Professional Documents
Culture Documents
I n v I t a t I o n t o C o m m e n t
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Australian Capital Territory, Canberra 2011 Produced by Publishing Services Publication No 11/1510 www.business.act.gov.au/consultation
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Contents
Invitation to Comment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 How to comment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Issues for consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Leveraging our unique competitive advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Encouraging investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Trade and export . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Growth sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Small business programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Access to information and advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Compliance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Tax Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Government procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Workforce development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Promoting Canberra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Our role in the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Consolidated discussion questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Invitation to Comment
The ACT Government recognises the need for a diverse ACT economy. A diverse economy provides for solid and stable employment and growth, provides opportunities for innovation and provides a buffer to weather more challenging times. Both government and industry have roles to play in achieving this - and those roles are complementary. Government must, through efficient markets, create an environment that supports growth. Industry must take advantage of that environment to drive innovation and achieve competitiveness. Our economic base lies in the service, research and knowledge industries which provide us with our skilled workforce and highly capable institutions. We must build on these solid foundations and focus our efforts to reinforce current comparative advantage, where critical mass and skills provide an ability to leverage industry partnerships. We must also use this sound base to seek out new areas of comparative advantage. We cannot stand still. We have to recognise our innate strengths and from that, what the likely trajectories will be. Business policy and programs may well amplify these directions, provide for more efficient markets and information flows, but they will not supplant our economic fundamentals. The Governments current approach is based on sound strategy and tested approaches developed through the 2003 Economic White Paper, the 2008 Innovation System Audit of the ACT; and the 2008 Capital Development: Toward our Second Century. This policy foundation has served us well and we will continue to do those things that are working well such as:
n n n n
Focusing on innovation strategy Supporting a commercialisation pathway Supporting ACT firms to export Continuing to invest in the liveability of Canberra to create an attractive, vibrant and well functioning city that draws talent and new investment
Recognising the vital role of small business in our economy we remain committed to strong fiscal management and ensuring a business friendly environment through strong policy settings and effective regulation. This discussion paper identifies some key issues for consideration. My invitation to you is to have your say on these issues and raise other ideas and views that you see as relevant to the ACT Governments role in building a robust local economy. The Government will not trade short-term returns for long-term prosperity. We wont be implementing expensive schemes to attract big business nor developing detailed sector plans across the board. We will be looking to the best, most sustainable ways to support private industry to help us all achieve the goal of a more diverse Canberra economy.
Treasurer
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
How to comment
In providing your comments you are encouraged to refer to the issues and questions that are raised below. While we have tried to capture some of the issues we hear and see, the list is not prescriptive. Given the diversity of the business sector in the ACT we fully expect to hear about other issues, and we look forward to those contributions. Please raise whatever you feel is important. This Paper is one way to order your response. The questions under each topic are designed to help focus your comments but dont necessarily need to be individually answered. It is also not necessary to comment on all the discussion topics, just the ones that you have a view on. Comments may be submitted in any form. An online form is available at www.business.act.gov.au/consultation. You can email your comments to business.mailbox@act.gov.au or post them to: Business Development Strategy - Consultation Business Development Economic Development Directorate GPO Box 158 Canberra ACT 2601 You are welcome to arrange a meeting with Business Development to discuss your views, ask questions, or simply provide verbal feedback. To make a time please phone the Business Hotline on 1800 244 650. The closing date for comments is Tuesday 14 February 2012. Please note that the information you provide may be subject to release under the Freedom of Information Act 1989 unless you clearly indicate that your comments should be treated as confidential. If you have any questions about the Paper or would like to receive a hard copy please phone the Business Hotline on 1800 244 650. The Paper can be accessed on line at www.business.act.gov.au/consultation.
