Archive for the ‘Investment attraction & finance’ Category

Investment attraction – Barcelona

April 5, 2011

 

A Cockatoo member recently sought the help of the Cockatoo Network to learn of any studies that have been done on early stage “innovative” company migration. We got some very helpful replies – thank you all. One of them was from Emeritus Professor David Charles (Newcastle UK).

“I recall being in Barcelona a couple of years ago and being given a presentation on how they were looking to attract such mobile firms looking for a foothold in Europe. They had a specific scheme for them, the landing program – http://www.landingbarcelona.com/

 (It does indeed look interesting – it is a program to accelerate the growth of the select knowledge-intensive companies through globally linked co-incubation programs – Editor)

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Silverhawk’s 10 tips to make you walk TALL with the new Oz Government

September 8, 2010

I am delighted. Not for Labor, but for Australia. I won’t bore you with my reasoning, but much of Canberra has already concluded that we’re facing a rocky and fascinating road for 6-12 months, followed by an election. The mood here has been incredibly supportive of the three independents, for blasting through the entrenched power and city-centric policies of the major parties.

Katter, Oakeshott and Windsor are politicians at the top of their game. As I’ve been saying for five years, rural interests have fallen victim to political correctness and the urban elites. These independents now provide a collaborative model to ensure local interests are better reflected in policy and programs.

On behalf of the Cockatoo Network, I’d caught up with Rob Oakeshott and Tony Windsor at the National Press Club to provide our RD policy prescription. We’re now following up with this, and there are exciting opportunities for rural and urban stakeholders to explore them with us. Here’s my quick take:

 $1.8 billion in Health & Hospitals Fund – initially for regions only (is Hobart a region?)
 $500 million in Education Investment Fund – initially for regions only (awaiting details)
 $41 million for regional GPs and Aboriginal medical services (already announced)
 $66 million to go to regional businesses and workers (could be anything!)
 $173 million for regional schools (more BER wastage?)
 $1.4 billion for various infrastructure programs (not sure about this – could be old money)
 $6 billion regional infrastructure program, as announced during election campaign.
 $200 million for more affordable homes as announced (this is a crock, believe me)
 A pledge to keep broadband prices the same regardless of location (wasn’t this the intention?)
 Regions to be prioritised in construction of National Broadband Network (watch this very closely)

Here are my ten tips on what councils should be paying attention to.

1. A promise is a promise – both parties made countless promises beyond those listed above – they must be factored in and should form the basis of your negotiating strategy with both parties.

2. A better system of infrastructure planning and prioritisation – the current system is not understood or respected. BER and western Sydney transport systems put a stop to that. Councils should take the high ground and aim for a tripartite deal for regional infrastructure audits and a 10-20 year infrastructure plan. Flagged with Oakeshott-Windsor.

3. Community Cabinet – a number of councils have very good cases for convening such meetings. We’ve been preparing submissions for councils, and will continue to do so. Ring me ASAP please.

4. Indigenous employment and health – such a disaster area. Not enough room here to discuss properly.

5. Health & Hospitals Fund – a can of worms. If you have a deserving case, get your local member energised whatever his/her political persuasion. Contact us for help.

6. Investment attraction – regional councils should be seeking serious federal support to help market their region. Talk about a program of trade and investment missions (both inwards and outwards) to introduce regions and specific regional proposals to the world. Flagged with Oakeshott-Windsor.

7. Reinforce the role of the Regional Development Australia Committees – city slickers haven’t got a clue about these 55 Committees scattered around Australia Flagged with Oakeshott-Windsor, and it now appears that Julia has twigged that they need a role and funding.

8. Call for a Parliamentary Enquiry on the development of regional budgets – the current maze of competitive programs and grants must be torched. It only sets one town or region against all others, and basically keeps 3,000 Canberra bureaucrats in a job. Flagged with Oakeshott-Windsor.

