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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
NotesNotes
Overview
Outcome – establishing industry growth targets
Strategy – defining strategy for international competitiveness
PIRSA Program – prioritisingPIRSA intervention
PIRSA Input – recovering fair costs for PIRSA interventions
Government Program – determining the appropriate contribution from Government
NotesNotes
Outcome: Getting to Accelerated Wealth Generation
Inter relationship between PIRSA outcomes
OrganisationalHealth and‘Footprint’Outcome 5
Key enabler
SustainableEcosystemsOutcome 2/3
SustainableEconomic
Development
Cross Community/Govt agenda ProsperousRegional
CommunitiesOutcome 4PIRSA secondary focus
EconomicGrowth
Outcome 1PIRSA primary focus
withindustrypartners
NotesNotes
Each industry requires its own vision and growth targets
Typical industry lifecycle characteristics
TIME
High growth
Product innovation
Quality standardisation
New entrants
Growth
Slow growth
Margin pressures
Competition for market share
Mature
Product and process innovation
New growthRegeneration
GROWTH
Industry concentration
Declining demand and investment
High competition for markets
Unsustainable margins
Exodus of producers and/or concentration of industry
Product/service substitution
Decline
Fragmented
Embryonic companies
Market uncertainty
Immature distribution channels
Emerging
NotesNotes
InternationalCompetitiveness
Conditions for International CompetitivenessPorter’s Diamond
Firm Strategy,Structure and Rivalry
Related andSupporting Industries
FactorConditions
DemandConditions
NotesNotes
STRATEGY: Getting to Sustainable International Competitiveness
Porter’s Diamond
FactorConditions
(Resource Capacity)
Economic development enhancements
Productivitydevelopment enhancements
Industry strategyand structure
Firm rivalryand dynamism
DemandConditions
Firm and industry,rivalry and structure
Related andsupportingindustries
Market accessdevelopment enhancements
Develop a ready access to knowledge, skilled workforce, physical resources, capital and infrastructure
Land, water, resources
Roads, ports, rail
Courses, graduates
Management resource base
Research and development
Human capital
Maintain the sustainable integrity of the natural and social environment
Bio-security
Clean and green
Disease-free status
Bio-diversity
Develop a discerningdomestic market
Leveraging domestic characteristics intoexports
Consumer affairs
Access to internationalmarkets and market intelligence
Integrate demand chainsAssist companies make informed choices
Develop an industry operating environment that encouragesinvestment and responsiveness to markets
Taxes and charges
Accounting rules
Financial reporting rules
Markets for ‘risk’ capital
Reward systems
Business rules and regulations
Develop a business culture that encourages entrepreneurship, collaboration and innovation
Positive rewards for entrepreneurship
Competitive industry structure (NCP)
Appropriate mix of rivalry and collaboration between firms
Build strongerintegration andcost efficiencieswith operations ofcomplementaryindustries
Development ofstronger tiesbetween businessesassociated withthe value chain
Reduce transactioncosts betweenindustriesCluster/network formation
Market access
NotesNotes
Sectors need to determine their own strategic positioning
Typical growth drivers within the industry lifecycle
TIME
GROWTH
Decline
Emerging
Resourcedriven
Factor
Strategy and Structure
Demand
Related Industries
Growth
Innovation and Investmentdriven
Factor
Strategy and Structure
Demand
Related Industries
Mature
Stagnation
Strategy and Structure
Demand
Related Industries
Factor
Regeneration
Re-innovationdriven
Factor
Strategy and Structure
DemandRelated
Industries
NotesNotes
InternationalCompetitiveness
Firm Strategy,Structure and Rivalry
Related andSupporting Industries
FactorConditions
DemandConditions
The Role Government and ‘Chance’ Play in building International Competitiveness
Governmentintervention
Chance
NotesNotes
Factor conditions(Resource capacity)
Develop a readyaccess to
knowledge, skillled workforce, physical resources, capital and infrastructure
Demandfactors
Firm and industry,rivalry and structure
Related andsupportingindustries
Maintain thesustainable
integrity of thenatural and
socialenvironment
Develop adiscerningdomestic
market
Access to internationalmarkets and
marketintelligence
Develop an industry operating
environment that encouragesinvestment and
responsiveness to markets
Develop a business
culture thatencourages
entrepreneur-ship,
collaborationand innovation
Build strongerintegration andcost efficiencieswith operations
ofcomplementary
industries
STRATEGIES
IND
IREC
T M
AR
KET
INTE
RVE
NTI
ON
D
IREC
T M
AR
KET
INTE
RVE
NTI
ON
TYPES OFGOVERNMENTINTERVENTION
Human and Social Infrastructure
Physical Infrastructure
Persuasion/advice
Market creation
Subsidies/taxes
Legislation and compliance
Developing assets
Incident Response
Research
Education and training
Information distribution
PIRSA PROGRAMS: Getting to Industry Self-Mobilisation
Training and education servicesNatural resource-based infrastructure project services
Portfolio program management services
Resource regulation planning services
Compliance servicesLicensing services
Trade and market services
Research and scientific services
Data and information products and services
Incident response servicesNatural resource-based infrastructure project services
Facilitation and planning services
Research and scientific services
NotesNotes
Slight
Medium
PIRSA Programs: Getting to optimal market benefits
Prioritising PIRSA intervention
SIGNIFICANCE OF MARKET FAILURE
BENEFIT COST RATIO
None
High
Severe
Low PIRSA role defined by other policy objectives
Potential role forprivate sector
Clear role for private sector
Potential role for PIRSA
Clear rolefor PIRSA
NotesNotes
PIRSA inputs: Getting to Fair cost Recovery
Recovering a fair cost for PIRSA programs
WHO CAPTURES THE BENEFIT
Combinatione.g. Industry &
Community
Public
e.g. Community
Private
e.g. Firms/individuals
EFFICIENCY OF CHARGING
Low
Medium
HighIdentity
Attribution
Mechanism
Fully tax-payerfunded
Levy
Fees andcharges
Mix ofmechanisms
NotesNotes
ParticipantsStep
Outcome
State Governmentpolicy orientation
PIRSA policyquestions
Analyticaltool
Strategy
GovernmentPrograms
PIRSAPrograms
PIRSAinput
Bringing it together – a framework for strategic thinking and decision making
Industry, Government,Universities etc.
Industry, Government,Universities etc.
State Government
PIRSA Groups
PIRSA Groups
“Getting to acceleratedwealth generation”
“Getting to sustainableinternational competitiveness”
“Getting to industryself mobilisation”
“Getting to optimalmarket benefits”
“Getting to fair cost recovery”
What are the appropriate industry growth targets?
What is the strategy mix to build international competitiveness?
What is the appropriate contribution from Government?
What are the priorities for PIRSA’s intervention?
What is a fair level of cost recovery?
Lifecycle modelIndustry scorecardsMonash model
Porter diamondCustomer researchSWOT/PEST analysis
Market failure assessmentsGovernment directionsAccountability framework
Market failure analysisCost benefit analysisRisk assessmentProgram evaluationMinisterial directions
Public/private benefitanalysis
NotesNotes
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 UsContact Us: Location: 17h Floor, 25 Grenfell Street,ADELAIDE, South Australia 5000.
PhonePhone: 08 8226 0516 (Tim Mares)
E-MailE-Mail: [email protected]
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