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Introduction
The first major ACT Government policy on economic and industry development was the 2003 Economic White Paper (EWP). The development of the EWP involved significant research and consultation resulting in nearly 50 action items. The four key policy directions of the EWP were supporting business, a focus on competitive advantage, leveraging intellectual assets and providing supportive planning and infrastructure to private sector development. With many of the specific EWP actions completed by 2006, there was a refocusing of the business support framework in the 2006-07 Budget. Government resources for business and industry development were channelled into information and advisory services and generic program support. A more active partnering agenda with the business community on business development was also put in place. The ACTs current overarching economic development policy is laid out in Capital Development: Towards Our Second Century. Released in 2008, Capital Development is a high-level strategic framework that guides Government decision making. While the four key policy directions of the EWP are still visible in Capital Development it also reaffirmed the importance of prudent fiscal management, appropriate regulation, sustainable development and working with the region to increase economic benefit. Three new strategic themes were also introduced: 1. 2. 3. Investing in people to increase the capacity and flexibility of the economy; Encouraging innovation to help foster a more creative, competitive and dynamic business sector; and Building infrastructure and planning for the future to support and coordinate economic activity.
Capital Development: vision statement Ensuring that a strong, dynamic and resilient economy meets the needs of the Canberra community now and into the future; maintaining economic growth that promotes a fully sustainable city; and promoting the ACTs place as heart of the economic region.
Capital Development flagged the articulation of a separate business and industry strategy to further detail actions aimed at developing a stronger more innovative and globally competitive business sector. On 17 May 2011 the Chief Minister reconfirmed this commitment in her statement of 2011-12 ACT Government priorities. The Business Development Strategy will provide a link between the Governments high-level ACT strategic plans and indicators and the delivery of business programs. It will explain how we will continue to deliver on the Governments strategic priorities.
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
The development of the Business Strategy has begun with a series of industry focus groups. The issues raised by participants have been included throughout this discussion paper along with a range of questions relating to Capital Developments strategic themes and vision. The Government is seeking input at a number of levels from the broader community, from business groups, from unions, and directly from some of the major stakeholders to ensure that a diverse range of views are considered in the development of the Business Development Strategy.
Thick labour markets: people move around a lot and want a choice of employment opportunities; Diversity: people look for visible signs of diversity visual cues that a place is open to all and possess low entry barriers to human capital; and Quality of place: the buildings, the neighbourhoods, the physical design, the human energy and whats going on in terms of cafes, restaurants, music venues and active outdoor recreation.
Canberra, along with many other cities displays these characteristics. However there are competitive advantages that are unique to us. We know our unique competitive advantages lie in the following areas:
n n n n n n n
Our proximity to the purchasing power of the Australian Government; Our people, who are talented, creative, knowledge workers; Our large publicly funded research base; Our national institutions; Our world class learning institutions; Our business communitys enthusiasm and its innate external market focus; and Our city, its beauty, its lack of congestion, its unique facilities, its clean air and green spaces.
These competitive attributes have sustained and stimulated growth and development in many sectors. These include construction, property and business services, tourism, education and training and health. Information and communication technologies, including software development, have been major enablers in the development of all sectors of industry in Canberra. We stand to benefit further from these advantages. Have we captured all the elements of our unique position? How can we best leverage our competitive advantage? What quality of place factors are we lacking?
1. Richard Florida, 2003, Entrepreneurship, Creativity and Regional Economic Growth, in Hart, D M (Ed.) The Emergence of Entrepreneurship Policy: Governance, Start-ups, and Growth in the U.S. Knowledge Economy, Cambridge, Cambridge University Press.
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Innovation
Innovation sits at the heart of debates over economic growth, and encouraging an innovative economy is high on the wish-lists of many governments.2 The ACT Government is acutely aware that economies that innovate hold significant competitive advantage in the global market. We already have that advantage but as a community we can always do more. One area where innovation improvement is possible is business investment in research and development. While the Canberra region has the highest research expenditure intensity in Australia, most of it is in the public sector or institutions. Private sector research and development is significantly less. Businesses that invest in research and development will increase the flow of new products to the market, introduce more efficient processes and develop more effective ways of doing business. In this way it is expected that firms will become more productive, profitable and competitive and, in turn, generate higher levels of employment and economic growth.3 Investment in research and development by aCt businesses is low by both australian and international standards. What are the factors behind this and should we be concerned? Another area to develop is innovation leadership. Business innovation is not a linear process but one characterised by skill in collaborating and making connections so that knowledge flows and grows, and so becomes available to meet customer and community needs.4 Over the last five years the ACT Government has played a key role in building and connecting the parts of our innovation system and facilitating collaboration between those involved. But governments can only support these directions to a point. Is it time for the non-government players in the innovation system to take a more active role in direction setting? What might a leadership model look like? What does leadership of a regional innovation system, like the aCts, look like?
