Archive for the ‘Timber & furniture’ Category

Entrepreneurship in the Northern Forest of USA (BEST PRACTICE)

January 15, 2009

 

The decline of forestry and other economic anchors has created a challenging economic climate in Maine, New Hampshire, New York, and Vermont.

 

A new regional coalition – the Northern Forest Sustainable Economy Initiative, is examining new solutions for revitalizing the area’s economy.

 

A new report contends that entrepreneurship should be a critical part of the mix. It  calls for a new system of innovation networks and entrepreneurial clusters that better link regional businesses to one another and to support programs at local universities, non-profits and government agencies.

 

The report recommends a focus on the opportunities created by the region’s beauty and natural assets. This could occur through efforts to promote eco-tourism, adventure recreation and the development of sustainable wood industries and products.

 

Go to A Strategy for Regional Economic Resurgence. Source: NDOE

 

Cluster links to India and USA (BEST PRACTICE)

June 24, 2008

 

A key success factor in investment attraction is the ability of localities to connect their knowledge, competencies and people.

We are thus in talks with agencies in India and the USA to link networks and clusters across borders – to enhance the connectivity of companies and researchers, and strengthen competitive advantages of towns and regions.

The key problem being addressing is the ’hit and miss’ involved in innovation and commercial deals. This is why development agencies and companies spend a lot of time connecting people via meetings, conferences, newsletters, websites, investment missions etc.

For example, millions of IT executives and their staffs compete daily to win business and to position themselves in each others’ markets. They crave knowledge about who is letting contracts, and which local companies they should be getting close to. This is a costly and time-consuming activity, only a small percentage of firms are amenable to joint ventures at any given time, and trust is not generated overnight. Wouldn’t it be easier with an on-the-ground ally?

We are thus identifying networks that are serious and active about collaboration and two-way investment. The aim is to have a multi-country platform to connect the key agencies within particular industries. Initial focus is on aquaculture; auto parts; biofuels; biotech; dairy foods; electronics; environmental management; food manufacturing; healthcare; information technology; marine engineering; telecommunications; textiles.

 

Contact us at apd@orac.net.au for further details.

Veneto’s competitive advantages

April 7, 2008

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Karen MacRae is a marketing consultant who practices in Bassano del Grappa in the Veneto heartland. A couple of years back she provided us with some material on the dynamics of the Veneto region of Italy. It provides interesting insights: 

 

Veneto (Venetia) is one of Italy’s larger regions (population 4.5 million – Venice, Verona, Padua, Vicenza).

 

Like most of the Italian northeast, it is now flourishing – highly mechanised agriculture, a tradition of heavy industry (oil, chemicals etc), and an explosion of smaller companies in specialised manufacturing districts. The region is No. 1 in Italy in tourism revenues and is the most export-oriented. It is characterised by 11 strong industry sectors, generally in major geographic clusters. They include:

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Metal and Mechanical – 24,000 companies. Exports = US$14 billion.

Hide Tanning – World centre of hide tanning in Vicenza – 760 tanneries, with turnover = US$3.2 billion.

Marble and graniteThe marble area is a proper district, 25 km by 25 km running along the Adige River – 1,431 SMEs and 4,000 workers. Exports have doubled to US$760 million in last six years.

Clothing – Major brands such as Benetton, Diesel, Marzotto and Stefanel – but also many SMEs.

Eyewear – 80% of Italian eyewear manufacturers – 1,000 companies. Turnover of  US$1.5 billion.

Footwear – 115-120 million pairs of shoes are manufactured yearly – 86% exported – concentrated in provinces of Verona, Rovigo – Montebelluna produces 65% of the world’s ski-boots.

Furniture – 13,000 companies in the wood/furnishings sector employing 69,000 workers.

Goldsmith’s Art – between Vicenza and Bassano is the industrial jewellery sector – 2,000+ enterprises.

Creative Craftsmanship – Veneto has 132,500 artisan companies.

Agriculture and Food – Traditional strong point of the Veneto economy.

 

The fundamentals that characterise the Veneto model are SMEs, co-existence of traditional products with technologically advanced activities, internationalisation of markets, and organisational flexibility.

 

However there are concerns regarding the lack of network technologies in small firms, the negligible contribution by the service sector to exports, and the need for training, certification, and research, particularly into Internet based technologies.  Veneto does not seem to lack the financial resources, so much as the imagination and determination to make them work better.

