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2. Australian Wine Industry Now, to get you warmed up for the conference dinner, let’s talk about wine. Australian Wines have made a mark for themselves as a premium provider on the world stage – why do they do so well. Remote location competing against places like Italy, France, California – how do they compete. There are many reasons but a few key ones;
Local rivalry
Local demand
Government support – MIS schemes, tax breaks (opening the capital floodgates)
Group branding – recognising that they need each other to break outside of WA.
Or was it just luck?
Gary Player “The harder I work, the luckier I get”Now, to get you warmed up for the conference dinner, let’s talk about wine. Australian Wines have made a mark for themselves as a premium provider on the world stage – why do they do so well. Remote location competing against places like Italy, France, California – how do they compete. There are many reasons but a few key ones;
Local rivalry
Local demand
Government support – MIS schemes, tax breaks (opening the capital floodgates)
Group branding – recognising that they need each other to break outside of WA.
Or was it just luck?
Gary Player “The harder I work, the luckier I get”
3. Pre-Amble The industry has size but fragmented
Economic benefits are high
Support from government is essential
Investment will provide high returns.
4. Background Action Agenda (2001)
“Australia will be a global leader in the innovative provision and use of spatial information”
Investment & support lacking
ASIBA & CRCSI – mid 2007
ACIL Tasman
5. ASIBA ASIBA – Australian Spatial Information Business Association
6. The Spatial Information Industry : Who Is it?
7. Our Industry Here is some stats on our industry and even though the source is a little old, it still does give you a picture
But you shouldn’t focus on how valuable the industry, a different question has to be “how much value to our economy does that $1.366B contribute”, just like an investor is not that interested in how much a company invests in it’s infrastructure, it just wants to know the return from that.Here is some stats on our industry and even though the source is a little old, it still does give you a picture
But you shouldn’t focus on how valuable the industry, a different question has to be “how much value to our economy does that $1.366B contribute”, just like an investor is not that interested in how much a company invests in it’s infrastructure, it just wants to know the return from that.
8. Economic Impacts Lower bound verifiable case – 0.51% to 0.79% GDP ($5.3B to $8.9B)
Confidently and verifiably quantify
Estimated ‘realistic’ results – 0.99% to 1.57% GDP ($12.5B to $16.4B)
ACIL believes to be reality So based on some proven, reliable, validated but extremely complicated economic modelling that I’m not even going to start to explain, hey worked out that our industry contributes at a minimum 5-8B and probably more likely 12-16B to our economy. This is significant – so where does it come from.So based on some proven, reliable, validated but extremely complicated economic modelling that I’m not even going to start to explain, hey worked out that our industry contributes at a minimum 5-8B and probably more likely 12-16B to our economy. This is significant – so where does it come from.
9. Economic Impacts – From Where? So where does it come from. The report identifies a number of areas where benefits are derived but when it gets down to it……So where does it come from. The report identifies a number of areas where benefits are derived but when it gets down to it……
10. Economic Impacts – From Where?
11. Future Potential Potential
Lower data costs
Increasing computing power
Consumer commodity (GE, Nokia, Car Nav)
Threats
Inconsistent data pricing
Lack of awareness
Data property rights
Lack of strategic investment There are a number of threats and constraints
WA is a leader in many respects in this area and Landgate and others battled very hard over a number of years to get $30M odd $’s to build SLIP. It sounds like a lot of money but when you can commit $1.1B very quickly to a football stadium that has a shelf life of about 15 years – you soon get an idea of where we stand in the pecking order. It shouldn’t be so – I’d like to think we are more important than that.There are a number of threats and constraints
WA is a leader in many respects in this area and Landgate and others battled very hard over a number of years to get $30M odd $’s to build SLIP. It sounds like a lot of money but when you can commit $1.1B very quickly to a football stadium that has a shelf life of about 15 years – you soon get an idea of where we stand in the pecking order. It shouldn’t be so – I’d like to think we are more important than that.
12. Use of Spatial Data In regards to threats, one is the lack of investment in capturing and providing access to fundamental data sets to keep up with the demand.
