Issue No 11, January 1999.

NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the Advice on Publications Available.

21.1 NEW RURAL INDUSTRIES 1998

'Advancing Innovation'
First National Conference

Perth, Western Australia
18-21 October 1998

The objective of the organisers of this conference was to provide a forum that:

took an 'across the board' stocktake of approaches to new industry development
challenged conventional wisdom
built networks and
identified directions to increase Australia's performance in new rural industry development.

A dominant issue apparent from the survey of delegates was the recognition of the need to adopt a national approach to new industry development, which is market focussed.

The following provides the delegates views on the conference:

Innovative structure
Ability of attendees to directly participate
The positive approach of the attendees and their desire to help build new industries
The high quality of the speakers and their presentation which provided continual stimulation
The understanding that innovation and market focus are both vital components of new industry development
There is a depth of experience and support around Australia willing to contribute to new industry development
A national approach is needed, now
It is both inefficient and dangerous for state and regional support structures to either duplicate or compete with each other.

Key messages included:

A national collaborative approach to new industry development is needed
Customer focus is of critical importance: 'know your market and what it wants to buy'
Effective partnerships are vital throughout the supply chain, incorporating voluntary practices of information sharing
An innovative culture needs to be encouraged and supported within industries and government agencies
R&D needs to be commercially focused
New industries are all about new thinking in agriculture
Many people see new industries as regional and community development through enterprise development at the community level
New industry development may need to be more about a real appreciation of development of markets, clear differentiation of product, the concept of product branding and industry growth across regions
Use the current 'leadership' role of Agriculture Western Australia in New Rural Industry development as a catalyst for further development

Section 1: History, Trends and Scenarios
New industry development is not an option but an imperative

Stewart Key, Managing Director, Systems Intellect Group, Western Australia outlined challenges for the Australian agriculture sector. He presented options for enhancing the agriculture sector by looking to other industries' characteristics and trends.

Overseas perspective of why new industry development is an imperative

John Jones, Chief Executive, Promar International Pty Ltd, UK reviewed trends and scenarios for agricultural development worldwide, discussed the challenges for Australia, the international perceptions of Australia and the opportunities for new agricultural industries.

Futures for new industries

Mike Stephens, Rural Communicator, Mike Stephens & Associates Pty Ltd, Victoria presented a personal view of the future for the Australian agriculture sector.

Scenario plan for new industries

Professor Jo Barker, John Curtin International Institute, Western Australia outlined four options for new rural industries in Australia and discussed scenario planning methodology and how the information gathered can be incorporated in planning for the future for new rural industries in Australia.

New generations and new industries for rural revitalisation

Students from Muresk, Orange and Gatton Colleges presented the next generation's perspective of new rural industry development.

They discussed their opportunities to add value to new industry development.

Key ideas to emerge from Section 1: History, Trends and Scenarios

The world in which we live and compete is changing; current ways will not sustain a competitive advantage into the future
New rural industry development can bring both economic and social benefits with strong economic multipliers
We need to bear in mind that benefits of industry development can flow more widely than to producers alone
Benefits can flow to other stakeholders in the supply chain, to whole rural communities, and thereby through the whole economy
Australia has a range of natural advantages that lead us to a vigorous involvement in new rural industry development.
We have good natural resources, a good image and brainpower
There are more creative ways to envision a likely future for new rural industries than we have traditionally used
There is a pool of well qualified young people with potential to bring fresh thinking to new rural industry development
We need a holistic approach to food production to encompass management, production, marketing, value adding and consumer needs
Australia can capitalise on its resources of land, water, climate and expertise to develop as a food bowl
New industry development would play an integral role in this
There are many economic and sustainability issues confronting the future of agricultural industries

Key impressions of Section 1: History, Trends and Scenarios

It was an appropriate way to start off such a conference because it was thought provoking, current and widely focused
Governments need to invest more in new industry support programs

Issues, challenges and implications for new rural industry development arising from Section 1: History, Trends and Scenarios

Present bonafide, well managed and documented new industry opportunities to commercial organisations and investors for funding
Capture and develop the Australian brand for use with new rural industries Implement changes in process and capture the advantage from Australian initiatives
Ensure we encourage involvement of whole communities in, and ownership of, new rural industry development
Encourage government at all levels to focus on the strategic importance of new rural industry development
Think outside the box

Section 2: Current Approaches to New Rural Industry Development

Debate: The best avenue for new industry development is driven by market pull as opposed to innovation

Members of the Western Australia rural leadership program

Overseas new industry development

Dr Meg Howe reported on her study tour of new industry development in New Zealand

