Australia's wine industry, which has over the past 15 years been transformed from a domestic bulk producer to a high-quality exporter, owes its competitive success to how well it has worked together as an industry.

A new study, "Australia's Wine Industry: Collaboration and Learning as Causes of Competitive Success", by Professor Ian Marsh of the Australian Graduate School of Management, explores this paradox of how industry collaboration has bred global competitive success.

Professor Marsh says collaboration in the wine industry helped to frame new strategies and possibilities for export and for innovation. Connections between firms, researchers, marketing bodies and other institutions incubated new economic learning. This cuts across the current approach to policy, which stresses the importance of domestic competitive conditions and firms as lone economic actors.

The study was commissioned by the Australian Business Foundation, an independent, private sector think-tank. Its mission is to strengthen Australian enterprise through research and policy innovation. The Foundation was founded and sponsored by Australian Business Limited (ABL).

Australian Business Foundation Chief Executive, Narelle Kennedy, says the wine industry provides a classic case of the shift from domestic commodity products to premium global brands.

"And all based on the ability to marry intense competitive rivalries with robust and aggressive collaboration across the industry and its various suppliers and stakeholders," she said.

Professor Marsh's study credits much of the wine industry's performance to the sharing of ideas and risks through various industry champions, institutional arrangements, industry organisations and collaborative planning mechanisms, such as Strategy 2025. This was the keystone of the wine industry's collaboration through the setting of an export objective and a growth target and identifying the actions necessary to realise the outcomes.

In the mid-1980s, Australia exported 2% of total production and was a net importer of wine. Since then exports have grown to 32% of total production. Australia produces only 2% of the world's wine, but it holds 2.4% of the world market by volume and 3.5% by value.

Ms Kennedy says a crucial reflection from the study is that the process of collaboration is not orderly, orchestrated, centralised or sequential. Collaboration is a more chaotic product of visionary leaders, responsive and capable firms, practical programs, negotiated agreements and government regulations.

The industry-wide linkages gave a shared frame of reference, so that individual firms could recognise and take advantage of a strategic opportunity when it came along.

"There is a lesson here, not merely for other Australian enterprises to adapt and achieve similar success. But for Australia to use strategic collaboration to overcome its disadvantages of being a small, distant marketplace receiving little attention from world capital markets and investors," she said.

"In this way Australian firms can take advantage of their smallness and flexibility on the one hand, and to leverage into global markets on the other."

Federal Industry, Science and Resources Minister, Senator Nick Minchin, launches the new report on Wednesday, August 23 at 11am at the South Australian Wine Centre in Adelaide

For more information contact:
Narelle Kennedy, Australian Business Foundation,
ph: 02 99277438
mobile: 0418 286 995

Professor Ian Marsh, AGSM,
ph: (02) 9931 9202