Success Factors for New and Emerging Industries

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

• RD 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