Innovative types know that the most effective way to transform good ideas into great business is by collaborating with other talented people. To celebrate the Australian Innovation Festival 2007, Anthill takes a road trip to some of Australia’s hottest centres of innovation and entrepreneurship, all hail the cluster. The new millennium has delivered a new message… It’s good to share.
If you hear the word ‘cluster’ and immediately think of breakfast cereal, you are probably reading the wrong magazine. Mind you, the classic industry cluster and the type you find with bran and dried fruit do have one thing in common.
It’s a tenuous connection, but if you read the literature (compare the works of Michael Porter with the marketing copy on your generic box of cereal) you will find that both are designed to fuel growth. When you match up the organic development of cells dividing and multiplying in the human body with the exponential growth of industries through the transfer of information and the creation of industry partnerships, the similarity doesn’t seem quite so forced.
Unlike recent fads in breakfast fare, however, the industry cluster is not a new phenomenon (and if done well, will do more than snap, crackle or pop).
Industry clusters have existed since humans first realised that by working in collaboration (not necessarily in partnership) they could increase the financial returns of their commercial activities. For example, the natural formation of a rural market or bazaar at the intersection of a trading route (at any point in history) could be defined as a form of cluster. Jump to Detroit at the turn of the last century and you will find Henry Ford, the instigator of many world changing industrial ideas, coalescing his suppliers – clustering their manufacturing operations – around his assembly plant, where they would be in a position to supply “through the wall” as and when their components were needed.
The modern definition is an extension of these two examples. It refers to a group of same industry firms located together. The most cited definition is that of Michael Porter, who described a cluster in the early 1990s as “a geographic concentration of interconnected business suppliers, and associated institutions in a particular field.” In other words, the modern definition requires that clusters represent more than just the physical concentration of trade-related businesses. But why all the bluster about clusters? Because it wasn’t so long ago that economists began to notice that economic prosperity is fuelled by innovation, and that innovation is both a cause and effect of cluster development.
TRADE VS. KNOWLEDGE
The supply chain effect of clusters, such as those promoted by Henry Ford, no doubt had a lasting impression on the way industries conduct their operations. However, with markets now measured in global terms, innovation and the innovator (as a function and product of the cluster) are under the spotlight, with the emphasis of cluster research shifting toward knowledge rather than pure trade outcomes.
Porter’s method for identifying clusters consists of four identifiers: the geographical cluster (the concentration of same industries, working independently or collaboratively within a geographic area), the sectoral cluster (businesses operating collaboratively within the same commercial sector), the horizontal cluster (interconnection between businesses through the sharing of resources) and the vertical cluster (interdependence between businesses through their reliance on each other to complete a supply chain).
Obviously, the cluster types interrelate and are clearly not mutually exclusive.
Porter’s initial identification method sparked a broader international awareness of the cluster and highlighted their social and economic importance. Another outcome has been the repeated attempt by policy makers and commentators to define an ‘innovation cluster’. If innovation is the path to economic prosperity, it is clearly in the interests of a nation to identify existing and latent innovation clusters and assist their development.
But innovation itself is a highly complex process. It extends beyond the individual firm or the individual institution and involves more than science and technology. It requires public and private leadership, a highly skilled workforce, high levels of enterprise formation and highly evolved mechanisms to promote trade and information sharing.
Businesses that operate in such environments have noted that collaborative activities and networking multiply the number of ideas being generated and create more opportunities for firms to identify access and apply knowledge and ideas to their operations, making them more innovative and, therefore, more competitive.
But what makes them that way? While most clusters will fall into the first, second and/or fourth of Porter’s categories (geographical, sectoral and vertical), it is thought that category three (the horizontal cluster) holds the answer.
THE ‘INNOVATION’ CLUSTER
Delving into the composition of horizontal clusters, the most fundamental distinction is between trade driven clusters, where the emphasis is on trade between the members of the cluster and on collaborating in pre-competitive activities, and knowledge driven clusters, where the benefits are based on access to new knowledge emerging from research organisations, and knowledge held by other firms.