The OSDM reported in it’s recent annual reports the following statistics. There are many interesting things to note in these figures but the ones that stand out for me is the growth in the use of spatial data though that period, but the lack of investment to match the growth. Now, the study didn’t go further to identify if private industry was now providing this service or whether data collection had become cheaper, but it does appear from these numbers that investment is not keeping up with demand.In regards to threats, one is the lack of investment in capturing and providing access to fundamental data sets to keep up with the demand.
The OSDM reported in it’s recent annual reports the following statistics. There are many interesting things to note in these figures but the ones that stand out for me is the growth in the use of spatial data though that period, but the lack of investment to match the growth. Now, the study didn’t go further to identify if private industry was now providing this service or whether data collection had become cheaper, but it does appear from these numbers that investment is not keeping up with demand.
13. Key Recommendations COAG to address the skills shortage.
Establish a Spatial Information Innovation Development Initiative for 5 years.
COAG to expand the quality and quantity of available FD.
14. Main Recommendations 4. COAG to invest $200M in an ASDI over the next 5 years.
Value add services to data left to private sector.
Spatial industry to be recognised by ABS.
15. The Role of Government The Michael Porter Diamond Theory (Porter, 1998) fascinated me in its simplicity and how it reined true in so many of the case studies that were put forward. Whether it was fax machines in Japan, watches in Switzerland or fast cars in Italy, the Diamond Theory seemed to hold true.
Figure 1: Michael Porter Diamond Theory
The four key factors, which Porter refers to as the "Diamond of Competitive Advantage," are based on case studies from around the world:
factor conditions, such as a specialised labor pool, infrastructure, and sometimes selective disadvantages that drive innovation;
home demand, or demanding local customers who push companies to innovate, especially if their tastes or needs anticipate global or local demand;
related and supporting industries, internationally competitive local supplier industries who create business infrastructure and spur innovation and spin-off industries; and
industry strategy, structure, and rivalry, intense local rivalry among local industries that is more motivating than foreign competition, and a local "culture" which influences individual industries" attitudes toward innovation and competition.
In addition to these four areas, Porter includes the roles of chance and government. Often historical accident and/or government actions play significant roles in the early development or site location of local industry clusters.
There are a number of premises in which Porter’s approach is based (Lewis et al, 1999);
Firms compete, not nations. Nations are competitive because they have companies that have competitive advantages.
Competitive advantage comes from innovation – in technology, marketing, organization and management.
Innovations turn into competitive advantage when resources and expertise can be turned into saleable products/services.
Competitive advantage is only maintained through continuous improvement.
Companies can “fall in love” with their own success. For sustained success, they must change.
Most government policies aimed at helping industries compete are directed in the wrong areas.
Porter recommends some strategies for business (Lewis et al, 1999) to gain advantage and it is interesting to see how my company NGIS Australia is addressing these;
Create pressures for innovation by selling to difficult buyers and channels – NGIS has done this in the past. But to be honest, I think we are getting a touch lazy as we start getting bigger and develop a large market share. Need to look at difficult customer sectors such as Petroleum, Federal Government and Mining and sell harder.
Seek out most capable competitors to motivate change – ESRI would be our most intense rival. As a group we should use them to motivate us and we do now.
Establish early warning systems – in WA well developed. Elsewhere, we are not on the ground enough.
Improve the national diamond – most senior people at NGIS are involved in industry groups of some sort.
Welcome domestic rivalry – we have being trying to eliminate it…maybe not the right move.
Use strategic alliances only selectively – we are becoming better at developing these. NGIS used to have strategic alliances with everyone under the sun but now this is limited to key partners.The Michael Porter Diamond Theory (Porter, 1998) fascinated me in its simplicity and how it reined true in so many of the case studies that were put forward. Whether it was fax machines in Japan, watches in Switzerland or fast cars in Italy, the Diamond Theory seemed to hold true.
