Posts Tagged ‘Region – Asia Pacific’

NZ’s lifestyle entrepreneurs

October 17, 2007

It appears that entrepreneurs may be taking the quest for work-life balance too far.

An article in the July 2005 edition of INC Magazine looked at the situation in NZ, one of the world’s most entrepreneurial countries.  The problem is that NZ produces lots of lifestyle entrepreneurs, but not enough growth-oriented businesses. This latter set of firms produces most of an economy’s innovations and new jobs.

In the case of NZ, these firms are also most likely to enter into global markets and to look beyond their small home market. In an effort to stimulate more high-growth enterprise, the government and national universities are seeking to encourage NZ’s firms to be more aggressive in their expansion plans.  “The Trouble with Lifestyle Entrepreneurs,” by Daniel McGinn – available at www.inc.com.

To learn about the business development efforts of NZ Department of Trade and Enterprise, visit www.biz.org.nz Source: National Dialogue on Entrepreneurship (USA)

Japan embraces Enterprise Zones

October 17, 2007

At a time when many rural regions are grappling with how to deal with agglomeration effects drawing investment and jobs to the cities, it is refreshing to see that Japan is implementing strategies to ameliorate the problem.

Treasury-dominated bureaucracies elsewhere see such initiatives as picking winners or distorting the market. One of our readers has alerted us to the Japanese approach, as follows. In 2002 the Cabinet of Prime Minister Koizumi put forward the idea of special zones for structural reform, areas where certain regulations would be eased or lifted. The plan is a centerpiece of the government’s structural reform efforts. The goal is to stimulate local economies, not by mechanisms created by the central government, but by soliciting ideas that take advantage of the unique characteristics of particular areas.  The Japanese Government was hoping for a small number of projects that would result in significant economic benefits and would be easy to replicate nationwide. But the interest of local governments was much greater than expected, and there were 129 applications. The government approved roughly 90% of the applications, leading to the creation of 117 special zones for structural reform during 2003.  

Example 1 – City of Kitakyushu

Involves an “international distribution special zone” featuring 24-hour customs and quarantine services and a relaxation of the rules governing the supply of electricity. The cost of electric power has been reduced to promote the entry of new firms. After-hours customs procedures are in place at the Tachinoura Container Terminal, and the central government is being asked to extend this to the Kokura Container Terminal. 

Example 2 – Fukuoka Prefecture

One of a number of special zones seeking to expand the flow of goods internationally. It is close geographically, historically, and economically to the rest of Asia, and thus aims to make use of this relationship and develop an Asian business hub. Entry requirements for foreign researchers and engineers have been relaxed. The goal is to gather together companies doing business both domestically and abroad, to nurture venture start-ups, and to promote the economic revitalization of Kyushu and western Japan. 

Australia’s Top 10 ‘physical’ clusters

October 17, 2007

 

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).  

Regional investment in Australia

October 17, 2007
The Standing Committee on Primary Industries & Regional Services (2000) concluded “Without action to stop the reduction of services…and a new focus for investment in regional Australia, we face the danger of Australia being divided into two nations”. This view was supported by the report of the Regional Business Development Analysis Panel (Keniry et al, 2003).

 A key reason for the “two nation” divide is capital market failure – lack of available investment vehicles and instruments appropriate to the infrastructure needs of regional communities. To explain, the public private partnership (PPP) approach may be OK for encouraging private investment in metropolitan infrastructure such as roads, bridges, tunnels, railway and airport terminals where the cost is $200 million or more.  

However, at the regional level, the capital required for a natural gas spur line, a bridge repair or a water treatment plant is commonly less than $20 million. These projects are too small to attract fund managers.

Moreover the big end of town says that the governance structures in many regional areas (councils included) are not professional enough to generate proposals for serious consideration.  

A consortium of companies has been formed to address these issues. It proposes to improve the quality of both infrastructure and business investment proposals, and to then bring them forward to identified investor groups. In other words, it aims to get the right people together.

Contact us at apd@orac.net.au for more information.

And don’t forget the Telematics cluster!

October 17, 2007

And also in 2005, in response to our top 10 physical clusters was this reply from John Humphreys, who does understand his clusters.

Regarding your top 10 clusters, the next time you revise the list the telematics cluster could be in there.

It involves inter-related components i.e. attraction of investment (already confidential discussions have been held with large OEMs and others); export facilitation (the cluster has spawned a number of new exporters in the ITS/telematics field); conduct of the clusters themselves (supported by the Victorian Government and NICTA) –  attracting numbers of about 80-100 per event; industry demonstrator projects; a technology roadmap and a national capabilities handbook (400 listings in the telematics value chain in Australia).  

