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STRATEGY FRAMEWORK FOR SUSTAINABLE ECONOMIC AND INDUSTRY DEVELOPMENT (AND FOR DETERMINING AND PRIORITISING THE ROLE FOR GOVERNMENT). Corporate Strategy and Policy PIRSA, Govt. of South Australia. Notes. Outcome – establishing industry growth targets.
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STRATEGY FRAMEWORKFOR SUSTAINABLE ECONOMIC AND INDUSTRY DEVELOPMENT(AND FOR DETERMINING AND PRIORITISING THE ROLE FOR GOVERNMENT) Corporate Strategy and Policy PIRSA, Govt. of South Australia Notes
Outcome – establishing industry growth targets Strategy – defining strategy for international competitiveness PIRSA Program – prioritising PIRSA intervention PIRSA Input – recovering fair costs for PIRSA interventions Overview Government Program – determining the appropriate contribution from Government Notes
Economic Growth Outcome 1 PIRSA primary focus Organisational Health and ‘Footprint’ Outcome 5 with industry partners Sustainable Economic Development Key enabler Prosperous Regional Communities Outcome 4 Cross Community/Govt agenda Sustainable Ecosystems Outcome 2/3 PIRSA secondary focus Outcome: Getting to Accelerated Wealth Generation Inter relationship between PIRSA outcomes Notes
High growth Product innovation Quality standardisation New entrants Slow growth Margin pressures Competition for market share Product and process innovation New growth Regeneration Fragmented Embryonic companies Market uncertainty Immature distribution channels Decline Industry concentration Declining demand and investment High competition for markets Unsustainable margins Exodus of producers and/or concentration of industry Product/service substitution Emerging Growth Mature Each industry requires its own vision and growth targets Typical industry lifecycle characteristics GROWTH TIME Notes
Firm Strategy, Structure and Rivalry International Competitiveness Factor Conditions Demand Conditions Related and Supporting Industries Conditions for International Competitiveness Porter’s Diamond Notes
Economic development enhancements Porter’s Diamond Factor Conditions (Resource Capacity) Demand Conditions Firm and industry, rivalry and structure Related and supporting industries Industry strategy and structure Firm rivalry and dynamism Productivity development enhancements Market access development enhancements STRATEGY: Getting to Sustainable International Competitiveness Develop a ready access to knowledge, skilled workforce, physical resources, capital and infrastructure Develop a discerning domestic market Develop an industry operating environment that encourages investment and responsiveness to markets Develop a business culture that encourages entrepreneurship, collaboration and innovation Build stronger integration and cost efficiencies with operations of complementary industries Leveraging domestic characteristics into exports Land, water, resources Roads, ports, rail Courses, graduates Management resource base Research and development Human capital Positive rewards for entrepreneurship Competitive industry structure (NCP) Appropriate mix of rivalry and collaboration between firms Consumer affairs Development of stronger ties between businesses associated with the value chain Taxes and charges Accounting rules Financial reporting rules Markets for ‘risk’ capital Reward systems Business rules and regulations Reduce transaction costs between industries Cluster/network formation Maintain the sustainable integrity of the natural and social environment Access to international markets and market intelligence Bio-security Clean and green Disease-free status Bio-diversity Integrate demand chains Assist companies make informed choices Market access Notes
Strategy and Structure Strategy and Structure Strategy and Structure Factor Demand Strategy and Structure Demand Demand Related Industries Factor Re-innovation driven Factor Factor Demand Related Industries Related Industries Regeneration Related Industries Innovation and Investment driven Stagnation Decline Resource driven Emerging Growth Mature Sectors need to determine their own strategic positioning Typical growth drivers within the industry lifecycle GROWTH TIME Notes
Firm Strategy, Structure and Rivalry Government intervention International Competitiveness Factor Conditions Demand Conditions Chance Related and Supporting Industries The Role Government and ‘Chance’ Play in building International Competitiveness Notes
STRATEGIES Factor conditions (Resource capacity) Firm and industry, rivalry and structure Demand factors Related and supporting industries Develop a ready access to knowledge, skillled workforce, physical resources, capital and infrastructure Maintain the sustainable integrity of the natural and social environment Develop an industry operating environment that encourages investment and responsiveness to markets Develop a business culture that encourages entrepreneur- ship, collaboration and innovation Develop a discerning domestic market Access to international markets and market intelligence Build stronger integration and cost efficiencies with operations of complementary industries Persuasion/advice Market creation Subsidies/taxes Legislation and compliance Trade and market services Training and education services Natural resource-based infrastructure project services Portfolio program management services Resource regulation planning services Compliance services Licensing services Human and Social Infrastructure Research and scientific services Research and scientific services Research Education and training Data and information products and services Facilitation and planning services Information distribution Physical Infrastructure Developing assets Incident response services Natural resource-based infrastructure project services Incident Response PIRSA PROGRAMS: Getting to Industry Self-Mobilisation TYPES OF GOVERNMENT INTERVENTION INDIRECT MARKET INTERVENTION DIRECT MARKET INTERVENTION Notes
PIRSA Programs: Getting to optimal market benefits Prioritising PIRSA intervention SIGNIFICANCE OF MARKET FAILURE Severe Slight None BENEFIT COST RATIO Clear role for PIRSA Clear role for private sector High Potential role for PIRSA Potential role for private sector Medium PIRSA role defined by other policy objectives Low Notes
PIRSA inputs: Getting to Fair cost Recovery Recovering a fair cost for PIRSA programs WHO CAPTURES THE BENEFIT Public e.g. Community Combination e.g. Industry & Community Private e.g. Firms/individuals EFFICIENCY OF CHARGING Mix of mechanisms Fees and charges High Identity Attribution Mechanism Levy Medium Fully tax-payer funded Low Notes
Industry, Government, Universities etc. “Getting to accelerated wealth generation” What are the appropriate industry growth targets? Lifecycle model Industry scorecards Monash model Industry, Government, Universities etc. “Getting to sustainable international competitiveness” What is the strategy mix to build international competitiveness? Porter diamond Customer research SWOT/PEST analysis State Government “Getting to industry self mobilisation” What is the appropriate contribution from Government? Market failure assessments Government directions Accountability framework PIRSA Groups “Getting to optimal market benefits” What are the priorities for PIRSA’s intervention? Market failure analysis Cost benefit analysis Risk assessment Program evaluation Ministerial directions PIRSA Groups “Getting to fair cost recovery” What is a fair level of cost recovery? Public/private benefit analysis Bringing it together – a framework for strategic thinking and decision making Step Participants State Government policy orientation PIRSA policy questions Analytical tool Outcome Strategy Government Programs PIRSA Programs PIRSA input Notes
Acknowledgements and Contacts: Corporate Strategy and Policy Branch of PIRSA provides professional economic analyses to assist decision makers within Government. These services typically entail the application of standard economic tools to industry or natural resource problems, analysis of the resultant information and the development of strategy options. These analyses can be done as an input into broader PIRSA or Government submissions or inquiries, such as to PIRSA Executive, Cabinet or the Productivity Commission. Analyses are also done by Corporate Strategy & Policy instigating economic research into issues of strategic importance to the State. These analyses seek to ensure decisions are made by Government in the full knowledge of their economic implications for South Australian primary industries and the State economy. Contact Us: Location: 17h Floor, 25 Grenfell Street,ADELAIDE, South Australia 5000. Phone: 08 8226 0516 (Tim Mares) E-Mail: tim.mares@sa.gov.au