Encouraging investment
Knowledge of Canberra as an international business destination is increasing, both outside Canberra and also among the global corporations that already have some presence here. Foreign direct investment is often associated with high value jobs, more localised business R&D, the introduction of innovation to local companies that become part of the supply chain, and also new channels to export for local suppliers. To date the ACT Governments activities in this area have been largely reactive that is, responding in a case by case manner to approaches. The Government also has a policy of not providing investment subsidies and we have been part of an agreement with the other states to minimise the use
2. NESTA, 2009, The Innovation Index 3. Howard Partners, 2008, Innovation, Creativity and Leadership: Report of a Study of the ACT Innovation System, pg 11. 4. Cutler, 2008, Venturous Australia: Building Innovation Strength, pg x .
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
of incentives. Across Government we have most of the skills and expertise to support more proactive investment facilitation, but they have not been brought together in this way before. Is it time? What is the most appropriate role for the aCt Government in investment attraction? What sort of companies and activities should we be pursuing?
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Growth sectors
Raise the spectre of a sector approach to business development and the phrase picking winners tends to come to mind. The fact is most Australian governments and indeed some cities now employ a soft touch approach to developing capability where there is existing or emerging competitive advantage. This approach usually sees general access business programs (e.g., in export, small business, commercialisation, and so on) connected to these capabilities more deliberately, private sector leadership is encouraged and supported in the sectors to increase collaboration, land planning might support industry cluster formation and the co-location of companies and research capability, strategically aligned research might be funded by government in partner universities, and regional capability might be more promoted through vehicles such as trade missions. The contemporary iteration of sector development is perhaps best seen as an industry overlay to open access business programs that are otherwise well grounded in market failure rationale. What are the real and emerging wealth generating sectors in the territory? What initiatives will accelerate development and build emerging sector capacity?
1 0
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Compliance costs
The majority of businesses want to comply with reasonable government regulations. However of concern to many businesses is the cost of compliance and understanding how to comply. The impact of regulation and compliance on small business can be disproportionate due to their small size. Be very specific - what regulatory issues are a concern to your business now? are you able to cost the impact of the matter on your business? moving to the broad view, what are your observations about aCt Government regulations and the regulatory environment here in the aCt? are you seeing these issues at the Commonwealth level as well? What are they? How can we make compliance easier without diminishing important considerations (such as work safety and environmental sustainability)?
Tax Reform
The future of the ACTs tax system is currently the subject of the ACT Taxation Review. This review is considering whether there are ways of improving the current tax system and how the ACT Government collects revenue to provide important services. The community clearly understands that all governments must collect revenue through taxes, and that these tax settings should be as efficient and effective as possible. In the ACT we have the highest payroll tax-free threshold in Australia, but we also have the highest tax rate when payroll tax does cut in. Even though the ACTs tax settings provide a significant benefit to our small and micro business sectors, our arrangements are sometimes characterised as representing a barrier to business growth. If the ACT moved to a tax regime more in line with the eastern seaboard states, how would this play out in terms of making the ACT a tax competitive place to do business? If the aCt moved to a regime more in line with the eastern seaboard states, how would this play out in terms of making the aCt a tax competitive place to do business?
1 1
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Government procurement
A common theme emerging from discussions with small local ICT companies is the importance of reference sites, particularly from government customers, both local and federal. They argue that the risk averse nature of government procurement is hurting SMEs who often have better and cheaper solutions than the big end of town. However, as they say, no one got fired for buying IBM. Governments are custodians of public money and that is why procurement principles are very carefully applied - full, fair and reasonable opportunity, free of interstate preferences, competitive neutrality, value for money, transparency of process, policy consistency and consistency with Australias international obligations. The ACT Government is committed to these principles. Buying from smaller local firms can also involve higher levels of risk. Against this, small firms are nearly always more innovative and their growth can have significant flow-on benefits for the local community. australian Government procurement has arguably been the greatest driver of business development in the aCt. What else can or should be done? What is an appropriate role for the aCt Government? How do we balance competing objectives and get to a win-win outcome?