Cocoa case study

Nick Richards, Horticulture Development Officer, New Industries Program, Agriculture Western Australia presented an overview of activities recently commenced with cocoa across the top end of Australia. He showed how State government agencies and industry can work together to explore new industry possibilities

Aquaculture case study

Jasper Trendall, Aquaculture Project Officer, Fisheries Western Australia presented the long term challenges for the industry and discussed likely future scenarios for development

Allocating resources

Rob Fletcher, School of Land and Food, University of Queensland Gatton College presented a methodology for allocating resources to new industries development, particularly in regard to selection processes and support structures

Strategic intervention case study

Ray Collins, School of Natural and Rural Systems Management, University of Queensland Gatton College provided a case study on industry development from the persimmon industry, outlining the approach in shifting the industry from a low value domestic industry to a high value, quality assured export industry

Key ideas to emerge from Section 2: Current Approaches to New Rural Industry Development

Active support from the local community in which an industry is being established is important.
This support provides organisational and project scale advantages
Empowerment of new industry groups has to be balanced with the level of intervention required to maximise their effectiveness
Particular personality characteristics are required for new industry development group members
A whole of chain approach is a key success factor in the establishment of new rural industries
It is particularly important for producers to visit their markets and understand consumer driven specifications, competition, out turn issues, that is, active learning
The establishment of new rural industries is generally a long term project requiring dedicated continual effort by producers and the facilitators

Key impressions of Section 2: Current Approaches to New Rural Industry Development

There is a need for flexibility in approach to new industry development
Matching opportunities with capabilities occurs through effective team work between trade development and regional marketing officers, producers, processors and exporters

Issues, challenges and implications for new rural industry development emerging from Section 2: Current Approaches to New Rural Industry Development

Do we support regional development or market driven approaches? They can be conflicting approaches to industry development
A major impediment to the establishment of a more dynamic rural sector is the lack of understanding of each participant's role in the agribusiness chain
We need to shift our heavy reliance on the export of minimally processed commodities to high value products for which price premiums may be achieved
In a global environment, successful rural industries must continually improve market performance to remain viable
The cost of production must remain competitive
We must recognise that with a small Australia domestic market new industry development must be export focused to enable substantial growth to occur

Section 3: Lessons from Agriculture and Beyond

Developing innovation

Hetta Mollema, Technical Manager, 3M Australia, NSW described how 3M maintains a corporate philosophy and culture of innovation through which they have established market leadership in new product development

Critical success factors and strategic issues in new agricultural enterprise

David McKinna, David McKinna et al Pty Ltd, Victoria identified and discussed the critical success factors and strategic issues which affect the performance of new agricultural enterprises [His paper has been included in this issue of the newsletter]

Rural development on the Atherton Tablelands; Change, Choices and Challenges

Terry Cambell, Queensland Department of Primary Industries, Queensland described the activities occurring in the Atherton Tablelands and the support process used to move from a region heavily dependent on tobacco to other industries

Riverlink: Leading horticulture industry development in the Sunraysia-Riverland

Denise Millar, Co-ordinator Specialised Rural Industries, Department of Natural Resources and Environment, Victoria outlined a joint project between multiple levels of government and the community.

This project performed a major role in the horticultural development of the Sunraysia-Riverland region.

Key ideas to emerge from Section 3: Lessons from Agriculture and Beyond

There is a need to nurture and retain knowledge and financially support innovation
Branding and market protection strategies are vital
We need to free up employment systems to create an atmosphere whereby individuals work in a climate that enables innovators the freedom to 'advocate, embark, pioneer and champion an idea'
No matter how little you produce of a product, you need an infrastructure and market development.
However, until you have critical mass, no one will be interested in investing in support and processing mechanisms
There is a need for government to provide a flexible framework of support for new industry development
Industry organisation and unity are essential in achieving and sustaining new markets and industries

Key Impressions of Section 3: Lessons from Agriculture and Beyond

Good ideas should be encouraged and developed
How do you attract funding for infrastructure, processing facilities and marketing development, when you don't have enough product to work on?
How do you encourage people to invest in industry when processing and marketing infrastructure and systems do not exist? This issue was highlighted as a major constraint to new industry development
Industries need to be prepared to invest in new industries to ensure continued growth into the future
Strategic alliances with organisations distributing complementary, but non competitive, products can be valuable

Issues, challenges and implications for new rural industry development emerging from Section 3: Lessons from Agriculture and Beyond

There is a challenge to move from the comfort zone of commodity-orientated agriculture in Australia
If you don't pursue and react to consumer tastes you are at risk of losing your markets
There is a need for rural industries to invest in new industry/product development requiring strategic alliances in the developmental stages
Global markets do not necessarily want what we produce
Competitive advantage has been eroded in rural industries, in many regions of Australia. Australian producers must become globally competitive in production and marketing of both new and traditional agricultural products
Collaboration achieves strength in numbers, lobbying power and market effectiveness
Mechanisms are needed to drive, culture and support innovative thinking and action throughout organisations

