The Clustering Alliance - Number 15
This newsletter is for members/friends of Clusters Asia Pacific Inc.
– the largest cluster network in the southern hemisphere.
Our Mission -To improve the competitiveness of industries and localities within Australia and New Zealand by enhancing cluster-based development initiatives.
The legal work is currently being progressed to establish Clusters Asia Pacific Inc. as a not-for-profit association. Mr. Lou de Leeuw, a chartered accountant who is also the principal of Ecobusiness Ltd. in Adelaide, has kindly agreed to become the public officer/treasurer and sit on the Board. The Board (two year positions) is as follows:
We are awaiting receipt of an ABN to enable invoices to be forwarded to members and prospective members.
Discussions are continuing as to when this Conference will occur – August/July of this year or sometime in 2002. The main problem is that the SEGRA Conference is on in September (possibly Townsville), the RSI conference is 30 September – 3 October (Bendigo) and TCI Conference is 28-31 October (Tucson).
An excellent format has been developed for an inaugural CAP conference in Cairns – with a strong industry emphasis. There is interest from organisations in Europe and the USA in joint-venturing with us. We are working to arrive at an optimal solution – a TCI-hosted conference in October 2002 is one of the options. We will keep you advised.
We are delighted to advise that the UN Industrial Development Organisation (UNIDO) based in Vienna has joined Clusters Asia Pacific as an associated agency – on the same basis as the OECD. UNIDO is the UN body that, in tandem with UNCTAD, is responsible for economic and industrial development matters. UNIDO’s work in third world countries is of vital importance, and it is instructive that clustering concepts are being seriously pursued within UNIDO. M. Frederic Richard, a senior UNIDO official who is also a Board member of TCI, is the contact. R.Richard@unido.org
Another new and important member is the Adelaide Hills Regional Development Board, based at Stirling, a short distance east of Adelaide. Hahndorf (a ‘naturally evolved’ german food/tourism cluster) and some fast-growing lifestyle towns such as Mount Barker are in this region. The Board has an interest, inter alia, in food clusters – there are some very progressive food companies in this area. Mr. Michael Edgecombe (CEO) is the contact. CEO@adelaide-hills.com.au
A third very welcome member is the Institute of Manufacturing Management within the University of South Australia. A key player is Howard Harris, the Director of the Institute. The Institute recently won a major Commonwealth Government grant in the area of management systems to drive the revitalisation of manufacturing in SA and beyond. The Uni of SA has a strong track record in working on practical issues with the private sector. howard.harris@unisa.edu.au
Paul Frater, Director of Innovation & Systems Ltd., has forwarded the following update. Paul is an economist, and has specialised in the design and implementation of cluster processes, especially with regard to export and high value added strategies. Although based in Wellington, Paul plays a leading part in TCI conferences and works internationally. Cluster groups anywhere are invited to make contact with the kiwis – via paul.frater@innovation.net.nz or other addresses below.
The new economic development body – Industry NZ – commenced operations in November. Aims are:
In meeting this brief, Industry NZ is focusing on small business assistance, industry support and regional growth. The program has a strong regional and cluster orientation. The first three regional partnerships were announced immediately prior to Christmas for Wanganui, Marlborough, and Rotorua.
PO Box 2878, Wellington, 6001 www.industrynz.govt.nz
CEO: Neil Mackay (Bruce McLean acting until April) Operations: Murray Bain
Nelson Bays Arts Marketing Network is NZ’s premier do-it -yourself cluster. Over ten years, this voluntary cluster has positioned its region as the home of cultural tourism in NZ. Last year, the cluster attracted funding from the Government's Community Employment grants scheme in recognition of the employment generation role of arts and cultural tourism in the regional economy.
The cluster has just shifted into new premises. It is helping grandparent the Wairarapa region into a similar cluster activity. It is organising a Winter Art School at the Nelson Marlborough Institute of Technology's Nelson campus and the Nelson Arts Festival, 14-29 September. The festival includes the Wearable Arts Awards. The cluster has spawned "Creative Alternatives" to work with local architects on new building projects to design artistic work into new buildings in the region. The current project is for the redevelopment of Nelson Hospital.
Nelson Bays Arts Marketing Network CEO: Ali Boswijk
PO Box 860, Nelson http://nelsonarts.org.nz
Marine Export Cluster in Major Expansion
Following New Zealand's successful defence of the Americas Cup in Auckland, the
Marine Export Group has been enjoying a period of runaway success. The group of 150
companies is one of New Zealand's oldest clusters, and is active in the construction and
export of yachts, boats and marine equipment.
One of its recent wins was the Ministry of Economic Development's facilitation of the sale of 4ha of surplus defence land at Hobsonville in West Auckland to a Canadian super-yacht building company. Sovereign is investing $18m in a new high technology facility, and is expecting to generate export contracts of $100-120m pa over the next three years. The facility is projected to create up to 350 new jobs. It follows a similar project announced last year to establish a $80m super-yacht yard further north at Whangarei.