Figure 1: Michael Porter Diamond Theory
The four key factors, which Porter refers to as the "Diamond of Competitive Advantage," are based on case studies from around the world:
factor conditions, such as a specialised labor pool, infrastructure, and sometimes selective disadvantages that drive innovation;
home demand, or demanding local customers who push companies to innovate, especially if their tastes or needs anticipate global or local demand;
related and supporting industries, internationally competitive local supplier industries who create business infrastructure and spur innovation and spin-off industries; and
industry strategy, structure, and rivalry, intense local rivalry among local industries that is more motivating than foreign competition, and a local "culture" which influences individual industries" attitudes toward innovation and competition.
In addition to these four areas, Porter includes the roles of chance and government. Often historical accident and/or government actions play significant roles in the early development or site location of local industry clusters.
There are a number of premises in which Porter’s approach is based (Lewis et al, 1999);
Firms compete, not nations. Nations are competitive because they have companies that have competitive advantages.
Competitive advantage comes from innovation – in technology, marketing, organization and management.
Innovations turn into competitive advantage when resources and expertise can be turned into saleable products/services.
Competitive advantage is only maintained through continuous improvement.
Companies can “fall in love” with their own success. For sustained success, they must change.
Most government policies aimed at helping industries compete are directed in the wrong areas.
Porter recommends some strategies for business (Lewis et al, 1999) to gain advantage and it is interesting to see how my company NGIS Australia is addressing these;
Create pressures for innovation by selling to difficult buyers and channels – NGIS has done this in the past. But to be honest, I think we are getting a touch lazy as we start getting bigger and develop a large market share. Need to look at difficult customer sectors such as Petroleum, Federal Government and Mining and sell harder.
Seek out most capable competitors to motivate change – ESRI would be our most intense rival. As a group we should use them to motivate us and we do now.
Establish early warning systems – in WA well developed. Elsewhere, we are not on the ground enough.
Improve the national diamond – most senior people at NGIS are involved in industry groups of some sort.
Welcome domestic rivalry – we have being trying to eliminate it…maybe not the right move.
Use strategic alliances only selectively – we are becoming better at developing these. NGIS used to have strategic alliances with everyone under the sun but now this is limited to key partners.
16. Download – www.ngis.com.au/walis Before I wrap up, I’d just like to mention that this presentation is now available for download on our web site at the address mentioned.Before I wrap up, I’d just like to mention that this presentation is now available for download on our web site at the address mentioned.
17. Summary The industry is large but fragmented
Economic benefits are high
$1.3B industry delivering approx. 1000% returns to economy
Support from government is essential
Institutional Building
Capacity building
Industry development
Any investment will provide high returns.
18. Australian Wine Industry The Australian Wine Industry has had a long history of building up capacity, developing innovation, getting some size but it wasn’t until the late 80’s and early 90’s that it really gathered momentum. Where is the spatial industry in the scheme of things? Are we in this period here. Because if we are; (next slide)The Australian Wine Industry has had a long history of building up capacity, developing innovation, getting some size but it wasn’t until the late 80’s and early 90’s that it really gathered momentum. Where is the spatial industry in the scheme of things? Are we in this period here. Because if we are; (next slide)
19. 1986
Importing more than exporting
In the early 80’s, I can’t remember my mother or father drinking much wine.
Then all of a sudden wine became the in thing – it was available, it was high quality and it was well marketed. It didn’t happen by accident. And the numbers speak for themselves.
Seven years ago, most of my friends didn’t know what GIS was. Today, most of my fiends use one on a dily basis. In the spatial information industry, just as our technology starts hitting the mainstream, we will follow. With government support, by working together and by thinking globally, maybe some luck will come our way.In the early 80’s, I can’t remember my mother or father drinking much wine.
Then all of a sudden wine became the in thing – it was available, it was high quality and it was well marketed. It didn’t happen by accident. And the numbers speak for themselves.
Seven years ago, most of my friends didn’t know what GIS was. Today, most of my fiends use one on a dily basis. In the spatial information industry, just as our technology starts hitting the mainstream, we will follow. With government support, by working together and by thinking globally, maybe some luck will come our way.