Section 4: New ways forward

Delphi Report on Australia's view of how to accelerate New Industry Development

Gibson Associates Management Consultants, Queensland presented the result of surveys on the best processes to accelerate new industry development in Australia

Issues workshops

Hypothetical Discussion: New Industries Realities

Realities of new industry development and the manner in which Australia supports new industry development were discussed

Key Ideas to emerge from Section 4: New ways forward

We need to develop mechanisms to facilitate supply chain management. This will occur through brokering, vertical integration and partnerships
Australia needs to invest in better business management skills
Research has been poorly linked to markets
One approach to new industry development is the national/global agribusiness development approach, dependent on the traditional bureaucratic approach, with new industry development stimulated and guided by researchers
A second approach to new industry development is the community development approach, wherein innovation is stimulated by rural crises and a localised focus provides opportunity and fosters environments for change at local and regional levels
Champions and teachers should be supported, mentoring encouraged and successes publicised R&D tax incentives for export focused products should be increased
R&D should be commercially focused
No matter how good the advice is, innovation still requires drive, passion and skill

Key Impressions of Section 4: New ways forward

There can be too much dependence on government grants and finance
More education/information is needed to make the finance sector more aware of the potential benefits of new rural industries
More work is needed on the processes for new industry development

Issues, challenges and implications for new rural industry development emerging from Section 4: New ways forward

Openness, trust and mutual co-operation must be encouraged
Further development of supply chain management and marketing strategies for existing industries will provide a framework for new industries to realise export potential
There is a need to focus on the consumer before the technology - a lesson yet to be better understood and accepted
We must develop a communication strategy to increase awareness of federal, start-up, R&D and extension programs
Within the process of new industry development we can focus on new industry development or regional development. Both areas have substantial implications for the way that we do things and there can be conflict between the approaches to each
There is a need to reduce bureaucracy and create 'one stop' shops
A national approach to new industry development in Australia is needed Influence policy makers towards better resource allocation to new industry development

Section 5: Recommendations, actions and alliances

Summit: Future Directions

This workshop drew from a nationally representative group of 35 new industry proponents [they are listed below] to determine actions and directions to accelerate the development of new agricultural industries in Australia

Key Objectives for the Summit on Future Directions

To identify options on how industry and government can work together to accelerate and improve Australia' s performance in the development of new agricultural related industries and products
To assess the level of government and industry support for the development of a national new industries strategy and options for the development of an action plan that could form the basis of such a strategy

Major Issues re the Development of Sustainable and Competitive New Industries

There is a need to improve our ability to capture, value and manage knowledge
Business (and market) culture needs to focus less on production
Infrastructure is required to support innovation
Resources need to be matched to opportunities
There is currently inadequate access to capital for new innovative industries
There is currently no widely shared vision, attitude and understanding about new thinking, new industries or new products

Key Challenges re the Development of Sustainable and Competitive New Industries

Accepting the need for new industries (and resources)
Breaking down the barriers represented by states, regulation, speed of change
Establishing supply chain competence
Nurturing tall poppies
Developing strengths and overcoming negative influences and attitudes
Understanding our competitive position globally
Acknowledging our remoteness and lack of relative scale
Developing attractive investment proposals to ensure adequate capitalisation
Working together state to state, region to region, state to federal
Changing traditional mindsets against entry to, and adoption of, new industries
Achieving whole of chain thinking and action
Understanding risk aversion
Overcoming poor co-operation
Failing to accept globalisation
Closing the gap between providers of information and commerce

Summit participants

Wednesday, 21 October 1998

Producers/Commercial

Paul Gilmore
Director
Rubicon Mountain Pty Ltd
Thornton, Victoria 3712
Facsimile: 03 5773 2505

Michael Silm
Director,
Panda Ranch Marketing Pty Ltd
Thirlmere, NSW 2572
Facsimile: 02 4683 2900
Email: silmm@ideal.net.au

Richard Warner
Managing Director
Agrilink Asia Pacific Pty Ltd
New Norfolk, Tasmania 7140
Facsimile: 03 6261 2010
Email: rwarner@tassie.net.au

Martin Smallbridge
Ocean Gold Investments
Wayville, SA 5034

Mr Ally Mackay
Ally Mackay and Associates
Kardinya, WA 6163
New Industry Groups

Alan Smith
Rare Natural Fibre Advisory Committee, Rural Industries Research and Development
orporation
C/- PO Box 163
Beverley, WA 6304