Trade-driven clusters are usually established by companies working together. The relationships are reactionary. They come about in response to changes in the market, involving minimal innovation, in order to avoid risk while staying competitive.
Knowledge-driven clusters actively seek to promote innovation. They do not merely respond to it. Firms in this type of cluster are willing to jointly pursue common goals on innovation projects that may involve risk.
So what then defines a so called ‘innovation cluster’?
Crudely put, innovation is finding a better way to achieve something. Knowledge-driven clusters will generally exhibit a greater desire and ability to innovate. For a cluster to be innovative in business it requires the growth of a multi-faceted, multi-tiered environment, sustained by an intense concentration of the industry’s national suppliers, export councils, advisory bodies, research organisations, regulators, education councils and funding coordinators.
In that respect, innovation clusters are an intense concentration of highly developed major and micro organisations in a location where research and development, as well as government and private infrastructure, provide the framework for a rapidly evolving nexus of innovation and export activity.
The ability to innovate is not the sole premise of the knowledge driven cluster, nor is it exclusive to the knowledge-driven cluster. However, it is these clusters with their access to shared best practices, labour and management pools and training resources that appear to drive the direction and pace of innovation. They provide an environment that speeds up the entrepreneurial process and new firm formation by providing a positive feedback loop that feeds into itself.
|
GROWTH THROUGH INNOVATION
It seems the influence of Cold War attitudes – diligently guarding secrets, maintaining an organisation that is insular, building walls that are impervious to outside collaboration – are slowly eroding. With communication mechanisms becoming less formal (think of most of your emails) and the rise of more flexible working relationships, the proliferation of clusters was inevitable.
Many industries now recognise a need for cooperation in both the application of new technologies and knowledge sharing. Organisations and their respective industry colleagues have found themselves centralising and clustering, not just for there own survival but for the advancement of their sector as a whole.
In many respects, Australia is at the forefront of cluster development. But like most advanced nations, we are still learning. If Australia is to grow up, big and strong, and achieve long-term economic prosperity, it is clear that clusters will need to become a staple of our policy and commercial diet. There’s some food for thought.
|
|
AUSTRALIAN INNOVATION CLUSTER ROADMAP
|
|
Sponsored editorial |
NEW SOUTH WALES
NSW is home to Australia’s financial services industry, most of Australia’s business R&D investment in ICT, and Australia’s highest levels of R&D investment in biotechnology, medical and health sciences. The State also has around 40 percent of Australia’s biotech and medical device companies. In an economy dominated by services industry activity, NSW’s manufacturing sector still contributes $31.5 billion to the State’s economy, while annual NSW mining and mineral product exports are worth over $11 billion.
LEVERAGING SCIENCE
NSW’s $40 million Science Leveraging Fund recently helped eight NSW research centres with their bids for further Commonwealth funding under the Australian Research Council’s Centre of Excellence program.
In March, the Commonwealth announced that the eight centres would receive continued support for their world leading R&D efforts in quantum computing, autonomous systems, ultrahigh bandwidth devices for optical systems, biotechnology, photovoltaic and photonics, mathematics and statistics, legume research, and complex dynamic systems and control.
These research facilities are making substantial contributions to industry with innovations ranging from automated container handling systems through to major financial systems technology for the banking sector.
RESEARCHING INDUSTRY SOLUTIONS
Major national and cooperative research centres based in NSW are taking up the challenge of supporting industry needs with some dramatic and world class results.
- The Sydney-based ARC Centre of Excellence for Autonomous Systems [www.cas.edu.au] works with industry on applications of robotics in mining, agriculture, defence and undersea exploration, including the fully automated Autostrad container terminal in Brisbane, co-developed for Patrick Corporation.
- The Capital Markets CRC is helping develop new and improved applications and products for the banking and finance sector.
- Partnership research projects undertaken by the ARC Centre of Excellence for Mathematics and Statistics of Complex Systems range from the analysis of export container throughput at ports, to work with Macquarie Bank.
