Civic entrepreneurs & catalysts

 

 

Many accounts of clusters skirt around the fundamental role of the civic entrepreneur – the business owners and managers who bring their vision and commitment into the arena.

 

Dr. Alec Hansen, President of the Economic Competitiveness Group Inc. in USA says that folks looking to launch a cluster process do so with some trepidation. They read about private sector leadership, but then find themselves organising meetings with a handful of private sector participants, or propping up private sector leaders as chairs of committees.

 

But there are exceptions, and Alec provides examples:

 

§ Robert Mondavi is the founder of the Napa Valley wine cluster in California. He changed the relation between growers and producers, and introduced educational programs for growers.

 

§ Fred Terman was another “random” catalytic event. He was Dean of Stanford University’s Department of Electrical Engineering, and had a vision of close industry-university partnerships. He convinced Dr. William Shockley, the inventor of the electronic transistor, to establish in the new Stanford Industrial Park, with a brains trust of young engineers from MIT etc. But eight of the brightest were frustrated and alienated by Shockley’s caustic personality, and left to form Fairchild Semiconductor Corporation – Intel and Motorola, are descendants of Fairchild.

 

§ Alan Hald co-founded MicroAge, a Fortune 500 company in Phoenix, Arizona. However Hald still felt that Arizona had become a branch plant state, attracting mainly low-wage, low-skill jobs. So he became involved in cluster agendas – ‘There is a certain part of me that wants to ‘do good’ – I derive satisfaction from what we’re accomplishing here.  But at every one of these events I also find something that helps my company – an idea, a new contact, a possible connection. That’s what keeps me going.”

 

§ Ray Gilmartin, CEO of Merck & Co, explains “I used to pay attention to my accounting staff when they told me that the most cost-effective place to locate our research laboratories is right next to our headquarters in Whitehouse Station, New Jersey.  However, since learning about clusters of innovation, I am now building new research labs in San Diego and Southern Connecticut, so that my researchers can take full advantage of the climate of innovation in those regions.” 

 

Australia has civic entrepreneurs – in wine, food, film and TV, tourism and mining engineering, some of the examples would be Leo Buring, George Gramp, Margaret Lehmann, Maggie Beer, Graeme Kennedy, Norm Spencer, Bruce Small, and Sir John Monash to name a few.

 

These types of people play a critical entrepreneurial and/or catalytic role. How many times do we see initiatives lose momentum just because ‘it couldn’t be organised’ or there was nobody to take the lead? Sometimes they are in the wings, just waiting to be encouraged. That’s where a cluster-based approach can act as the catalyst.

 

Bungendore the Brave

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?

  

Australian wine – stereotypes from the past

J.C. Shepard, our correspondent in Colorado (#1 state for beer production per capita in USA!)reports as follows “Whenever I see ‘Australian’ and ‘wine’ in the same sentence, an image of the old Monty Python sketch (1972) inevitably pops to mind.”

UK Wine expert – A lot of people in this country pooh-pooh Australian table wines. This is a pity as many fine Australian wines appeal not only to the Australian palate but also to the cognoscenti of Great Britain.

Black Stump Bordeaux is rightly praised as a peppermint flavoured Burgundy, whilst a good Sydney Syrup can rank with any of the world’s best sugary wines.

Château Blue, too, has won many prizes – not least for its taste, and its lingering afterburn.

Old Smokey 1968 has been compared favourably to a Welsh claret, whilst the Australian Wino Society thoroughly recommends a 1970 Coq du Rod Laver, which, believe me, has a kick on it like a mule – 8 bottles of this and you’re really finished.  

Of the sparkling wines, the most famous is Perth Pink. This is a bottle with a message, and the message is ‘beware’. This is not a wine for drinking, but for laying down and avoiding.

Another good fighting wine is Melbourne Old-and-Yellow, which is particularly heavy and should be used only for hand-to-hand combat.

Quite the reverse is true of Château Chunder, which is an appellation contrôlée, specially grown for those keen on regurgitation – a fine wine which really opens up the sluices at both ends.” 

Moral of the story? Reputations can be turned around! – Ed.

Australia’s Top 10 ‘physical’ clusters

 

We are often asked to describe and explain a cluster.

 

The first thing to appreciate is the distinction between:

§          ‘physical’ clusters i.e. agglomerations of companies and support agencies that are dynamic hot spots of economic activity.

§          ‘collaborative program’ clusters i.e. where programs are implemented to drive collaborative outcomes.

 

The two groups are not the same! Many of the physical clusters have developed without formalised structures, and most of the players were never involved in formalised meetings.

