TCIOceania14 Why cluster development?
-
Upload
tci-network -
Category
Economy & Finance
-
view
175 -
download
3
Transcript of TCIOceania14 Why cluster development?
Why Cluster Development? and Why New Zealand is Underperforming Tony Caughey
30 May 2014
Northern Leading Ltd 2
Australasian ClusterConference
University of Technology, Sydney
Why Cluster Development? and
Why New Zealand is Underperforming
Tony Caughey 30th May 2014
NZ Government’s Four Economic Priorities
1. Responsibly managing the Government’s finances
2. Building a more productive and competitive economy
3. Delivering better public services within tight financial constraints4. Rebuilding Christchurch
Northern Leading Ltd
Productivity Goal +2% pa(labour)
Competitiveness Goal Incr GCR RankingsGlobal Competitiveness ReportBase Line: 23/144 countries (2012)Goal: Unquantified
Ministry of Business, Innovation and EmploymentStatement of Intent 2013-2016
May 2013
Northern Leading Ltd
Northern Leading Ltd 5
Labour Productivity
Northern Leading Ltd 6
Our Productivity Paradox
“The mystery is why a country that seems close to best practice in most of the policies that are regarded as the key drivers of growth is nevertheless just an average performer”
• - OECD 2003
World Economic Forum Global Competitiveness Report
144 countries, 113 variables
Overall Rankings 2012 2013
New Zealand 23rd 18th
Australia 20th 21st
NZ ranks highly in: ease of starting a business (1st)lack of bribes (1st)judicial independence (1st)
NZ ranks poorly in:mobile phone subscriptions (48th)availability of scientists and engineers (69th)cluster development (64th)
Northern Leading Ltd
State of Cluster DevelopmentWorld Rankings
Global Competitiveness Reports
Northern Leading Ltd
New Zealand 73rd
Australia 37th
Northern Leading Ltd 9
Northern Leading Ltd 10
What is Competitiveness?For a Region:1. firms are able to compete successfully in
the global economy 2. while supporting high and rising living standards
HBS US Competitiveness Project
Northern Leading Ltd 11
17 Essential Elements:• MACRO ELEMENTS
– Macroeconomic policy:– Effectiveness of the political system– Protection of physical and intellectual property rights and lack of corruption– Efficiency of legal framework– Complexity of the national tax code– K-12 education system:
• MICRO ELEMENTS– Logistics infrastructure:– Communications infrastructure:– High-quality universities– Context for entrepreneurship:– s with strong linkages to the private sector– Availability of skilled labor– Flexibility in hiring and firing of workers– Innovation infrastructure:– Appropriate regulations– Strength of clusters: – Quality of capital markets:– Sophistication of firm management and operations:
Building a more productive and competitive economy
Business Growth Agenda (BGA)
1. Building innovation2. Building export markets
grow exports from 30% to 40% of GDP by 2025.
3. Building safe and skilled workplaces4. Building infrastructure5. Building resources6. Building capital marketsPlus
Regional Economic Activity Report
Northern Leading Ltd
Developing Clusters requires:
1. Recognition in the BGA2. Central government to establish a
contestable fund for industries and regions to apply
3. A 5 year time horizon (review after 3?)4. Teaching in Universities
Northern Leading Ltd
Northern Leading Ltd 15
Conclusion
• Developing clusters will improve competitiveness• Global Competitiveness Report• HBS Project on US Competitiveness
• New Zealand is the “rock star” economy that is failing to develop its clusters.
• The BGA is necessary but not sufficient to solve our Productivity Paradox and improve CGR rankings to where they could be.
• “Cluster Development” needs to be put on the BGA• With a contestable fund to generate action.