There are concerns that the rate of growth may be outstripping the industry's skills capability. The industry is reliant on skilled and experienced technologists, and the arrival of large new firms during a period of strong growth is placing strains on the existing skill resource.
Marine Export Group of New Zealand. Executive Director: Lane Finley
79 Gaunt Street, Westhaven, Auckland.
Arturo Condo has made contact. He is from CLACDS, the Latin American Center for Competitiveness and Sustainable Development. As he explained:
“We are part of INCAE, the Central American Institute of Business Administration. We are located in Costa Rica, and conduct our work mainly in Central America and the Andean Region in South America, although at this point we have a couple of ongoing projects in Argentina.
“Our work with clusters has consisted on what we call cluster-development efforts. These processes start with an assessment of the business environment in which an emerging cluster functions and an assessment of its strengths and weaknesses. Through broad participation of cluster participants (firms, related industries, government organizations and other organizations related to the emerging cluster) we facilitate the process of developing an agenda for the improvement of the cluster. Such agenda is translated into action projects that several project teams take into their hands. After this point, our participation is very much limited to some follow-up meetings and activities.”
For more information about INCAE, visit their website http://www.incae.ac.cr/EN/ More information at http://www.incae.ac.cr/EN/clacds/acerca/mision.shtml
Readers can contact Arturo at acondo@hbs.edu. We are sending Arturo details of our clusters in Australia and NZ.
Bob ‘No Relation’ Brown who circulates the MuNet newsletter reports that the Manufacturing Society of Australia (ManSA) is also now up and running.
“There have been difficulties in establishing an clear operational path between the Societies and the other sectors of the Institution of Engineers Australia (IEAust), but differences are now being resolved. The ManSA Chapters in Western Australia, South Australia and Victoria have a steady stream of events. NSW and Queensland have had a little more difficulty in getting a steady program together, but people are working on this.”
“ManSA had a representative (Dr Peter Wentzki of Ausnindo) at the major Indonesian exhibition, "Manufacturing Indonesia 2000" in November. This exhibition had exhibitors for all around Asia, China, Korea, and Europe, but apart from ManSA there was no other Australian representative and virtually no publicity in this country. Dr Wentzki's seminar presentation
attracted an attendance of some 400 people, interested to learn about ManSA and potential Australian cooperation. ManSA is starting to play a part in talking with politicians to suggest
alterations in policies relating to manufacturing industry. This activity will be stepped up, particularly in this year when there are several elections to be held in Australia.”
Contacts: National President (chapman@ocean.com.au) or Bob (rhbrown@eck.net.au).
An Australian Government official (formerly a consultant) sent me an email six months ago. It is a brilliant insight.
‘I joined a network once but I was disappointed that, as consultants fostering networking, they demonstrated little networking themselves. All a bit too desperate in their own businesses perhaps.
To make a network or cluster work, it needs people with confidence in themselves, a generous outlook to the effect that there is plenty of work available in the world, and a preparedness to take on and carry out action, with open reporting back.
(In terms of establishing clustering agendas)….. finding a market first, and designing/inviting the participants after that, will be the most effective. Australia’s low population density combined with, in my observation, the extreme individualism will be the major challenges.
A longer term view, with all resources mustered positively, is needed to achieve the result. Even (or perhaps particularly) at the federal level of government, the time frame for results expected is too short. We need more vision. And not just vision, but goals specified and reported against, with details filling in the vision’.
The Minister for Industry, Science and Resources, Senator Nick Minchin, announced in January funding of $325 million for 19 CRCs over the next seven years.
The aim of the CRC Program is to foster stronger links between industry, educational institutions and government, in order to develop world-class research. The program offers the business community an opportunity to collaborate with research institutions and undertake R&D relevant to industry needs. As part of regional strategy work in which my company is involved, I had to find out their location. The dollar sums are difficult to ascertain, but their locations provide a pointer as to where the critical mass lies.
Smart Internet Technology (involving groups in NSW, ACT, VIC)
Technology Enabled Capital Markets (NSW and VIC)
Value Added Wheat (NSW, SA, QLD, ACT, VIC)
Predictive Mineral Discovery (WA, VIC, ACT, QLD)
Functional Communication Surfaces (VIC, NSW, ACT)
Innovative Wood Manufacturing (All States)
Chronic Inflammatory Diseases (VIC, QLD, NSW)
Innovative Dairy Products (QLD, VIC, ACT)
Coal in Sustainable Development (QLD, NSW, WA)
Construction Innovation (QLD, NSW, VIC)
Diagnostics (QLD, VIC, SA)
Sustainable Aquaculture of Finfish All States)
Australian Weed Management (All States, ACT, NT)
Water Quality and Treatment (All except TAS)
Plant-based Management of Dryland Salinity (WA, SA, NSW, VIC)
Landscape Environments & Mineral Exploration (WA, SA, ACT, NSW)
Savannas Management – Darwin (NT, QLD, WA)
Railway Engineering and Technologies - Rockhampton QLD, NSW, VIC, SA)
Australian Sheep Industry - Armidale (NSW, QLD, VIC, SA, WA)
As predicted in two of our newsletters last year, the Regional Solutions Program (RSP) has turned out to be extremely competitive. It is the centrepiece of the Commonwealth's regional development effort - around $90 million over 4 years. The program has open-ended criteria, and has thus become a catch-all program as MPs refer their constituents off to the RSP. Reliable sources indicate that there were 700 applications in the last round.
