Zambia, where some amazing crafts are being produced. However, business development is hampered by the unavailability of mortgage finance – Africans have no traditional system of land titles, so find it very difficult to get bank finance. Just lately, “microfinance” and “small scale development” are the buzz words in Zambia, with a number of lending institutions trying to get around the “no land titles” problem. 

With regard to marketing indigenous crafts to the West, it is vital to ensure that the sales proceeds get back to the people. Otherwise you get the situation that applies with some Aboriginal paintings, where the artist gets a small fee for a piece that will later fetch thousands of dollars in a top gallery in New York. One way around this might be to introduce training programs in marketing, and to develop joint ventures between local artisan communities and reputable galleries in the global cities.’ 

Contributed by simmo@globaltravelwriters.com