 

The establishment of a Veneto Internet portal to market the region’s 11 industry cluster-sectors could stimulate the rapid growth of a webservices industry sector. The starting point is seed capital to prepare a strategic plan for the Veneto Internet portal. (Karen’s company is profiled at www.pro-plan.com).

 

Hawke’s Bay NZ forestry cluster

April 5, 2008

 

 

 

The first cluster to be established in Hawke’s Bay, a region on the east coast of New Zealand’s North Island, was the Forestry, Timber Processing and Furniture Manufacturing Industries Cluster. 

 

Identification of the potential for establishing clusters in the region arose out of an analysis of the region’s key export drivers and ways in which these sectors could grow their markets, product ranges and capabilities. 

 

 

The Forestry Cluster was the first to focus on this, and see it through to active cluster behaviour.  Success has now been achieved with the cluster champion, (the region’s seaport) Port of Napier Ltd, funding the cluster as to $100,000 pa for three years.  Within this time frame, growth targets have been set to achieve full self-funding from royalty income on new market opportunities crystallised through cluster efforts.

 

The cluster contains a diverse range of participants – from forest owners, valuers and consultants, to saw millers, timber processors, solid wood re-manufacturers, furniture manufacturers and designers.  However, they all have one thing in common – they are in a timber processing value chain.

 

The primary focus of the cluster is increasing the relative amount of value added outputs, both as a logical economic development methodology but also to capture the opportunity resulting from increasing resource that will come on stream from 2003 onwards.  For example, the harvestable volumes of radiata pine will more than double from the current 943,000 m3 to 2.2 million m3 by 2003.  While markets remain strong for commodity type products (logs, wood chips, pulp, sawn lumber) it is the value-added areas of timber processing, re-manufacturing and furniture manufacturing that the cluster is now focussing its activities.

 

Current cluster projects include:

§ workforce development (with a dedicated working party delivering solutions to local training and skill needs),

§ aggregated raw material supply and shipping line management for the cluster’s independent sawmillers, and

§ furniture design (with a cluster facilitated furniture design workshop and design incubator focussing on designs specifically for radiata pine).

 

Cluster facilitator, Ron Dragt provided this material. 

www.woodnet.co.nz/forestryclusterhb

 

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 

Bungendore the Brave

November 5, 2007

David MacLaren, a native of New York, arrived in Australia in the late 60s to study philosophy and literature at the ANU. He was young and freewheeling, and developed a strong interest in woodworking at a time when arts and crafts were beginning to enjoy a strong growth phase.  

In 1983, he opened a Wood Works Gallery in the quiet, rural village of Bungendore, 25km outside Canberra. It was then a humdrum town with a few old buildings, a pub and a handful of shops where travellers might stop for a coffee or an ice-cream.  

But David MacLaren saw its potential, and he wanted a rural lifestyle with somewhere to display his furniture. He had a strong interest in connecting with his peers, so a second aim was to provide a quality outlet for furniture made by others in the region and beyond.  

The growth of his business led to a move in 1994 to a bigger building on the opposite corner. It now sells furniture crafted by 200 artisans as far afield as WA and Tasmania, and it is a ‘must see’ for tourists and homemakers. My South Aussie in-laws were genuinely impressed when they recently visited it.   

What was the secret of success? David explains that his overriding philosophy was to develop a business that injects city sophistication into country style living. As he says ‘Living rural does not give us an excuse to be slack, or sloppy or second rate. That is true of our galleries, food places and accommodation.’ In this vein, he has worked tirelessly to support art and design activities across the region.  

An early stimulus was the winning of the National Tourism Award for tourism retailing in 1991 and 1992. Follow-up feature articles in the Canberra Times assisted in raising local awareness.  

The business has grown further since then, and has leveraged off other businesses, and vice versa. While it is generally acknowledged that it and the classy, historic Carrington Hotel have ‘made’ the town, David and Toni Dale (of the Carrington) always agreed that people need a number of good reasons to visit a village like Bungendore. Hence they had to their vision to others in the village.

