Paul Wallbank – Brilliant Communications

Tag: economic development

Beer and 3D printing lead a Belgian town into the future
While many cities and states are fighting to subsidise declining businesses others are becoming hubs of future industries. The story of Leuven and 3D printing is one of the latter.

A great article and accompanying presentation from Reuters illustrates some of the possibilities with 3D printing technologies.

Most of the article revolves around the Belgian company Materialise whose CEO, Wilfried Vancraen, has been a pioneer in 3D printing.

An interesting upshot of Materialise’s development is how the company’s hometown, Leuven, is promoted by the firm as the ‘world capital of beer and 3D printing.’

Calling yourself the ‘World Capital of Beer’ is a big – and one suspects risky – call in Belgium so it’s not surprising that the town itself doesn’t use the tagline.

Being the world capital of 3D printing though does have some allure of Leuven being able to build itself into one of the world’s hub for the new technology.

Those hubs are a feature of every industrial revolution – whether it’s Silicon Valley and the manufacturing centres of South East China today or the English ironworking and cotton milling hubs of the 18th Century.

For governments looking at attracting job creating industries, instead of desperately trying to attract the old industries of the 20th Century it might be worthwhile to consider what the community has to offer the business leaders of this millennium.

Leuven may or may not become one of the world hubs of 3D printing, but at least the city has a chance – those bidding for car factories, movie productions or prisons are destined to decline even if their bids succeed.

Beer pouring image courtesy of dyet and sxc.hu

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March 11, 2013
New York celebrates its entrepreneurs with Made in NY
Part of a thriving industrial hub is having the business and skills that support the sector. If you’ve got them, you need to tell the world you’re open for business.

Somebody who is doing this well is New York City’s Office of Media and Entertainment which runs the Made In NY program.

While much of the focus of the program is on attracting film production, Made in NY recently branched out into promoting the city’s tech community boasting successful businesses like video sharing site Vimeo, tutor matching service Tutorspree and stock photography supplier Shutterstock.

Towards the end of the Shutterstock clip one of the staff mentions ‘drop bears’ – a little bit of Sydney argot creeps into the story.

It’s the Sydney connection that makes the Made In NY campaign so bittersweet, I was involved in setting up the Digital Sydney project for the New South Wales government.

While Sydney doesn’t have the size of New York’s or London’s tech industries it does share the advantage of being one of the most diverse cities in the world. The work of organisations like ICE in Parramatta is important in realising some of that potential.

That potential is huge – having sizeable communities of East and South Asian language speakers gives Sydney a real opportunity in the Asian Century.

Unfortunately most of those communities live in Sydney’s West and while lip service is given to the needs of that region most economic development work focuses on corporate welfare for established interests and supporting inner city stuff that white folks like.

When I started at what was then the Department of State and Regional Development in 2009 I was told that many in the agency believed NSW stood for “North Sydney to Wooloomoolloo”, something that largely turned out to be true. The west of Sydney, like most of the state, took second place behind the wants of big business.

This is what’s encouraging about the Made In New York campaign, it promotes smaller business – although they all seem based in lower Manhattan staffed largely by a middle class monoculture, which seems to be a problem when you buy into hipster chic.

Hipster chic is one of New York’s strengths and that’s what every city and country needs to be doing in a global connected economy.

If you can’t define and articulate what it is you add to the economy, then you’re locked into the low value, small margin commodity end of the marketplace and that is a tough place to be.

The question for all of us, on a personal and a national basis, is do we want to be price taking commodity producers or do we want to develop the high value, growth business of the 21st Century.

New York City has made its choice, we have to make ours.

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February 21, 2013
Going insane with government subsidies
Albert Einstein is said to have defined insanity as doing the same thing over and over again while expecting different results.

When it comes to funding the film industry it’s hard not to think that governments, and those who want a strong local film making communities, have all gone insane.

As discussed previously, the global producer incentive industry is a scam perpetuated by the major movie studios on gormless governments desperate for the glitz and glamour of having a Hollywood star or two come to town.

In Australia, governments are scratching around to raise change to attract a high profile Hollywood production once again – unsurprisingly to subsidise another remake of a fifty year old hit.

This is dressed up in the guise of helping build or maintain the local skill base or infrastructure. The water tank that’s expected to be used should the Aussies win the bid was built by the Queensland government in 2007 to attract aquatic themed movies, as the minister at the time said;

“As a result of having the water tank facility, the Government’s Pacific Film and Television Commission and Warner Roadshow Studios are currently in negotiations with a number of major studios requiring water tank facilities for their next major films.

“These projects under negotiation have an estimated value of $US370 million.”

Little of that money made it down under and the Gold Coast water tank stands largely unused as the Queensland and Federal governments failed to interest subsidy hungry movie producers.

When governments win those subsidised productions the local industry has brief sugar rush as providers struggle to find caterers, crew and extras required to film Superman XVIII or the fourth remake of Herbie The Love Bug. After a few months, the big producer folds their tent and moves on to the next city that spent millions attracting the studios’ favours.

Those involved in the big Hollywood production sadly go back to their day jobs and dreams of building careers in a vibrant local industry which has no chance of developing under the boom and bust cycle of major production attraction.

And so the cycle goes. At least today’s Sydney accountants can tell their kids how they once stood next to Keanu Reeves as an extra on The Matrix.