 

Outlined below are our top 10 physical clusters in Australia – it is necessarily subjective, and we welcome correspondence if you agree or not! The common characteristics are lengthy gestation periods, champions, and triggers that generate further investment and economic spillovers. Interestingly, many of the triggers came from the public sector.

 

1. Cairns Airport/City Port (Qld) – infrastructure and local leaders have spurred tourism development and seafood and horticulture exports. The City Port project has transformed the foreshore and CBD. The trigger was Townsville winning state/federal government blessing in the 1980s as the regional aviation gateway. Bob Manning (then CEO of Cairns Airport) led the charge. The airline pilots strike and recession in early 1990s were further triggers.

2. Jervoise Bay (Rockingham, WA) – precinct designed to capture commercial opportunities associated with nearby defence and marine facilities, local engineering and shipbuilding companies, concrete platforms for the North West Shelf etc. The trigger was competition from Singapore, which led to visionary plans by WA Government, which then negotiated and matched an $80 million federal grant. 

3. Melbourne Docklands and Southbank (Vic) – transformed this area from an embarrassment to a highlight. It gels with the MCG, the Tennis Stadium and the parkland areas. The trigger was the commitment of a Victorian Planning Minister and his officials in early 1990s.

4. Port Lincoln (SA)  – a great example of industry putting its money where its mouth is. A network of professional fishermen saw the need to invest in R&D and training, and well-argued submissions backed by business plans attracted federal and state assistance for a multi-faceted Marine Centre.

5. Scone Equine (NSW) – local and overseas breeders are clustered here. The trigger was local government leaders who mapped out infrastructure requirements and an ingenious funding mechanism for a research centre. A world-class training track, a TAFE and a convention centre reinforce each other.

6. Canberra Airport (ACT) – the trigger was the sale by the federal government to the Snow family in 1998. This has led to a further $500+ million investment in the terminal, hangars, apron, roads, car parks, and Business Park. Consultancy businesses, freight forwarders, defence contractors etc. now operate on-site.

7. Shepparton (Vic) – a very strong food processing cluster involving around ten significant multinationals. The trigger has been water infrastructure installed in stages since the 1960s. A major road freight hub has also developed there due to backloading opportunities.

8. Barossa Wine Region (SA) – this cluster has been analysed on countless occasions. Local winemakers (Gramp, Buring, Blass et al), favourable soil and climate, Roseworthy Agriculture College.  

9. Gold Coast (Qld) – Australia’s largest-scale tourism cluster. A big champion was Alderman Bruce Small in the 50s and 60s – his bikini-wearing ‘meter maids’ (who put money in expired parking meters’) caught the attention of staid southern city dwellers. Climate, beaches, and proximity to Brisbane.  

10. Honeysuckle urban renewal project (Newcastle, NSW) – intelligent town planning and cocktail funding across three levels of government and the private sector. The trigger was exit of BHP Steel and job losses, which led to ‘Better Cities’ funding and a federal/state/BHP restructuring fund. 

Special mentions go to north Sydney ICT and life sciences, Torquay surfwear (Vic), Darwin defence/marine (NT), Salamanca Place (Tas), Bega dairy (NSW), Yarragon antiques (Vic), Brisbane Airport Qld), Virginia horticulture (SA) and Perth mining technology services (WA).  

Window for regions to sell themselves

Italy has made regional branding work – but it’s a dismal scene Downunder apart from Canterbury lamb, King Island beef and cheese, Barossa wine etc.

The situation isn’t helped by the apathy of the supermarkets and multinationals, and indifference by governments in supporting regional branding initiatives. But a window is emerging via the push for country of origin labelling on food products, courtesy of the National Party and the grower/farmer groups.

As argued here before, people have a genuine interest in knowing more about the origins of a product. If the National Farmers Federation pushed hard, the mechanism could be extended to provide greater specificity as to the source of local product – instead of some nondescript industrial suburb in Melbourne or Sydney where the company suits are located.

A good agenda for some regional organisations of councils. 

Swan Valley Premium Grape Juice (BEST PRACTICE)

Marilynn Horgan, Executive Officer, Perth Area Consultative Committee, has kindly responded a reader’s request (see Cockatoo No. 2) for case studies or businesses using grape juice. Voila!

The Swan Valley Grape Juice Association received Regional Assistance Program funding of $105,050 for a project to utilise the existing wine grape excess to trial the development of a new non-alcoholic grape juice product for the domestic market.  

The project offers the opportunity for the industry to make the transition from a traditional wine product to a fresh juice product.  It also utilises excess capacity within existing production and processing plants located in the metropolitan region.  