A listing of major research facilities operating in NSW can be found at www.osmr.nsw.gov.au/research
SME INNOVATORS FIND THE ANSWERS
The depth of Australian SME innovation has been highlighted by a NSW Security Capability Directory recently co-produced by the NSW Department of State and Regional Development and Austrade. Many of the listed innovators, like Debraneys, are also found in the NSW Australian Technology Showcase (ATS) program. Debraneys Security Management Systems are powerful, cost-effective information management systems designed to meet the operational, compliance and security needs of businesses and governments. Debraneys has been operating for over ten years in the Asia Pacific region and have showcased their technology at the world-leading Australian Centre for Ocean Resources and Security (ANCORS) at the University of Wollongong.
http://ats.business.gov.au or call 02 9338 6880.
MACQUARIE INCUBATOR LAUNCHED
A new business incubator was launched at Macquarie University this March to help fledgling technology startups in the northern suburbs of Sydney.
The Macquarie Technology Business Incubator (MTBI) was launched to provide a low risk, dynamic, and collaborative environment that fast-tracks new technology businesses. It is located in the University’s Research Park which neighbours the booming Macquarie Business Park Corridor in North Ryde, and is managed by Access MQ, Macquarie University’s commercial arm.
Six university spin-off businesses are already located in the MTBI, and there is space for a further ten tenants. Physical benefits include access to office space, meeting rooms and support services and use of chemistry, biological and electronics laboratories. The incubator also provides access to a wide variety of business mentors drawn from industry, Macquarie Institute for Innovation, MGSM alumni and VentureAxess, who offer a direct link to venture capital for those businesses that are investment ready.
|
|
Sponsored editorial |
VICTORIA
Victoria is not just about fashion, motor sports and the Arts. It is a hot bed of innovation, with centres of new technology excellence spanning from Mildura in the North-West to Gippsland in the East. The city of Melbourne is bracketed by Parkville, with its cluster of biotechnology organisations, and the City of Monash, known for its tech parks and R&D facilities. With one of Australia’s most established financial communities, the setting is right for innovation and new business development in Victoria.
A focal point for innovation and new technology development in Victoria is Innovation@257, located at 257 Collins Street, Melbourne. The 14-storey building is populated by public and private sector organisation designed to stimulate new business growth. As a hub for innovators, Innovation@257 is home to a range of referral, mentoring and advisory services, as well as the location for hundreds of educational events networking opportunities every year. Over 10,500 people attended seminars, workshops and other events at the innovation hub in 2006. And the centre keeps growing, with the addition of IP Australia, Research Australia and the Australian Nanotechnology Business Forum at tenants in early 2007. The Victorian Minister for Innovation, the Hon. John Brumby MP, will re-launch the centre under its new name, Innovation@257 (formerly The Centre for Innovation and Technology Commercialisation) on Tuesday 29 May, 2007.
Q&A: DR PETER LEHMAN, DIRECTOR, INNOVIC
Dr Peter Lehman joined the INNOVIC team in early 2007, as a director and advisor to early stage startups. Lehman has over 30 years experience commercially developing innovation, most recently as Institute Director and CEO of the Victorian Institute for Chemical Sciences Limited.
My current role is Innovation
Development Manager at INNOVIC. My work involves assisting inventors and small business to develop strategic plans for commercialisation of their intellectual property. I also present public seminars dealing with topics of interest to innovators, often in conjunction with specialists in marketing, intellectual property, licensing and business skills.
The best thing about working in the Innovation@257 complex, and for INNOVIC, is the contact I have with inventors and innovators, and assisting them to transform their ideas into commercially viable products. I also coordinate judging of INNOVIC’s Next Big Thing AwardTM, the annual nationwide search for outstanding innovations, which has uncovered some astonishingly good Australian innovations.
Victoria has a strong manufacturing sector and the Victorian Government is very supportive of research, innovation and small business, which are the key to future prosperity in the state. However, new innovative businesses still often find it difficult to attract capital to grow. That is where centres like Innovation@257 and organisations like INNOVIC can help.
