Sharing value in regional Australia - The Good Oil by Rod Brown

Last month’s appointment of Darren Chester as the new Minister for Infrastructure and Regional Development caught some by surprise.

But it seems to be an inspired selection, especially given his track record in regional development. Darren is a proud Gippslander. He is the son of a plumber and grew up in Sale as one of five children. His political career follows in the footsteps of former National Party luminaries Peter Nixon and Peter McGauran. And, about a decade back he was the Executive Officer of the Champions of the Bush, a lobby group that was active on many fronts. He was also Chief of Staff to Peter Ryan, Nationals Leader in Victoria and he served two terms as President of the Lakes Entrance Business Tourism Association. This latter role will stand him in good stead given tourism is a pivotal part of regional Australia’s future. Hopefully he will nag his colleagues into taking some interest in tourism and support junior Minister Colbeck who is responsible for tourism and international education.  

Importantly, Chester is a progressive bloke – he was one of the first National MP at the federal level to publicly endorse same-sex marriage. He is also a proponent of a “two-tiered political system, perhaps a regional and a federal government, in the interests of a more cohesive and united Australia”. Good luck Darren, this is as likely as the High Speed Rail.

Warren Truss
The outgoing Minister for Infrastructure and Regional Development, Warren Truss, deserves mention as a genuinely good bloke and a very good Minister.  The word around the traps is that he is facilitative and supportive of people and their ideas. Although he hails from Wide Bay Burnett, he reminds me of one of those old-fashioned Aussie Rules full-backs up in the Wimmera or Mallee – tough as teak but fair, standing with his hand shading his brow, chewing on a piece of PK, watching the play downfield until it’s his turn to repel an opposition attack.  

My admiration for Truss grew when the Commission of Inquiry (Tony Shepherd et al) was in full flight, recommending the immediate closure of the 55 Regional Development Committees in order to save money. Well it didn’t happen because he used his Deputy PM’s prerogative and told the Department of Finance to nick off. Mind you, the Regional Development Australia (RDA) Committees aren’t well resourced which brings me to my next point…

Collaboration and Shared Value
Dr. Mark Cloney of Latrobe Business School has penned some thoughts about many leading theorists having written on the importance of innovation and regional development to the international competiveness of firms and nations. He cites the argument put by Harvard business gurus Michael Porter and Mark Kramer (2011) for the importance of creating shared value, which focuses on the connections between societal and economic progress including enabling industry clusters. Mark says what they say is consistent with the Innovation Statement objectives.

According to Porter & Kramer policies, the next wave of global growth will be the result of collaboration and operation practice that enhance competiveness of a company while simultaneously advancing the economic and social conditions in the communities in which they operate. They cite firms such as Google, IBM, Intel, Johnson and Johnson, Nestle, Unilever and Wal-Mart as examples of companies that have embarked on shared value initiatives within the communities where they operate. The thesis is that the success of every business is affected by the supporting companies, and soft and hard infrastructure around it, and the networks within which they operate, i.e. the microeconomic foundations. Therefore stronger local capabilities in education and training, Research & Development, transport services and logistics, supplier collaboration, distribution channels and infrastructure are key to increased competitiveness and innovation.

Cloney goes on to suggest that closer collaboration in the above fields could form a new approach to regional development policy. It would be premised on creating shared value and the building of trust at the local level over a sustained period.

I also figure that if consistent, ethical and transparent behaviour can be instilled in the relevant stakeholders, then politicians would follow the needs of communities, rather than having ill-designed or inflexible programs foisted on them.

The RDA Committees are well-placed to pursue shared value because they have the structure to marshal the local stakeholders, especially the local councils. The next steps would be to then (a) inject themselves into federal policy agendas and (b) lobby for the RDA machinery to be a permanent feature of the federal system with improved funding.  

The incoming Nationals’ leadership of Barnaby Joyce, Darren Chester, Fiona Nash and Michael McCormack might be your champions for this approach if they understand that the RDA Committees would provide objective analysis and the shared commitment and trust to deliver better outcomes for regional Australia. Importantly, this role for the RDA Committees would be apolitical – it would be up to the Nats, Liberals or Labor to develop their policies around the objective base.
Such an approach is sorely needed because the regional lobby is weak. Contrast it with the defence lobby, which has quietly secured $190 billion for a dozen submarines! Similarly the housing industry lobby (HIA, MBA, building unions, ALP) has collaborated to water down changes to negative gearing to maintain the housing boom. That, my friends, is power – and it is based around collaboration as espoused by Dr. Cloney. It would be a nice legacy for the efforts of Warren Truss.

PS – google ‘Phil Preston Shared Value’ to learn more.

Rod Brown is a Canberra-based consultant and lobbyist specialising in industry/regional development, investment attraction and clusters, and accessing federal grants. He also runs the Cockatoo Network.
Phone: (02) 6231 7261 or 0412 922 559
Email: apdcockatoo@iprimus.com.au
Blog: www.investmentinnovation.wordpress.com (750+ articles)