Supporting Industry Promotion Policies in APEC – Case Study on Australia APEC Policy Support Unit May 2017 Prepared by: Dr Lyndal Thorburn BSc (Hons) Grad Dip Ed Grad Dip Legal Studies PhD Principal Associate, Sustineo Pty Ltd 27 Torrens St BRADDON ACT 2602 Australia Produced for: Asia-Pacific Economic Cooperation Policy Support Unit Asia-Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 6891-9600 Fax: (65) 6891-9690 Email: [email protected] Website: www.apec.org Asia-Pacific Economic Cooperation Committee on Trade and Investment APEC#217-SE-01.13 This work is licensed under the Creative Commons Attribution- NonCommercial-ShareAlike 3.0 Singapore License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/sg/. The views expressed in this paper are those of the authors and do not necessarily represent those of the APEC Member Economies. 2 TABLE OF CONTENTS EXECUTIVE SUMMARY ...................................................................................................................... 7 1. INTRODUCTION ........................................................................................................................... 10 2. METHODOLOGY ......................................................................................................................... 11 3. DEFINING MANUFACTURING AND SUPPORTING INDUSTRIES ................................... 12 DEFINING AND MEASURING MANUFACTURING ......................................................... 12 Supply chains and supporting industries ............................................................................. 13 MANUFACTURING IN SOUTH AUSTRALIA .................................................................... 14 Overarching factors ............................................................................................................. 14 FOOD AND BEVERAGES MANUFACTURING ................................................................. 14 TRANSPORT EQUIPMENT MANUFACTURING ............................................................... 16 Transport equipment ............................................................................................................ 17 Machinery ............................................................................................................................ 19 Fabricated metals ................................................................................................................. 20 4. POLICY FRAMEWORK .............................................................................................................. 23 NATIONAL POLICY FRAMEWORK ................................................................................... 23 General policy approach ...................................................................................................... 23 National policy trends .......................................................................................................... 24 Supply side programs .......................................................................................................... 26 Demand side programs ........................................................................................................ 27 Clustering programs ............................................................................................................ 28 SOUTH AUSTRALIAN POLICY FRAMEWORK ................................................................ 28 General policy approach ...................................................................................................... 28 State programs ..................................................................................................................... 29 Business environment .......................................................................................................... 31 Supply side programs .......................................................................................................... 32 Demand side programs ........................................................................................................ 33 Clustering programs ............................................................................................................ 33 5. FOCUS OF GOVERNMENT PROGRAMS ON SUPPORTING INDUSTRIES IN FOOD AND TRANSPORT EQUIPMENT ....................................................................................................... 34 FOOD MANUFACTURING ................................................................................................... 34 TRANSPORT EQUIPMENT MANUFACTURING ............................................................... 35 COMPARING NATIONAL AND STATE POLICY APPROACHES ................................... 35 Common themes .................................................................................................................. 36 State and National Differences ............................................................................................ 36 Gaps ..................................................................................................................................... 37 RESPONDING TO TECHNICAL CHANGE ......................................................................... 38 Common themes .................................................................................................................. 38 State and National Differences ............................................................................................ 38 Gaps ..................................................................................................................................... 39 OVERALL IMPACT OF SA PROGRAMS ............................................................................ 39 6. CONCLUSIONS ............................................................................................................................. 40 WHERE TO NEXT? ................................................................................................................ 40 Good practice....................................................................................................................... 41 Areas for potential improvement ......................................................................................... 41 7. ANNEX 1 – INTERVIEW FRAMEWORK ................................................................................. 42 8. ANNEX 2 – INTERVIEWEES ...................................................................................................... 44 9. ANNEX 3 –NATIONAL MANUFACTURING PROGRAMS ................................................... 45 BUSINESS ENVIRONMENT ................................................................................................. 45 SUPPLY SIDE PROGRAMS ................................................................................................... 45 R&D linkage programs ........................................................................................................ 45 3 Business capacity building – equipment/ new customers.................................................... 46 Business capacity – skills .................................................................................................... 48 International market access ................................................................................................. 49 DEMAND SIDE PROGRAMS ................................................................................................ 49 REGIONAL NETWORKS ....................................................................................................... 50 10. ANNEX 4 – SA MANUFACTURING SUPPORT PROGRAMS ............................................... 51 BUSINESS ENVIRONMENT ................................................................................................. 51 SUPPLY SIDE PROGRAMS ................................................................................................... 52 R&D linkage programs ........................................................................................................ 52 Business capacity building – equipment/new customers..................................................... 57 Business capacity building – skills ...................................................................................... 61 DEMAND SIDE PROGRAMS ................................................................................................ 61 Government as customer – Small Business Innovation Research ....................................... 61 Other customers ................................................................................................................... 61 REGIONAL NETWORKS ....................................................................................................... 62 11. ANNEX 5 – ALIGNMENT OF MANUFACTURING WORKS PROGRAMS WITH GOVERNMENT OBJECTIVES ........................................................................................................... 63 4 FIGURES Figure 1: Model of manufacturing and supporting industries ................................................. 13 Figure 2: Significant supporting industries for food and wine production .............................. 15 Figure 3: Major customer sectors for food products ................................................................ 16 Figure 4: Significant supporting industries for transport vehicle manufacture ....................... 17 Figure 5: Major customer sectors for transport