KICKSTART WITH VICSTART
What good is innovation if it cannot be commercialised? VicStart is a Victorian Government initiative which concentrates on the market-end of the innovation pipeline, to assist in the development of commercial skills to grow global technology businesses, boosting the development of the technology finance sector and improving linkages between industry and research. In addition to direct support in the form of advice, mentoring and networking, a number of VicStart programs and projects have also been initiated to improve the innovation business environment including knowledge exchanges and technology investment internships.
|
|
Sponsored editorial |
QUEENSLAND
CEO Craig Tobler said i.lab represents a real and tangible way that Queensland is diversifying and strengthening its growing knowledge economy. “Our startup company wouldn’t have come this far without the expertise and advice provided to us through i.lab’s fantastic program.’’
Tobler said turning a bright idea into a marketable product costs money that young companies don’t have and wouldn’t survive without government support.
Smartspeed gives elite athletes an instant, detailed analysis of their performance, including speed, endurance and reaction time, so they can work with their coaches to modify training sessions. The innovative sports science software product has been embraced by coaches around the world, including Manchester United, Arsenal and Chelsea Football clubs, New Zealand’s All Blacks, and the Scottish Institute of Sport.
Fusion Sport last year received an $80,000 Innnovation Start-Up Scheme grant to further commercialise its Smartspeed electronic system for assessing all land-based sports.
TYPIFY RE-WRITES PUBLISHING
Another Queensland company is re-writing the book when it comes to innovation. Typefi Systems has developed revolutionary typesetting software, which is being used by major international publishing companies, including Lonely Planet, the world’s leading travel guide publisher.
Graduating from the award-winning Sunshine Coast Innovation Centre – which acts as a breeding ground for innovative and dynamic companies – Typefi has spread its wings and now operates from its headquarters in Silicon Valley, California.
Typefi managing director Asia-Pacific Steve Huff said “the support we received at the Innovation Centre was integral to our success and we will continue to foster this partnership as we further develop our international presence.’’
Mr Mickel said by fostering high-technology startups Queensland is laying the groundwork for the knowledge-based industries and jobs of the future.
Q&A: GILL LAIRD-PORTCH, MANAGER, BRISBANE TECHNOLOGY PARK
In her role as manager of Brisbane Technology Park, Gill Laird- Portch provides support to hundreds of Australian innovators each year.
What’s new at the Park? The establishment of the bio. incubator in 2006 has been extremely successful in attracting a number of early stage, high growth life sciences companies onto the Park. And the Graystone Group of Companies, our development manager, is also implementing a plan to undertake a series of new prestigious quality developments over the coming years.
How does the Park encourage innovation? Events and networking opportunities are made available to companies. In particular, the hugely popular Innovation Series (Qld) luncheons bring together people from industry and research to discuss and learn how Australian, and especially Queensland, companies can pursue innovation together.
What is your proudest achievement? Being part of a team that has worked hard to develop the Technology Park into a vibrant location that is attractive to research and development organisations. In 2002, when Zernike Australia was appointed by Queensland Government to manage the Brisbane Technology Park, it was home to 38 companies, and now five years later we have in excess of 70 businesses and over 2,000 people working in the precinct.
|
|
Sponsored editorial |
WESTERN AUSTRALIA
Western Australia is undergoing a transformation – from agricultural economy to global energy powerhouse to R&D and technology hub. A foundation of this change has been innovation, from the transformation of existing, mature industries to the development of new high-tech and research-based sectors.
PARK LIFE IN WESTERN AUSTRALIA
Western Australia is investing heavily in industry-specific technology parks designed to create clusters of expertise and capabilities in one location.
Technology Park in Bentley has been a leading technology park since its inception in 1985, with 35 percent of the park focusing on Information Communication Technology (ICT) and other related services. The Western Australian Government is currently planning its expansion from 42 hectares to an area of 314 hectares. This base includes a range of high performance computing and 3D applications through the Interactive Virtual Environments Centre and an ISA/IBM joint venture.