While Hollywood is the best organised at milking gullible governments, it isn’t just the film industry that pulls this scam off on taxpayers. If anything, the automobile manufacturers are probably the biggest beneficiary of government largess and produce more unloved bombs than the movie industry.

What’s particularly notable when governments announce huge licks of money for multinational corporations is just how small support is for the local industry in comparison.

A good example of this are the New South Wales film industry subsidies. The state’s Emerging Filmmakers Fund dispensed a grand $90,000 to local producers in 2012. This compares to the $6.6 million dollars spent by the state on attracting foreign productions.

Even that $6.6 million number has to be treated with caution as major productions can be subsidised from the state’s Investment Attraction Scheme – a $77 million slush fund put aside for attracting ‘footloose’ multinational business operations.

Generally payments from the IAS are ‘Commercial in Confidence’, or ‘Crooks in Collusion’ as some more cynical might put it, so it’s almost impossible for taxpayers to know how much has been lavished on attracting foreign businesses.

What is clear though is the government subsidies for foreign operators, not just in the film industry, dwarf the support given to local businesses.

During my short period working for the NSW Department of Trade and Investment more than one businessman asked me “why is your minister giving a slab of money to my overseas competitors rather than encouraging local businesses?”

It’s difficult to find a diplomatic answer that doesn’t imply that political and public service leaders are blinding the glamour and prestige of being associated with rich multinational corporations.

The real support local industries need is steady work producing products that play to their advantages, the sugar rushes of major movie productions or subsidised manufacturing only distort the market and may even damage the smaller local production companies as the wrong skillsets and infrastructure is built.

Done strategically as part of a broader, long term plan targeted subsidies to global industry leaders can work, but unfortunately few of the movie industry incentives or investment attraction schemes have that sort of thinking underlying them.

As budgets tighten with the deleveraging global economy, it’s going to be interesting to see how long governments can continue this sort of corporate welfare.

Film clapper image courtesy of Chrisgr through SXC.hu

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February 16, 2013
Building Africa’s multinationals
African business site CP-Africa has a profile on the continent’s youngest billionaire, 31 year old Ashish Thakkar, based on a recent interview with the Wharton Business School.

Ashish’s story is fascinating one, his family have been refugees twice – once from Uganda when Idi Amin expelled the Indian population and later in Rwanda – and each time his father rebuilt the family’s fortunes from scratch.

In setting up his own business at 15 with a $6,000 loan, Ashish surprised Dubai authorities who thought his age was a misprint. 16 years later Mara Group operates in real estate, tourism, manufacturing and IT services across 24 countries, the bulk of them in Africa.

The interview is an insight into how African economies are evolving and how the continent is just as diverse as the others – it’s as foolish to lump all African nations together as it is to consider all Asian or European countries as being the same.

An important point that jumps out of Ashish’s interview are his thoughts on attracting foreign investment;

We have a huge issue in Africa with unemployment. Unfortunately, a lot of our governments think the answer is foreign direct investment. It’s not.

This is one of the mistakes governments around the world make – it’s understandable as those big foreign corporations are impressive and rich, there’s also the kudos a politician or public servant gets from being seen as a great statesman consorting with global captains of industry, this is one of the attractions in the annual World Economic Forum meetings in Davos.

As Ashish points out, attracting big corporations is not the answer to building a thriving, modern economy. It requires the locals to take action, not just in the business sector but right across the community.

Waiting for a big corporation to come along to kick start your business community is just a cargo-cult mentality which rarely works.

That cargo cult mentality is alive and well in western nations, a good recent example was the campaign to get Twitter to open an Australian office in Melbourne.

Like Facebook, Twitter’s representation down under would be a government liaison staffer who would be best located in Canberra.

Campaigning for this only made Melbourne look like a bunch of provincial hicks, the city and state is capable of much better.

The sad thing is all our governments do this when squandering money subsidising multinationals to set up offices that were going to be set up anyway. Business books are full of betrayed cities like New London, Connecticut who gave away tens of millions only to see their great corporate saviour walk away a few years later.

It’s far better for government to spend those millions reforming business regulations and taxes to make it easy for local businesses to compete with multinationals and become the global leaders of tomorrow.

As one of the few parts of the world that isn’t facing the challenges of an aging population, Africa economies are in a good position to spawn a whole generation of entrepreneurs and corporations. It will be interesting to see if Ashish Thakkar is leading that generation.

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January 31, 2013
Proudly designed in Gyeonggi
“Designed by Apple in California ” is the boast on the box of every new iPad or Macbook. That the slogan says ‘designed’ rather than ‘made’ says everything about how manufacturing has fled the United States.

Last year the New York Times looked at Apple’s overseas manufacturing operations, pointing out that even if Apple wanted to make their product in the the US many of the necessary skills and infrastructure have been lost.

Now the US is facing the problem that Asian countries are looking at moving up the intellectual property food chain and doing their own designs.

In some ways this is expected as it’s exactly what Japan did with both the consumer electronics and car industries during the 1960s and 70s.

The big difference is that Japanese manufacturers travelled to the US and Europe to study the design and manufacturing methods of the world’s leading companies. In the 1990s and 2000s, the world’s leading companies gave their future competitors the skills through outsourcing and offshoring.

In the next decade we’ll see the latest consumer products coming with labels reading “Designed by Lenovo in Fujian” or “Developed by Samsung in Gyeonggi”.

For western countries, the question is what do we want to be proudly be putting our names to?

Image from Kristajo via SXC.HU

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January 12, 2013