9. Help the feds help you focus on ‘people’ issues – skills audits, workforce planning, links to immigration and settlement strategies, community development (important in attracting skilled people). Labor has made a mess of immigration policy, but Gillard sympathetic to education/training. Flagged with Oakeshott-Windsor.

10. Choose five issues or projects only – and then involve your local federal AND state member in addressing them. COLLABORATION is the new game in town, and virtually ALL local members are now in a marginal electorate, especially now that the benefits of independent politicians are clear..

THIS IS AN EXTRACT OF THE ‘GOOD OIL’ COLUMN, APPEARING IN THE SEPTEMBER 2010 EDITION OF LG FOCUS – http://www.loc-gov-focus.aus.net

Joseph Stiglitz’s view on the recession

August 18, 2010

The eminent US economist was in Canberra in mid August. What a great guy!

He argues that there will always be waste where the Government intervenes to stimulate the economy. The alternative is the waste of people unemployed and underutilised capital. It is a judgement call and Australia has had the best response of any of the developed nations. His argument was that austerity is totally the wrong response to the GFC – all you do is create further unemployment which weighs down on the budget in extra costs of welfare payments. Businesses don’t invest because demand is lower and growth declines. The medicine for Greece is totally wrong.

Other key points

 In the US one in six cannot get a job. 50% of the unemployed have now been unemployed more than 6 months. Unemployment for Afro Americans is up to 50%. House prices have fallen by a third and2.5 to 3 million people will lose their homes this year. 25% of mortgagees owe more than the value of their home.

 In Europe the situation is worse – unemployment at 20% and youth unemployment at 40-50% in some countries.

 He was highly critical of the banks who have been bailed out after excessive risk taking and have not learned their lessons. All the incentives continue to be directed at promoting short sighted risk taking. Payment of staff through stock options promotes dishonesty and encouraged financial institutions to move losses off their balance sheets.

 There are costs and benefits of global integration. There needs to be regulatory circuit breakers otherwise the disease and contagion will spread like wildfire as it did with the GFC. As each country tries to compete to be the least regulatory regime, there is a race to the bottom. The race was won by Iceland.

 On climate change he argued that the present cost of carbon at zero should be $60 to $70 to reflect the real costs of greenhouse gas pollution. Once a carbon price is set businesses invest on the basis of greater certainty since they know through the price mechanism what is on or off the agenda. There will be less long term investment until there is the certainty of a carbon price.

Contributed by Ross James, Chief Minister’s Department, ACT

Fiji’s Denarau Island – a high-performing cluster

August 17, 2010

Some of the Cockatoo team recently spent a week on Denarau Island (Fiji), the biggest integrated tourism resort in the southern hemisphere. It’s about 5km from Nadi on the west coast, and the ‘island’ is separated from the mainland by a muddy 30 metre wide creek.

Critics say it’s an enclave for the rich, and not typical of the real Fiji. Well this is not entirely true, because it and other resorts are now core parts of the local economy, and a large proportion of the local population is inextricably linked to them.  

Indeed, Denarau Island is a true cluster. We reckon it rates at around 78% on the Cluster ScoreCard®, a technique that the Cockatoo Network has developed to measure and compare clusters in different industries and countries. Outlined below is our preliminary assessment, based on the 10 criteria (note – the criteria are weighted, which is why they don’t add to 78%)

Social capital – The social system is quite harmonious. The Indian population, mainly Hindu, dates back 100 years and is critical to the functioning of the economy. The Fijiian population, some 55% of the population, is mainly Methodist. The various churches continue to play an important role in the social development of Fiji. The local press toes the government line, sensitive to the Bainimarama dictatorship. Despite the concerns of the Australian and NZ governments about the trashing of democracy, the locals happily go about their daily life – in actual fact, the cheeriness and politeness of the native Fijiians is a defining feature, and the Indo-Fijiians aren’t far behind. Rugby and soccer help provide social glue. 9/10.