The Australian Marine Complex in Henderson is Australia’s premier shipbuilding, repair and maintenance facility. It is part of the Australian Marine Complex Technology Precinct, another technology park focused on the State’s world-class marine, defence, oil and gas industry, research and training sectors. The AMC Technology Precinct will help ensure that these industries stay at the forefront of innovation and technology development.
Western Australia is already home to expert capabilities in subsea engineering and design sectors. The State’s technology capabilities in this sector will be extended by the proposed establishment of a subsea cluster at the Australian Marine Complex to service the oil, gas and marine industries.
www.techparkwa.org.au
www.australianmarinecomplex.com.au
WA INVENTOR OF THE YEAR 2007 AWARD
One of the richest competitions for Western Australian innovators is now open.
The West Australian Inventor of the Year 2007 Award assists the public, private and education sectors to commercialise their ideas, while promoting and enhancing a culture of innovation and entrepreneurship in the State.
“Winning the $100,000 Award is a once in a lifetime opportunity for local inventors to develop the product or service they have created and get it ready for market,” Department of Industry and Resources, Office of Science, Technology and Innovation Deputy Director General Peter Viney said in a recent media statement.
The award, administered by the Department of Industry and Resources, is helping to foster Western Australia’s inventive and creative capabilities, assisting with the development of emerging industries based on new technologies and techniques.
Inventor of the Year is part of the State Government’s $50 million InnovateWA2 policy. InnovateWA2 is working to raise the awareness of innovation as a driver of economic and technological change, maximise the commercialisation of ideas by building links between industry and research and generate more jobs and expand the export potential of the State.
VISIONARY INNOVATION
Innovator and entrepreneur Roland Butcher received more than $100,000 as winner of the State Government’s inaugural Western Australian Inventor of the Year Awards in 2006. Butcher was selected as the overall winner of the awards on Friday 15 September for LiveLens, an electro-optical technology that solves a fundamental problem in all forms of photography – image loss through poor exposure. LiveLens applies a liquid crystal technology that is manufactured using standard, commercially available microdisplay processes. It increases exposure latitude in all types of cameras, improving the technical quality of the image and providing greater scope for creative possibilities in a photo shoot.
Q&A: DR JAMES WILLIAMS, DIRECTOR, TESSITURA
Dr James Williams is a director of Tessitura, a Perth-based biotechnology incubator. He is also WA Inventor of the Year Organising Committee Chairman, and proud to call WA home.
There is some great science coming out of WA Universities. Finding the path to a commercial outcome from a city as isolated as Perth is a big challenge. Overcoming this challenge makes it all the more satisfying knowing you can live in a city like Perth. I have lived in many cities around the world and can think of none I would choose ahead of Perth to bring up a young family.
There is definitely an entrepreneurial culture in Perth. People from all sorts of backgrounds are willing to back themselves to build a business around their ideas. The challenge, of course, is to temper the enthusiasm with the reality of what challenges lie ahead for early-stage ventures.
We are as close to Singapore as we are to Sydney, and can get to Asia and Europe faster than those on the east coast. With global industries like pharma and biotech, this proximity to Asia gives Perth the potential to become a key western access point to people conducting business in this part of the world.
|
|
Sponsored editorial |
TASMANIA
As an island state, Tasmania fosters a resourceful and creative culture, its innovations permeating every industry sector, with first-class products exported all around the world. Tasmania applies innovation and creativity to a variety of endeavours, including science, manufacturing, food, information technology, telecommunications, building and construction and the arts, as well as globally competitive strengths in niche areas of marine and agricultural biotechnology.
NEW CENTRE FOR INNOVATION
The Australian Innovation and Research Centre (AIR) was launched last September in Hobart to to examine the patterns of innovation in Tasmania, including an ‘innovation census’ across all main sectors of the Tasmanian economy that will deliver a statistical picture of innovation across the State.
In examining Australian innovations systems, the centre plans to conduct a study of future innovation policy issues for Australia and an analysis of the structures and priorities of research and development in Australia.