The population of Bungendore has grown steadily to around 2,000. The upgrading of the Carrington Hotel and the small businesses selling food, arts and craft, saddlery goods etc. has triggered a clustering effect, and Bungendore has reinvented itself. A tourism brochure, extolling its virtues of over 30 tourism businesses in the Village and 10 wineries nearby, is reprinted every 12 to 14 months – 30,000 copies are placed in tourism and accommodation facilities, mainly in Canberra. This is an initiative of the local chamber of commerce. The ‘Country Muster’, a C & W festival held the week after the Tamworth Festival, and the Annual Rodeo reinforce the image and brand. 

The next phase of Bungendore’s growth is possibly to form part of a regional network of lifestyle hubs based on natural tourism alliances. A precedent exists in the Ballarat region where outlying lifestyle towns, especially Daylesford, have been incorporated in the regional tourism product.

David says that a distinctive and under-sold feature of Canberra and the wider region is in fact its ‘good life’ features. ‘Don Dunstan, SA Premier in the 70’s when launching the Adelaide Arts Festival, said that the aim of government is and should be the attainment of the ‘good life’ for its citizens – a truly civil society. I think Canberra embodies that ideal, and it should brand itself that way. The good life encompasses all the strong points of Canberra.’ he said.

 But while the current tourism marketing emphasis of Canberra is on the national galleries, monuments and wineries, he believes that much more tourism product can be tapped in the small towns ringing the national capital – like Bungendore, Braidwood, Gundaroo and Murrumbateman. However cross-border cooperation tourism product would be essential to deliver on David’s vision. Other regional champions like Ken Helm, who has put the local wine industry on the map, might link up to ensure that it happens. 

Finally, David asked the seemingly pertinent question ‘why do cities get planned, but never small towns?’ Interesting point. Could our readers shed more light?

  

Furniture cluster – France

November 3, 2007

A report on the wood-made furniture industry of the Lorraine and the Champagne-Ardenne Regions is available in French.

It was undertaken on behalf of DATAR and the General Council of the GREF.

Three local clusters were visited and analysed with the aim of boosting innovation in the wood-made furniture industries in Chaumont (Filière bois 52, Haute-Marne), GIPELOR (Nancy) and Lorraine (PLAB, Neuchâteau).  

The report highlights the fact that thanks to networking and co-operation, firms of a cluster can better endure downturns, and that niches in energy-wood can be facilitated by innovative initiatives within cluster frameworks.

To download this report

Source: SPL INFO, splinfo@wanadoo.fr

Harvesting & Haulage cluster – East Gippsland (BEST PRACTICE)

October 16, 2007

  A group of 24 harvesting and haulage companies has formed the East Gippsland Forest Management Cooperative to undertake collaborative activities to improve their joint competitiveness and collective position in the hardwood supply chain in Victoria.

The motivation has been the introduction of mill door sales and new legislation for forest industry contractors and owner drivers. The Cooperative has just completed a strategic business planning project, partially funded by the Gippsland Agribusiness Forum, but mainly by the Cooperative itself. Project manager Rob Owen says the Cooperative has established a Business Centre at Orbost.

The Cooperative recently held a second workshop where members and community representatives agreed that the Co-op’s shareholders provide a vehicle for the socio-economic development of the Bendoc, Cann River, Orbost and Nowa Nowa districts. The Cooperative has developed and distributed its own OH&S manuals to all 24 contracting companies. This is believed to be a ‘first’ for the harvesting and haulage sector in Australia.

It is also working on other cluster initiatives including environmental management systems (EMS), establishment of a bulk fuel depot and development of a recruitment and training program.  “Recruitment and training is particularly important as there is a shortage of skilled operators in the timber industry nationally. In rural areas, these jobs pay better than the regional average, but we have to raise the profile of forestry work as a being a more secure career option than previously to attract young people to the industry. We have already held discussions with the timber industry’s national indigenous employment officer about this.” Rob said. 

Now that the business planning stage has been completed, the Cooperative is in a position to talk further to Government about taking the next steps as a recognised cluster. It trusts that recognition of its lead role will help in gaining support for the development of its EMS and recruitment and training programs.  