Local champions – while the initial champions of Denarau Island are not in evidence, it’s the Nadi residents and workers who actively champion the resort. Thousands of Australian and NZ families also provide word-of-mouth testimonials. 8/10.                        

Critical mass of suppliers – the labour supply to the tourism resorts is HUGE. For example, the Sheraton/Westin operation employs 900 staff, most of whom work 32 hours/week. This equates to 1.2 staff per room. Virtually all resort staff is Fijiian – while the resort manager explained that the Indo-Fijiians worked in back office jobs because ‘they are good with figures’, there is surely an unwritten code in operation. In terms of other supplies, fruit and vegetables are supplied by local growers, and meat and dairy goods are mostly imported from Australia and NZ. Land, even outside the development zones, is relatively expensive. Inbound tourist operators, hire cars, taxis, buses, restaurants are extensive. The suppliers of airline services are critical e.g.  cheap flights offered by Virgin Blue have stimulated tourism traffic. 9/10.

Governance structures – each resort appears to have a well-structured management system, and a wider group meets to decide with the local council on issues affecting all resorts. The national government does not appear to interfere. Things tick along pretty well, although NZ investors in strata titles at one resort are currently hurting allegedly due to slick advertising by a third party. 9/10.

Specialised infrastructure – there is a quality golf course, and a Marina/shopping and dining precinct hosts some 30 businesses. Nadi Airport provides the critical trigger – the NZ Government funded its construction during World War II as a base for the US Air Force. The site was one of the few pieces of flat land. 9/10.

Technology/knowledge formation – the secondary school system is quite good, and the Denerau Island resorts recruit their staff from the secondary schools and then train them up e.g. cookery, building maintenance, administration, environmental management. A strengthened role for multinational resort companies in training local staff and nurturing Fiji’s future leaders is much under-appreciated, and the Cockatoo Network’s Sunrise Program proposes initiatives in this field. 8/10.

Local competition – the biggest resort on Denarau Island is the US-owned Complex property Sheraton & Westin with a combined 700 rooms/villas, plus the US-owned Hilton, Radisson and Trendwest, plus the French-owned Sofitel. The competition stretches to the 50 resorts across Fiji’s two main islands, but particularly to the 30 or so from Nadi to the Coral Coast that feed off the proximity to Nadi Airport. 9/10

Sophisticated home demand – the resorts are outside the reach of most locals, hence this has not nor will be a major factor in its development. 3/10.            

Growth prospects – strong upside still exists. The Westin resort was running at 75% occupancy in July 2010, which is good given the current global tourism market. Denarau Island itself has further land for development. Future tourism growth in the Fiji market is uncertain, although the Fijiian Government has devalued its currency to maintain its competitiveness, and is currently courting Asian investors and tourists. This is a legitimate response to Fiji’s cool political relations with its neighbours, and an effort to broaden its economic relationships. 7/10.

Existence of threat – this criterion is important for some clusters in terms of creating a ‘call to arms’. There are no major threats to Denarau Island. Traditionally the major threat to such tourism ventures are escalating airfares. However this is not an issue given the very competitive airfares currently available.  Political risk is also minimal because tourism revenues are critically important to addressing Fiji’s chronic trade imbalance. The Bainimarama dictatorship does not appear to be a threat to the ongoing operation of the resorts. The main threats are nature-based i.e. cyclones, floods, tsunamis. 5/10.

If you’d like your cluster assessed, please contact us! Go to apdcockatoo@iprimus.com.au

King Island pushes the envelope

August 16, 2010

We regularly feature a region with potential to build on particular competitive advantages. This month we focus on King Island.

 This island in Bass Strait is a fascinating case study for regional development practitioners. King Island cheese and beef is now an international brand. Locals explained to me a few years back that the triggers were strong collaboration between its farmers, their uptake of QA systems, their attention to the whole supply chain, and the vision of the Gilbertson family when it ran the abattoir.