Opportunities for export markets in SE Asia and the Middle East have been noted but the initial crush will supply the local market with a fresh, pasteurised and additive free product. It is hoped that the project can be expanded beyond the metropolitan area to include fruit from regional areas. The project aims are to:
§          Develop a viable, alternative product for the excess of wine grapes that have been planted in the Swan Valley region and across SW Western Australia that does not detract from the sale of premium table wine and acts as a complement to existing markets.
§          Investigate the feasibility of expanding the industry for both grape products and alternative fruit products which use existing resources, equipment and infrastructure.  

The project is administered by Swan Valley Grape Juice Association.  Swan Valley Premium Grape Juice is currently sold at fresh markets in the metropolitan area and wineries and outlets within the Swan Valley. Growers interested in joint ventures might wish to contact Swan Valley Grape Juice Pty. Ltd. (Dennis Yagmich 08 – 9250 1133) or Sittella Wines for information on sparkling grape juice (08 – 9296 2600 or http://www.sitella.com.au)  

Organic food – export opportunities

Organic food and beverages are the fastest growing food categories worldwide. In the developed economies, demand outstrips supply with many markets experiencing growth rates of 10 – 30% p.a.  

The global organic market significant export opportunities. The Rural Industries R&D Corporation in Australia has funded a study that identifies opportunities and impediments, and those with the greatest export market potential. Production and processing capability are also assessed and areas of significant competence identified.

The top 5 prospective markets are Japan, Continental Europe, UK, USA and SE Asia. Top products are beef and lamb, cereal-based products, processed foods, juices, beverages, wine, jam, honey and condiments. Perishable foods will be confined to closer markets such as Southeast Asia.

Go to Export Potential for Organics – opportunities and barriers . Download the full 95-page report here.

 Contact us at apd@orac.net.au for more infomation and contacts.

North East Victoria food cluster – funding too limited

Victorian Premier Brumby announced a $50,000 grant to establish a food cluster in NE Victoria earlier this year. He said “The north-east is recognised as a prominent food, wine and tourism destination with a diverse range of small gourmet food producers…Hume Murray Food Bowl, North East Valleys Food and Wine and AlpValleys Agribusiness Forum have come together to establish the cluster.”

Brumby said it will lead to significant collaboration that can lead to substantial new development and investment. A feasibility study had identified signature projects e.g. a distribution and food logistics project and a regional food value chain.  (In tracking numerous cluster initiatives, it seems that sums like $50k are too small to meet expectations.

Our advice is to call it a network (and see if it can grow into a cluster); be very aggressive in seeking commercial outcomes; and leverage into other programs to cover the public interest aspects – Cockatoo).

Sonoma County, California (BEST PRACTICE)

This website – www.sonoma-county.org/edb – is a beauty. And we have been tracking these folks for a couple of years – Santa Rosa is their HQ, about 50km north of the Golden Gate Bridge. So we contacted Ben Stone to see if it’s OK for Cockatoo members to drop in and have a yarn.

Here is his reply. ‘Oh yes, would LOVE that! We have a coterie of Aussie and Kiwi winemakers, along with some Brits believe or not … and a few South Africans (don’t know what the nickname is for them)…so, happy to meet them!  

Ben Stone, Director, Sonoma County Economic Development Board, 401 College Avenue, Suite D, Santa Rosa, CA. Phone 707-565-7170 bstone@sonoma-county.org    

Industry Cooperative Innovation Program (ICIP) – Round 3 grants

The latest round of ICIP grants, which require collaborative arrangements between companies are noteworthy in terms of the significant funding and their industry breadth. The $ amounts have been rounded.

• ACYTE Biotechnology Pty Ltd – Rapid expression and production of monoclonal antibodies ($234K)

• Australian Manufacturing Technology Institute Ltd – Lynx Project – to connect manufacturing industry members to the latest manufacturing technologies, methodologies and techniques ($2.4 m)

• Building Products Innovation Council Ltd – Buildings and the Environment: Full Life Cycle Assessment –  consistent transparent environmental assessment principles for the Australian built environment. ($800k)

• Dayang Electronic Manufacturing Pty Ltd – harmonised business process tailored to electronics SMEs to satisfy current regulatory reporting requirements ($650k)

• healthlinks.net Pty Ltd – new standard in consumer medicine information access ($880k)

• ITS Australia – an Australian Traffic Message Channel (TMC) location table ($610k)

• OneSteel Manufacturing Pty Ltd – fire engineering knowledge for buildings of 4+ storeys ($844k).

• Outdoor Media Association – measurement tool for outdoor media ($830k)

• Water Services Assoc. of Australia – to optimise the design & assess effectiveness of biofiltration ($300k)

•  Welding Technology Institute of Aust. – design, maintain and repair critical road & rail bridges ($367K)

• Wine Industry Tasmania Ltd – R&D to improve Pinot Noir and sparkling wine for very-cool climates ($900k)