Already, NSW Premier Morris Iemma has announced he will draw upon the expertise of the AIRC for advice on restructuring the NSW economy. The New Zealand Ministry of Economic Development has also called on the AIRC for advice on its innovation-based development strategy.
At the launch, Tasmanian Premier Paul Lennon said, the “centre will help us achieve our vision of a Tasmania where innovation is commonplace and plays a major role in improving productivity… [Managing] Professors Jonathan West and Keith Smith and their colleagues will contribute fresh ideas to Tasmania’s and Australia’s policy-makers, business leaders and the public to improve innovation, entrepreneurial performance and economic development.”
IN VINO VERITAS
Tasmanian innovator Robyn Lewis has taken a passion for wine and fine food and turned it into a scalable and replicable web 2.0 business, from her home in Hobart. “There is a book called The Long Tail, by Chris Anderson, which talks about three main web models and how to make money from each,” says Lewis. “We have taken these three, the aggregator, filter and production model, and built a web framework that can be applied to a number of industries, with a number of revenue streams.” Visit Vineyards, Lewis’s beta-product, focuses on a niche. It currently features over 250 videos, panoramas and multimedia media applications to create a constantly changing, central location for information on Australia’s 68 wine regions and an ever increasing array of food and tourism destinations.
Described by Lewis as an ‘online publishing’ business, Visit Vineyards employs user-generated , coupled with a sophisticated filtering system to generate recommendations, reviews and targeted searches, to create an easy to use and very in-depth place for travellers interested in wine and food.
“The model can be transposed to other areas of online travel. It can also be scaled internationally, for the global wine and food travel industry,” says Lewis.
BUSINESS OVER BREAKFAST
What better way to learn about business in one of Australia’s most pristine states than over breakfast. Business Over Breakfast brings together researchers and business people to create linkages with the aim of quick information diffusion, product development and competence building. Breakfasts are held regularly around the State and focus on key opportunities for collaboration. Keynote speakers offer insights into exciting research that is being undertaken in Tasmania and opportunities for product development and commercialisation. Participation is free and breakfasts will be of most interest to researchers, innovative companies and government employees who are interested in encouraging collaboration.
http://www.development.tas.gov.au/innovation/events.html#Anchor-Business-33869
|
SOUTH AUSTRALIA
It is no wonder that South Australia is a ‘hot spot’ for innovation. It is home to three Nobel Laureates and agricultural pioneers John Ridley and Robert Bower Smith. In the new millennium, South Australia is consolidating its talents, directing its attention to biotechnology, aerospace and defence innovation.
A PARK IN THE CITY OF CHURCHES
Technology Park Adelaide holds the prestigious title ‘Australia’s first technology park’, established by the Government of South Australia in 1982. It is now home to many world leaders in the high-technology sector, including Motorola, Saab Systems, Tenix and Sarstedt and many more. Companies in the Park not only enjoy its vibrant, innovative and collaborative environment, but also benefit from the distinctive opportunities it offers to support commercialisation through corporate alliances. Innovation is nurtured and encouraged at Technology Park Adelaide, aided by the number of research and development initiatives located at the adjacent University of South Australia Mawson Lake campus.
http://www.techpark.sa.gov.au/techpark/index.cfm
|
NORTHERN TERRITORY
It is said that necessity is the mother of invention. The highly diverse landscapes and extreme weather conditions of the Northern Territory have made it a fertile location for creative and innovative approaches to life and business – from native Australian food gathering to the more efficient use of land in agribusiness.
A FERTILE DESERT
The Northern Territory Government recently launched its $30 million desert knowledge precinct in Alice Springs, as an international focal point for desert knowledge activities. The 73ha core site will provide a home for the Desert People’s Centre and the Desert Knowledge Cooperative Research Centre. The centre was designed and built to minimise energy and water consumption, and develop a knowledge community for both indigenous and non-indigenous Australians. The center will further develop partnership with Aboriginal communities and help drive economic growth in the desert.
|
