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Success Factors for New and Emerging Industries

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  1. Success Factors for New and Emerging Industries Dr Roslyn Prinsley General Manager New Rural Industries

  2. The history of Australian agriculture is a history of new and emerging industries

  3. Outline • What is a new and emerging industry? • Why new and emerging industries? • Success factors for new and emerging industries

  4. What is a new and emerging industry? • Present in Australia - now an organised industry • Goat milk, olives • New to Australian production • Alpaca, wasabi • Indigenous to Australia - unfamiliar to market • Crocodiles, native foods

  5. Why new industries? Pressure on Australian agriculture to diversify • declining terms of trade • increasing competition • water reform • climate change

  6. Why new industries? New industries offer Australia • increased grower profitability • sustainable production alternatives • resilient farming systems • protection of genetic resource through farming • sustaining rural communities • value added products • regional ‘eco’ style tourism (eg coffee, crocodiles)

  7. Why new industries? Importance of new rural industries • Multiple enterprises = 70% of ag GVP • Increasing as a % of total agricultural GVP

  8. ‘Other’ industries as a % of total agricultural GVP • 16% in 1960 (Ag GVP $2.7 bil.) • 29% in 2005 (Ag GVP $35.6 bil.)

  9. Exports • 1970 - products other than grains, sugar, meat and wool made up only 17 per cent of exports • 2007-08 “other industries” nearly 50 per cent

  10. However New industries are • long-term • high risk • market failure Some will be a • local/regional success eg coffee • national success eg canola • failure

  11. Which ones will succeed? Picking winners is difficult. Need diversity • resilience - climate change, market volatility • plan for failure Need a range to suit different • regions • farming systems and types • farmer skills and capability

  12. Success factors for new industries • customers and marketing • competitive advantage • capability to consistently deliver quality • well functioning supply chain • effective leadership and strategic planning • business proficiency and access to sufficient capital • well-planned, well-managed, adequately funded research and development

  13. Think strategically and set goals • strategic planning framework /SWOT • prioritise investment decisions • true purpose for starting a new rural industry • criteria for success • expectations about how long it will take

  14. Research the market • Domestic or export? • Size? Growth rate? • Factors driving market trends? • Market segments? • Competitors? • Competitive advantage? • Customers? • Access to market information?

  15. Develop marketing strategy • Understand value proposition • Position in market / differentiate • Determine strategic price point • Identify supply chain partners • Decide how to promote • Consider collective marketing approaches

  16. Supply chains and value adding • Product to market - how? • Partners in supply chain? • Cost advantages? • More sales at lower prices, or improving quality for more sales at same price?

  17. Overcome production challenges • Optimise yields to achieve profitability? • Evaluate germplasm? • Market requirements for quality? • Prioritise production challenges? • Who can help? • Focus research on commercial outcomes.

  18. Manage research and development • R&D plan • Meet production, processing, marketing challenges • Prioritise on profitability • Where to access skills to solve problems? • Source required funds? • Communicate research outcomes to industry.

  19. Organise your new industry • Include members of supply chain in industry association • Seek natural leader to chair • Ensure broad range of skills and industry viewpoints on Board • Seek professional advice for structure/funding of representative organisation

  20. Establish effective communication and support structures • Honest communications strategy - inform all stakeholders • Counsel new entrants • Keep industry website up to date • Offer opportunities to engage industry members in development activities

  21. Develop quality standards and codes of practice • Uniform product description, labelling and product quality standard • Industry code of practice • Disseminated standards and code of practice across the industry

  22. Case studies • Olives • Crocodiles • Native foods • Different stages of development