Infrastructure
Infrastructure is an important driver of economic and social prosperity in our community. High-quality infrastructure makes Canberra a great place to visit, study, live, work and do business. Transport, communication, service, hospital, education, recreation and cultural facilities provide for the health, learning and amenity of citizens. The ACT is facing many challenges including: housing affordability, climate change, skills shortages, and an ageing population. Expanded, reconfigured and new infrastructure plays an important role in addressing these challenges. The ACT Government is committed to developing and delivering high quality infrastructure and has established mature systems to facilitate strategic planning, investment and maintenance of the Territorys infrastructure. The second ACT Government Infrastructure Plan was released by the Chief Minister in July 2011. Building on the first infrastructure plan, it sets out the ACT Governments strategic infrastructure priorities from 2011-2021 and the primary drivers of infrastructure demand. Future plans will be developed by the Economic Development Directorate following transfer of responsibility from the Chief Minister to the Minister for Economic Development. Looking to the future what are the key infrastructure priorities that need to be planned today?
1 2
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Workforce development
The business environment is constantly changing, and ensuring that the knowledge and skills of workers keep pace with those changes is critical for continuing productivity. Having the right skills, in the right place, at the right time is a key challenge. The future of work, the changes in employment patterns, and what skills will be required, will be intimately related to the changes over the years ahead in our economy, our technology, our environment, and our demographics.6 Some emerging skill drivers for the ACT might include the development of a clean economy and leveraging the benefits of the National Broadband Network. In the past the public sector funded broad skills while industry developed specific skills. What is the role of industry in identifying and developing emerging skill requirements? What is the role of government? What is the correct responsibility balance between business and government? How do industry and government respectively contribute to the development of an adaptable and flexible workforce?
Promoting Canberra
Cities compete to attract investment, tourism, and population. They do this through marketing and promoting distinctivenessattributes that a city has that others do not. In the modern knowledge based economy, there is global competition to attract investment and people to build and sustain economic and industrial progress. In the global economy, cities - and businesses that are located within them - compete.7 There is an opportunity to develop a more progressive view and brand of Canberra that promotes the opportunities to visit, study, live, work and do business in the city. This would be a unified Canberra Brand that builds complementary local, national and international marketing messages. How would a Canberra Brand assist your business? What would be the look and feel of a Canberra Brand? What is the private sectors role in city branding and brand dissemination?
1 3
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Innovation
Investment in research and development by ACT businesses is low by both Australian and international standards. What are the factors behind this and should we be concerned? What does leadership of a regional innovation system like the ACTs look like?
Encouraging investment
What is the most appropriate role for the ACT Government in investment attraction? What sort of companies and activities should we be pursuing?
Growth sectors
What are the real and emerging wealth generating sectors in the Territory? What initiatives will accelerate development and build emerging sector capacity?
1 4
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
Compliance costs
Be very specific - what regulatory issues are a concern to your business now? Are you able to cost the impact of the matter on your business? Moving to the broad view, what are your observations about ACT Government regulations and the regulatory environment here in the ACT? Are you seeing these issues at the Commonwealth level as well? What are they? How can we make compliance easier without diminishing important considerations (such as work safety and environmental sustainability)?
Tax reform
If the ACT moved to a regime more in line with the eastern seaboard states, how would this play out in terms of making the ACT a tax competitive place to do business?
Government procurement
Australian Government procurement has arguably been the greatest driver of business development in the ACT. What else can or should be done? What is an appropriate role for the ACT Government? How do we balance competing objectives and get to the win-win outcome?
Infrastructure
Looking to the future what are the key infrastructure priorities that need to be planned today?
Workforce development
What is the role of industry in identifying and developing emerging skill requirements? What is the role of government? What is the correct responsibility balance between business and government? How do industry and government respectively contribute to the development of an adaptable and flexible workforce?
Promoting Canberra
How would a Canberra Brand assist your business? What would be the look and feel of a Canberra Brand? What is the private sectors role in city branding and brand dissemination?
1 5
B U S I N E S S D E V E L O P M E N T
I n v I t a t I o n t o C o m m e n t
1 6