Source: Robin Owen & Associates. This regional development consultancy has been involved in a range of projects for the rural industries in NSW and Victoria, including cluster initiatives for Cypress NSW. Rob has particular expertise in establishing joint ventures between Australia, NZ and third countries in respect of technology transfer and marketing. Contact Rob on 0407 215237 or ppr@acr.net.au 

Nordics and NZ catch Dutch disease

October 15, 2007

CEDA (Australia) has recently published an extremely timely research paper ‘Innovation and growth in resource-based economies’ prepared by ex-UK academic, Keith Smith. Salient points include: 

It is sometimes argued that abundant natural resources are actually an obstacle to development. The “resource curse” keeps developing countries stuck in low value-added and low growth activities. The main economic explanations offered for the phenomenon are:
§          the “Dutch disease” – exchange rate appreciation as a result of the resources sector renders domestic activity uncompetitive, and labour supply decreases (as the resources sector draws off key labour inputs from the rest of the economy) combine to inhibit non-resource growth.
§          declining terms of trade and commodity instability prevent capital accumulation.
§          resources create rent-seeking behaviour that undermines entrepreneurship and growth.
§          resources sectors generally involve a lack of linkages with the wider economy. 

Finland, Sweden, Norway, Denmark, Iceland, New Zealand, the Netherlands, Canada, and Australia share some of these characteristics. These small, open economies have rested their development paths on resource-based sectors, and out of them have developed low- and medium-technology industries that have driven growth. Even where some countries – Sweden, Finland, the Netherlands – have developed significant high-tech sectors, they have supplemented the low- and medium-tech specializations. If we look at NZ, we find that innovation activity is widely distributed across all the major sectors, according with the “pervasiveness” characteristic. Within manufacturing, innovation is found across all segments, regardless of their formal classifications of technology intensity…NZ has innovative low-tech sectors. Innovation policy for resource-based economies can’t simply be based on high-tech sectors…Linkages, development blocks or clusters have not, in similar economies, emerged out of some general propensity to cluster growth – they have emerged from location-specific resources, and have developed in logical ways both forward and backward. The result is strong “vertical” clusters. For NZ, an important challenge is to technologically upgrade and innovate in food & beverages, textiles & clothing, printing & publishing, timber products etc. while also developing their upstream and downstream potential. 

Such linkages need not be directly into related manufacturing industries. The clearest case is Australia where the major financial markets in Sydney are heavily focused on specialised finance for the resource sector. Resource exploration involves major risks, and the investment markets in Perth and Sydney are heavily involved in managing the risk-spreading portfolios of the resource sector.  

A final question – Are there spillover effects related to resource extraction? Czelusta and Wright (2004) suggest that “if resources are developed through advanced forms of knowledge development, their spillover effects may be just as powerful as anything done in manufacturing”. 

Contact the editor for a copy of the full report. 

Tasmania – where economics and politics come together

October 15, 2007

Professor Rufus Davis was the Foundation Professor of Politics at Monash University.

In the late 1960s he merged it to form the faculty of Economics and Politics, on the basis that the two disciplines are inextricably entwined. There was a huge debate. These issues were mostly lost on the callow youths from regional Victoria descending on the campus – their education was more about entwinement with the opposite sex and the social construct of the Notting Hill Hotel. 

Anyway, Rufus would lecture the incoming students every March on why economics and politics cannot be separated.

Move forward to 2007 and recent developments in northern Tasmania are reinforcing the wisdom of Rufus’ words. The first example is the Devonport Hospital saga, where the federal decision to provide $45 million to overturn state procedures is astonishing. It runs counter to the federal government’s economic policies, and  is well outside the federal health policy settings.    

The second example, the Tasmanian pulp mill, is quite different. Federal Minister Malcolm Turnbull’s position on the project is basically sound. However the politics of the project are swamping its economics.

What is being lost in the debate is that the timber resource is a core part of Tasmania’s competitive advantage. It underpins its tourism, milled timber, furniture and wood chip industries.

We all agree that the latter activity is a no-no. Former Industry Minister Button summed it up when he described the export of low-value woodchips as a ‘bastard of an industry’. The proposed mill will help address this economic waste.The proposed site has been zoned for heavy industry since the Comalco smelter was constructed during the WW2. Its outstanding advantage is the proximity to two woodchip mills, and the existing port loading, gas, power, road and rail infrastructure.

If Tasmania is to move into downstream value-adding of its timber resource, then it’s probably Bell Bay or nothing. The lesson to be drawn is that mixing economics and politics results in a very combustible fuel. Malcolm Turnbull’s decision for a six-week rethink is commonsense, but deferral post-election might have been best.