I have argued that the creation of a new ”niche market’ industry in Australia (featuring extraordinary growth rates globally – 72% growth in the Asia Pacific and 47% in Europe last year – can only be achieved if the above aspects are taken as an integrated whole (innovation systems approach.

Anecdotal evidence has indicated that this initiative has served to accelerate the forward plans of the automotive OEMs in Australia by at least two years – telematics is now a ‘gold star’ project under the recently signed ICT Framework Agreement between Taiwan and Australia. I have had expressions of interest, since the beginning of this initiative, from at least 7 countries. funding from the Australian Government has been tripled by an industry contribution now well in excess of $1m, which is good for an embryonic industry.

 Best wishes, John Humphreys, MD Global Innovation Centre Pty Ltd & Leader, National Telematics Industry Initiative GPO Box 2395 Brisbane Qld 4001 Email: johnh@globalinnovation.com.au

‘Don’t forget us’ says Armidale, Narrabri and Gold Coast

October 17, 2007

In 2005, we identified Australia’s top 10 physical clusters. I was inundated with queries about my parentage and sexuality. Below are some of the respectable replies.  

“Armidale NSW has established excellence livestock research and its worldwide application, particularly in genetics research and beef quality (CRC), beef cattle performance and breeding technologies. Most of the main cattle breed societies have located in Armidale. To a lesser extent, these technologies are applied to dairy cattle, sheep and other livestock.  Also, Narrabri has become a national centre for research and development of cotton (CRC) and the various technical services that underpin world class production of cotton. Many of the post-farm handling and marketing operations are also locally based.” From Roy Powell at CARE  Armidale NSW 2350 Ph: (02) 6771 3833 www.care.net.au

“I just received your recent publication re clusters and in particular, physical clusters. I think you have missed a beauty i.e. the Gold Coast Marine Precinct at Coomera. Been established about 5-6 years from absolutely nothing and now about 70 marine firms there, close on 3000 employees, private investment of $175 million plus and probably up to $175 million in export turnover.’ From Jim Fountain at Gold Coast City Council – jfountain@goldcoast.qld.gov.au

“Sometimes clusters emerge ‘by accident’ and one of the most important I’m aware of – certainly in terms of cluster size relative to the size of the host economy – is Armidale’s beef cluster. This brings together the CRC for Cattle and Beef Quality hosted at the University of New England, the Animal Breeding and Genetics Unit (AGBU), Agricultural Business Research Institute (ABRI), the Beef Industry Centre of the NSW DPI, and numerous headquarters of cattle breed societies (e.g. Hereford, Angus, Charolais, and Limousin). I suspect that these also dovetail in with wider research on expert farming systems and other livestock CRCs for sheep and poultry. Armidale hosts the intelligent end of the beef business. None of this was planned synoptically. It just happened.” From Tony Sorensen at UNE’s School of Human & Environmental Studies – Tony.Sorensen@une.edu.auu

Window for regions to sell themselves

October 16, 2007

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. 

Indonesian food investment opportunities

October 16, 2007

A no nonsense publication ‘An Investment Guide to the Indonesian Food & Agriculture Sector’ (33 pages) is now available.

 

It provide information for identifying trade and investment opportunities in fruit & vegetables, dairy products, beverages, poultry, beef products, bakery products, confectionery, snack foods, baby food, and food ingredients. The strongest growth area, perhaps not surprisingly, is poultry as well as baby food.

 The report can be accessed at www.daff.gov.au/foodinfo

Japan not in genteel decline, says Lowy analysis

October 16, 2007
In a new Lowy Institute report, Malcolm Cook and Huw McKay challenge the conventional wisdom that Japan is a nation in genteel decline. 
On the contrary, they argue that Japan’s economy, its political system and its foreign and defence policies are all undergoing fundamental transformations that will make Japan a much bigger and more unpredictable player in the affairs of the Asia Pacific region. 

 Dr. Malcolm Cook is Program Director, Asia & the Pacific (Lowy Institute) and Huw McKay is Senior International Economist at Westpac. The report can be downloaded at www.lowyinstitute.org

US concerns of decline in foreign students

October 16, 2007

The Council of Graduate Schools has released a report about the continuing decline in the number of foreign-born graduate students in the US.

The influx of global talent has been a key driver of America’s entrepreneurial economy, and declining enrolments are a concern. Overall, 57% of respondents (140 schools) saw declines in the number of foreign students applying for admission – 5% down on the previous year.

The biggest decline came from China. The report suggests that improved educational opportunities in China are leading more students to pursue their education at home. The development of new international programs in Great Britain, Australia and elsewhere is also creating a new source of competition for American graduate school programs.

See http://www.cgsnet.org/pdf/CGSIntGradReportII2005.pdf  Source: National Dialogue on Entrepreneurship