As previously advised, a major report has been prepared by my company – ‘Clusters, Innovation & Investment’ that, inter alia, provides an overview of the key issues raised at TCI Conference in Glasgow last October. Last month we featured Bob Downes of BT Scotland and Charles Sabel of Columbia University. Here are another two excerpts.
To talk about clusters properly, one needs to build in ‘localised enterprise support infrastructure’ which helps the organic growth of firms. The advantage of clustering is that it facilitates:
There are probably 20-30 clusters in the UK – some are old such as ceramics in Stoke on Trent. A good, newer example is around Reading (Oxfordshire) where the Silverstone race circuit has facilitated the growth of a F1 motor sports cluster involving construction, testing, training – nine racing car groups (e.g. Williams and Benetton) have clustered there, with many suppliers nearby. There was poaching of skilled technicians until the authorities called a meeting and asked for cooperation.
Other examples are in IT and biotech around Cambridge and multi media around Cardiff. Germany also has four biotech clusters, including Munich and Hamburg. Most of these are located close to a source of knowledge.
Old Economy |
New Economy |
A skill |
Lifelong learning |
Labour conflicts |
Teams |
Environmental limits |
Growth |
Security |
Risk taking |
Monopolies |
Competition |
Plants |
Intelligence |
Standardisation |
Customer choice |
Status Quo |
Agility |
Hierarchical |
Distributed |
Wages |
Shared ownership |
Certain features of the New Economy are very important in the context of innovation systems. These include venture capital search laboratories, IP-driven development and incubators. Clusters will grow in importance in the New Economy, given that it requires the revitalisation of old sectors, knowledge transfer and creativity, collective learning, untraded interdependence (favours), spill-over effects from new business formation, and project-based collaboration.
Some concluding remarks:
Contact: phone 029 20 874945, cookepn@cf.ac.uk
Dr. Rosenfeld is the author of what I regard as the best, most readable book on clusters - ‘Industrial-strength strategies: regional clusters and public policy’. Copies are still available – www.rtsinc.org. He has published more than 100 books and articles, on topics such as:
The most common advantage in locational decisions is access to intelligence – companies can source inputs from anywhere, but they need intelligence.
Governments don’t give much attention to clusters in the context of labour markets, but they should because the development of clusters addresses all aspects of an industry. The dynamics of clusters can be appreciated in terms of:
The mapping of information and skills can be a valuable way of identifying the source of ideas, learning of opportunities, finding how to get assistance to address problems, and generally knowing who to call.
A very interesting seminar was held in Canberra in mid February – run by Harmony, a Swiss/EC project under the Intelligent Manufacturing Systems (IMS) program. It has partners in Germany, France Spain, USA, Japan and Australia (Uni of SA).
The aim of the project is to develop an Internet-based support system for start-ups. As Dr. Christoph Meier (CIM Centre of Western Switzerland - CCSO) explained, it is EC-funded to the tune of $US2.3 million per year (1998 – 2002).
The salient points are:
The Harmony model involves the development of four integrated networks – the use of case managers to ’hand hold’ (my words), plus three others – external partners, investors and internal parties. There is software to store and access information on ideas, technologies etc., and to then disseminate this and to make linkages with others with similar ideas. There is an in-built system to protect intellectual property.
The consensus at the seminar was that there is particular merit in this technology. While people with vision and ideas are not in short supply, the problem is in the follow-through. Formal R&D is low because of scant knowledge of R&D programs, cash flow associated with running a small business, the rigmarole of putting in application, and perhaps a lack of both confidence and familiarity in dealing with bureaucrats. It is crucially important that this is understood by policymakers. What the Harmony people and the EC has recognised is that the problem lies ahead of the venture capital funds and R&D programs.
The particular problem is that virtually all R&D programs require funding from the SME. While some ‘hurt money’ should arguably be standard in R&D programs, a good debate developed at the seminar as to how mentoring to SMEs could be improved. If you have identified the same problem, we would be interested in hearing from you.
There is no copyright on this newsletter. And our resources are not be spent on glossy newsletters……..so if you see an item that may interest a colleague, or your board members, email it to them!! We want to network to as many interested people as possible.
Regards
Rod Brown
Executive Director
This newsletter is a product of Clusters Asia Pacific Inc.
Australian Project Developments Pty. Ltd. continues to provide the editorial/distribution service.
Phone/fax 02 - 6231 7261 apd@orac.net.au