Transcript Associate Professor Val Lindsay, Victoria University of Wellington

A SECTORAL APPROACH TO
TRADE PROMOTION
AANZFTA BUSINESS SEMINAR
Dr Val Lindsay
Victoria University of Wellington
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Outline of Presentation
• What is meant by a sectoral approach?
• Why a sectoral approach?
• Benefits of a sectoral approach
• Sector Mapping - how does it work?
• Cross-border sector collaboration
• Conclusions
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Defining a Sector
• A group of companies that represent similar or
related product or service offerings
• May consist of a number of related industries
• Includes: food and beverage, tourism, education,
advanced manufacturing, aviation – and many
others
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What is meant by a Sectoral approach
• An approach to a market opportunity that
draws on a collection (package) of products
and services offered by firms in the sector
• (Generally) involves collaboration between
members of the sector
4
Benefits of Collaboration for Individual
Firms and the Sector as a Whole
FIRMS
SECTOR
Information sharing: access to more
information
Specialisation – allows focus and
innovation in specific areas
Cost savings for market entry
Customisation – enables the ‘sector’ to be
responsive to specific customer needs
Easier market access: customers
recognise ‘larger’ supplier
Sharing of resources: for many
business activities (e.g. distribution,
marketing)
Higher innovation potential:
combining ideas and technologies
Scale – allows large (or small) volumes to
be produced
Flexibility – products and services can be
added or subtracted, or
combined/recombined, according to
customer needs
Integration – ‘packaging’ of technologies
and IP to provide new and innovative
offerings and ‘integrated solutions’
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Overall Benefits
• Through collaboration in the sector, companies
gain access to business opportunities that they
might not gain alone
• By working with a sector group of companies,
customers have most, or all, of their
requirements met. AND they may gain access to
‘integrated solutions’ or ‘packages’ of products
and services that offer particular advantages to
them relative to their competitors.
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Why Consider a Sectoral Approach?
Evidence and potential in New Zealand
• “We felt that there was great potential in India for airports and
hospitals but these were two sectors we had never done any work
in, nothing at all. And we were not going to get a job even with our
ten years experience in India, because Indians want experience in
airports and hospitals. So we partnered up informally with a
company in New Zealand who has specialized in hospitals and
airports.” (NZ manager)
• “China is a very, very difficult market and we would much rather
learn with other New Zealand companies and share and pool our
learning. And if we can go into those markets with collaborative
activities, we think that’s going to be a smart way of learning much quicker than we normally do.” (NZ manager)
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Why Consider a Sectoral Approach?
Businesses and customers in overseas markets suggest this approach for NZ
firms
•
“... if there is some specific focus for a sector - that will be a better way to
present New Zealand than making it good at everything. Let’s face it, not
every country is good at everything; it has its own competency and its own
competitive advantage.” (Chinese manager)
•
“First we do business with [XXX NZ firm] because of their technology and
their equipment in the industry. But we also consider that we could
use [XXX NZ firm] as a platform to engage with the New Zealand industry,
so we could learn more from other people. So this a platform for us to have
this opportunity to discuss with New Zealand counterparts.” (Chinese
manager)
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A Sectoral Approach Requires
Collaboration
• “I mean, you’ve got a billion people who will consume the products, and
that’s a very, very large market. So my point is that we’ve got to look at
and identify collaborative areas - look at the sectors with opportunities for
collaboration.” (NZ manager)
• “You could collaborate if there are big projects - you could come in
consortiums, because you have a great strength.” (Indian manager)
• “Food, wine, meat, seafood. They have are our biggest competitors coming
into here. We need to cooperate back at home to compete with others in
China - you can create a demand up here if you do it together.” (NZ
manager in China)
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A Sectoral Approach: How Does it Work?
• Market-driven approach to sector development
• Involves researching and mapping the sector
opportunity in the market and matching suppliers
• Example: An aviation park development, comprising,
for example:
–
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–
–
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Airport buildings
Aircraft
Runways
Pilots and crew
Air traffic control
Security
Many others
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Sector Mapping: Six Steps
STEPS 1 - 3
IDENTIFY AND MAP THE
OPPORTUNITY
IN THE MARKET
STEP 4
IDENTIFY AND MAP
SUPPLIER COMPANIES
(SECTOR)
IN THE HOME COUNTRY
STEP 5
COLLABORATION AMONG
COMPANIES WITHIN THE
SECTOR
STEP 6
CROSS-BORDER
COLLABORATION WITHIN
THE SECTOR
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SECTOR MAPPING: STEP 1
IDENTIFY THE OPPORTUNITY - IN THE MARKET
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SECTOR MAPPING: STEP 2
MAP THE INDUSTRIES (AND INSTITUTIONS) INVOLVED - IN THE MARKET
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SECTOR MAPPING: STEP 3
MAP THE SUPPLY CHAIN ACTIVITIES FOR THE INDUSTRIES INVOLVED – IN THE
MARKET
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SECTOR MAPPING: STEP 4
IDENTIFY AND MAP COMPANIES (IN THE HOME COUNTRY) ABLE TO DELIVER
THE SUPPLY CHAIN REQUIREMENTS
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SECTOR MAPPING: STEP 5
COLLABORATE TO PROVIDE INTEGRATED SOLUTIONS:
SUPPLY CHAIN LEVEL
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SECTOR MAPPING: STEP 5
COLLABORATE TO PROVIDE INTEGRATED SOLUTION:
INDUSTRY LEVEL
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SECTOR MAPPING: STEP 5
COLLABORATE TO PROVIDE INTEGRATED SOLUTION:
SECTOR LEVEL
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SECTOR MAPPING: STEP 6
CROSS-BORDER COLLABORATION
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Sector Mapping
• Step 1: Identify the opportunity in the market (e.g. aviation
development)
• Step 2: Map the industries (and institutions) involved in the
opportunity
• Step 3: Map the supply chain activities involved in each of the
industries
• Step 4: Identify and map companies in the home country able
to deliver the supply chain requirements
• Step 5: Collaboration of these companies to provide an
integrated approach to supplying these customer
requirements – supply chain level; industry-level; sector-level
• Step 6: Seek cross-border collaboration to provide better
solution
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Aviation Sector – an example of a substantial
opportunity
• “You’re going to see Mumbai airport coming,
a new greenfield airport; three greenfield
airports were commissioned this year, three.
Which, collectively, would mean almost $7 or
$8 billion of investment. Imagine the kind of
work that those three airports require. They
require consultants; they require safety
experts. They require master planning. The
airlines require pilots to be trained. So it’s a
huge market.” (Indian manager)
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SECTOR MAPPING:
A NEW ZEALAND AVIATION SECTOR EXAMPLE
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Opportunities for Cross-border Sectoral
Collaboration within the AANZFTA
• Joint research and development
• Collaborative product / market developments
• Collaborating within supply chains to deliver
sectoral-based solutions to member markets
• Leveraging of opportunities for joint access to other
markets, e.g.
– Collaborating within supply chains to deliver sectoralbased solutions to other markets
– Access to other markets via member networks (e.g. to
India and China via Singapore networks)
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Conclusions
• A sectoral approach developed from the market
opportunities allows for relevant and creative
sectoral development in NZ
• Within-country and cross-border collaboration
among firms in the sector allows them to
collectively respond to market opportunities
• A sectoral approach provides a vehicle to unlock
the potential for firms in NZ and AANZFTA more
generally to enhance trade and build collective
capabilities.
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THANK YOU
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