 However the competitive disadvantage of the island remains the cost of airfares to the mainland, which restricts tourists arriving to enjoy first-hand the food, the marvellous 9 hole golf course, the scenery and walking trails etc. I figure that if that if the island’s population could recover to around 3,000 (currently 1700) and if Greg Norman or similar further developed the golf course, more competitive air fares might ensue, and thus strengthen its tourism and accommodation revenues. But I digress.

 Last month the prospect emerged of King Island becoming a home to new settlers and displaced families from overseas. King Island Council sees it as a safe and beautiful place with a welcoming population, and many displaced families are looking for such locations.

 Mayor Charles Arnold explained that they are not looking for a detention centre, or secure accommodation. “What we offer on King Island is a place families can live and be part of a warm community. We are also unique in that we have over 100 jobs that are presently filled by international students on working visas. While these students fit in very well, we really do want people to move here permanently.”

Gee, King Island Council deserves the highest praise for thinking outside the square and trying to solve the refugee problem in a more humanitarian and cost-effective manner than some of the efforts to date. As Charles emphasised, it’s about new settlers who might come from Burma, Iraq, Afghanistan or wherever to work in the abattoir, the cheese factory, the various farms or shops. It follows the example of the Cobram area that has assimilated Iraqi refugees into the rural lifestyle and job market. Charles indicated that his proposal is receiving serious consideration by the Department of Immigration. It’s seems that King Island would be best suited for families already assessed and given residency in Australia.

In any case, while immigration policy is the big up-front issue, it surely needs some cross-silo consideration to include employment, training, workplace relations, small business assistance, family and community development etc. Leaving it to solely the Department of Immigration risks a ‘thanks for your suggestion’ response. I hope I’m wrong because it’s a great test-case for federal and state agencies to work with the King Island community to develop a best practice model. In doing so, it would help other councils looking to push the envelope.

This article appeared in the ‘Good Oil’ column in LG Focus, August 2010

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?

Sunrise Program

May 25, 2010

 The biggest constraint in getting trade and investment deals underway is the inertia among SMEs and the development agencies that support them. This is not due to a lack of interest – the inertia stems from:

  • The time and resources in finding true business collaborators.
  • Not knowing who to talk to. The critical knowledge is often embedded in people and networks that are not immediately known.
  • The difficulty in finding partners with a similar mindset, and with integrity. 
  • The lack of quality time to brainstorm opportunities face-to-face with such parties.
  • The complexity of legal, tax and governance issues in the other country.

 These problems are amplified at the sub-regional level where interaction with big business is irregular, and where the connectivity channels are not as developed as in the major cities. This is where industry networks and clusters come into their own. The Cockatoo Network has many members at the regional level, and we want to engage YOU in this Program.

 We believe that the Program will work best at the industry level – accordingly we have developed a first-cut classification – Aquaculture, Agriculture, Automotive, Aviation, Biotechnology, Chemicals and plastics, Clean Energy, Clothing-Footwear-Leather, Creative Industries, Defence, Engineering, Environment, Healthcare, ICT, Oil and Gas, Logistics, Marine, Mining Technology and Geology, Food and Beverages, Metal Fabrication, Paper & Paper Products, Services,  Telecommunications, Timber and timber products.

 We are looking to identify for networks and clusters across national borders to trade intellectual property, manufacturing processes, products and services. If you can appreciate our goals, please email us ASAP. We have people in the USA, Australia, NZ, Germany, Bangladesh and France currently thinking through how best to proceed. We might convene a workshop in coming months.

 We’d love to hear from Cockatoo members:

  • involved in clusters or networks that fit the bill.
  • looking to do joint research across borders.
  • with ideas of how we might attract funding from government.
  • with an interest in attending a workshop to progress the concepts.
  • With any bright ideas!

 

Pacific Islands challenge

May 25, 2010

The Free Trade Agreement between Australia, NZ and Pacific Island nations is moving ahead, but not without some angst. Known as PACER Plus, the FTA has drawn criticism. For example, Adam Wolfenden (self-styled critic of the FTA) says that PACER Plus was less about economic development and “more about getting Australian and New Zealand services to invest in the Pacific.”