Ian Rowe
President
Australian Olive Association
39 Somerton Road
Karrinyup, WA 6018
Facsimile: 08 9245 6331
Email: is.rome@bigpond.com

Consultants

Mike Stephens
Mike Stephens and Associates Pty Ltd
RMB N506, Yendon
Ballarat, Victoria 3352

David McKinna
David McKinna et al. Pty Ltd
Rear 131 Victoria Avenue
Albert Park, Victoria 3206
Facsimile: 03 9696 1965

David McIntyre
McIntyre Management and Marketing
PO Box 225
Claremont, WA 6010
Facsimile: 08 9481 7555

Peter Cooke
Agknowledge
35 Sheffield Road
Wattle Grove, WA 6107
Facsimile: 08 9453 3247
Email: cookes@iinet.net.au

Howard Hall
Pinnacle Management
1 Park Road
Milton, Queensland 4064
Facsimile: 07 3217 6905

John Horley, Director
Centre for Agribusiness Marketing
4/85 Guthrie Street
Osborne Park, WA 6017
Facsimile: 08 9445 9811

John Jones
Promar International Pty Ltd
Northcroft House, West Street
Newbury
Berkshire RG14 1HD UK

Academics

Professor Rob Clark
Head, School of Agricultural Science
University of Tasmania
GPO Box 252-254
Hobart, Tasmania 7000
Email: AAAD@agsci.utas.edu.au

Associate Professor Ray Collins
Deputy Head
School of Natural and Rural Systems
The University of Queensland Gatton College
Gatton, Queensland 4345
Facsimile: 07 5460 1324
Email: rcollins@uqg.edu.au

Dr Rob Fletcher (apology submitted)
School of Land and Food
The University of Queensland Gatton College
Gatton, Queensland 4345
Facsimile: 07 5460 1112
Email: r.fletcher@mailbox.uq.edu.au

Research

Paul Ford
Research Director
Australian Ingredient Centre
Private Bag 16
Werribee, Victoria 3030
Email: fordp@ausingred.com.au

Dr David Evans
New Plant Products
Rural Industries Research and Development Corporation
PO Box 4776
Kingston, ACT 2604
Facsimile: 02 6259 0199

Dr Peter McInnes
New Animal Products
Rural Industries Research and Development Corporation
C/- The Range, RSD 1680
Willunga, SA 5172
Facsimile: 08 8556 7289

Kim James
Horticulture Research and Development Corporation
C/- 7 Merriwa Street
Gordon, NSW 2072
Facsimile: 02 9418 1352

Lachlan Polkinghorne
National Landcare Facilitator Project
PO Box 279
Geelong, Victoria 3220
Facsimile: 03 5222 6643
Email: landcare@ne.com.au

Banking

Bruce Brown
Agribusiness - ANZ Banking Group
30/100 Queen Street
Melbourne, Victoria 3000

David Cornish
Rural Business Manager
National Australia Bank
GPO Box 84A
Melbourne, Victoria 3000

David Timmel
Agribusiness Centre
Bank of Western Australia
Perth, WA 6000

Public Sector

Denise Millar
Specialised Rural Industries Coordinator, Department of Natural Resources and Environment
PO Box 500
East Melbourne, Victoria 3002
Facsimile: 03 9637 8119
Email: denise.millar@nre.vic.gov.au

Terry Laidler
New Industries Program
Agriculture Western Australia
Baron Hay Court
South Perth, WA 6151
Email: tlaidler@agric.wa.gov.au

Malcolm Cowan
Industry Development Officer
Intensive and Emerging Industries
Department of Primary Industries Water and Environment
PO Box 192
Hobart, Tasmania 7001
Facsimile: 03 6228 5936

Cassandra Traucki
NSW State and Regional Development
Agribusiness Alternatives Group
Sydney, NSW

Ian Quin
Commercial Development, Department of Primary Industries and Fisheries
PO Box 990
Darwin, NT 0801
Facsimile: 08 8999 2200

Wayne Ryan
Assistant Director
Department of Primary Industries and Energy
GPO Box 858
Canberra, ACT 2601
Facsimile: 02 6272 3025
Email: wayne.ryan@dpie.gov.au

Other

Jane Gallagher
Australian Seafood Industry Council
PO Box 222
Deakin West, ACT 2600
Facsimile: 02 6281 0438

Ian Abernethy
Planning and Economic Initiatives
Murrindindi Shire Office
PO Box 138
Alexandra, Victoria 3714
Facsimile: 03 5772 2291

Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter

Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email: r.fletcher@mailbox.uq.edu.au

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originally created by: GK; latest update 6 June 1999 by: RF