STRATEGY FRAMEWORK

FOR
SUSTAINABLE ECONOMIC AND
INDUSTRY DEVELOPMENT

(AND FOR DETERMINING AND PRIORITISING THE
ROLE FOR GOVERNMENT)
Corporate Strategy and Policy
PIRSA, Govt. of South Australia
Notes
Overview
Outcome establishing industry growth targets
Strategy defining strategy for international competitiveness
PIRSA Program prioritising
PIRSA intervention
PIRSA Input recovering fair
costs for PIRSA interventions
Government Program determining the
appropriate contribution from Government
Notes
Outcome: Getting to Accelerated Wealth Generation
Inter relationship between
PIRSA outcomes
Organisational
Health and
Footprint
Outcome 5
Key enabler
Sustainable
Ecosystems
Outcome 2/3
Sustainable
Economic
Development
Cross Community/Govt agenda Prosperous
Regional
Communities
Outcome 4 PIRSA secondary focus
Economic
Growth
Outcome 1
PIRSA primary focus
with
industry
partners
Notes
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 growth
Regeneration
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
Notes
International
Competitiveness
Conditions for International Competitiveness
Porters Diamond
Firm Strategy,
Structure and Rivalry
Related and
Supporting Industries
Factor
Conditions
Demand
Conditions
Notes
STRATEGY: Getting to Sustainable
International Competitiveness
Porters Diamond
Factor
Conditions

(Resource Capacity)
Economic
development
enhancements
Productivity
development
enhancements
Industry strategy
and structure
Firm rivalry
and dynamism
Demand
Conditions
Firm and industry,
rivalry and structure
Related and
supporting
industries
Market access
development
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 discerning
domestic market
Leveraging domestic
characteristics into
exports
Consumer affairs
Access to
international
markets and market
intelligence
Integrate demand
chains
Assist companies
make informed
choices
Develop an
industry operating
environment
that encourages
investment 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 stronger
integration and
cost efficiencies
with operations of
complementary
industries
Development of
stronger ties
between
businesses
associated with
the value chain
Reduce transaction
costs between
industries
Cluster/network
formation
Market access
Notes
Sectors need to determine their own strategic positioning
Typical growth drivers within the industry lifecycle
TIME
GROWTH
Decline
Emerging
Resource
driven
Factor
Strategy and
Structure
Demand
Related
Industries
Growth
Innovation and
Investment
driven
Factor
Strategy and
Structure
Demand
Related
Industries
Mature
Stagnation
Strategy and
Structure
Demand
Related
Industries
Factor
Regeneration
Re-innovation
driven
Factor
Strategy and
Structure
Demand
Related
Industries
Notes
International
Competitiveness
Firm Strategy,
Structure and Rivalry
Related and
Supporting Industries
Factor
Conditions
Demand
Conditions
The Role Government and Chance Play in
building International Competitiveness
Government
intervention
Chance
Notes
Factor conditions
(Resource capacity)
Develop a ready
access to
knowledge, skillled
workforce, physical
resources, capital
and infrastructure
Demand
factors
Firm and industry,
rivalry and structure
Related and
supporting
industries
Maintain the
sustainable
integrity of the
natural and
social
environment
Develop a
discerning
domestic
market
Access to
international
markets and
market
intelligence
Develop an
industry operating
environment
that encourages
investment and
responsiveness to
markets
Develop a
business
culture that
encourages
entrepreneur-
ship,
collaboration
and innovation
Build stronger
integration and
cost efficiencies
with operations
of
complementary
industries
STRATEGIES
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C
T

M
A
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K
E
T

I
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R
V
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O
N


D
I
R
E
C
T

M
A
R
K
E
T

I
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R
V
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N



TYPES OF
GOVERNMENT
INTERVENTION
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
services
Natural resource-based
infrastructure project services
Portfolio program
management
services
Resource
regulation planning
services
Compliance services
Licensing services
Trade and
market
services
Research and
scientific
services
Data and information
products and services
Incident response
services
Natural resource-
based infrastructure
project services
Facilitation
and planning
services
Research and
scientific
services
Notes
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 for
private sector
Clear role for
private sector
Potential role
for PIRSA
Clear role
for PIRSA
Notes
PIRSA inputs: Getting to Fair cost Recovery
Recovering a fair
cost for PIRSA
programs
WHO CAPTURES THE BENEFIT
Combination
e.g. Industry &
Community
Public

e.g. Community
Private

e.g. Firms/individuals
EFFICIENCY
OF
CHARGING
Low
Medium
High
Identity
Attribution
Mechanism
Fully tax-payer
funded
Levy
Fees and
charges
Mix of
mechanisms
Notes
Participants Step
Outcome
State Government
policy orientation
PIRSA policy
questions
Analytical
tool
Strategy
Government
Programs
PIRSA
Programs
PIRSA
input
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 accelerated
wealth generation
Getting to sustainable
international
competitiveness
Getting to industry
self mobilisation
Getting to optimal
market 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
PIRSAs intervention?
What is a fair level of
cost recovery?
Lifecycle model
Industry scorecards
Monash model
Porter diamond
Customer research
SWOT/PEST analysis
Market failure assessments
Government directions
Accountability framework
Market failure analysis
Cost benefit analysis
Risk assessment
Program evaluation
Ministerial directions
Public/private benefit
analysis
Notes
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 Us: Location: 17
h
Floor, 25 Grenfell Street,ADELAIDE, South
Australia 5000.
Phone: 08 8226 0516 (Tim Mares)
E-Mail: tim.mares@sa.gov.au