Wolfenden goes on to say ‘If the development interest of the Pacific is at the heart of the intentions of Australia and New Zealand, like they continually say it is, why must it look like a free trade agreement? The global economic crisis as well as others like the food and climate crisis have shown the failure of the free market. The Pacific so far has been somewhat slow to embrace the neo-liberal ideology and given the global crises it would seem like the time to start exploring other options.”

Well we know the free market isn’t perfect, but surely getting A-NZ companies to invest in the Pacific is the ONLY way to go! We have started talks with the Australian Government (DFAT) to shape some initiatives. In this regard, Wolfenden’s concerns are a useful reference point. Anyone interested in these talks should contact us at apdcockatoo@iprimus.com.au

Entrepreneurs and geography

May 9, 2010

 

The Harvard Rappaport Institute for Greater Boston is sponsoring a series of talks on geography and entrepreneurship. Now, it has released a Policy Brief that explores the question of “Why are some metropolitan areas so much more entrepreneurial than others?” For example, startups can be found on every block in Silicon Valley, while in declining Rust Belt cities startups are far and few between.

Authors Edward Glaeser and William Kerr report that high levels of entrepreneurship are closely correlated with regional economic growth. This means that “state and local policymakers may well want to do more to encourage entrepreneurship in their communities.” They offer a few tentative policy insights:

  • Investing too much in attracting large, mature firms may not be good policy. 
  • Little reason to have much faith in the ability of local governments to play venture capitalist.
  • Policymakers should focus on quality of life policies that can attract smart, entrepreneurial people.
  • Universities should get involved in local start-ups and train students to be entrepreneurial. 

Glaeser & Kerr argue that entrepreneurs are influenced by features of their local economies, and they in turn influence the fates of those economies. Yet, urban economists only infrequently looked directly at the local causes and consequences of entrepreneurship, including policies/programs of local and state governments in those regions. Can the economic history of Detroit be told without Henry Ford and Alfred Sloan? Would Ford have achieved the same success if he had worked in Houston? Would Silicon Valley have experienced its remarkable growth without Terman and Shockley? Powerpoint presentation by Edward Glaeser

Angles for Cockatoo members

  • Who in your region understands the issues raised by Glaeser & Kerr?
  • Is there scope to establish a parallel study? Contact us if you’d like to pursue.

 Thanks to Mark Marich (Policy Dialogue on Entrepreneurship) for alerting us to this research work.

 

International aid – Freo’s competitive advantage (BEST PRACTICE)

May 9, 2010

 This month we begin a series of snapshots of regions with potential to build on their competitive advantages.

 First up is the bustling community of Fremantle, at the mouth of the Swan River. First settled by Europeans in 1829, Fremantle is now a very multicultural microcosm of Perth, as Brits, South Africans, Indians, Mauritians etc. flock in. It has that funky dirt-under-the-fingernails feel to it, similar to other portside communities like St. Kilda, Port Adelaide and Balmain.

 However its point of difference is the juxtaposition of heritage buildings, restaurants, fishing boats, defence and marine activity, and the full spectrum of accommodation for tourists, consultants, yuppies, students, nurses and pensioners.

 We recently spoke with one of Bob McMullan’s advisers about Fremantle’s potential as a globally-recognised international aid delivery hub. Bob is a smart cookie who appreciates industry positioning and global branding. He hails from Perth, is a former Trade Minister, is currently the parliamentary secretary for international development assistance, and is exiting politics at the next election.

Anyway we talked about the potential for Freo to organise and market itself as an international development aid (IDA) precinct. It is the Australian air-sea port closest to Africa and the Middle East. It has extensive engineering, water, education, food and service industry capabilities. And it has the expats that can make the connections back in Africa. 

Recently we’ve tried unsuccessfully to get Cairns and Darwin interested in aid precincts, albeit with a different geographical focus.  We will chip away.