Traditional Industries and Regional Knowledge
Systems: the case of OneSteel
M. Cristina Martinez–Fernandez and Merete Bjørkli
AEGIS is a Research Centre of the University of Western Sydney.
Level 11, 263 Clarence Street
Sydney NSW 2000
PO Box Q1287
QVB Post Office
NSW 1230
Phone: (02) 8255 6200
Fax: (02) 8255 6222
Email: aegis@uws.edu.au
Web: www.aegis.uws.edu.au
EXECUTIVE SUMMARY
•
This study analyses the knowledge flow and the interaction of a traditional industry firm
(OneSteel) with the regional knowledge systems in the Hunter region of NSW and the
Greater Western Sydney region.
•
We chose the steel industry as the basis of our analysis because it is a traditional
industry with an extended tradition in Australia and because it has only three operators
(OneSteel, Smorgon, and BHP limited). The three companies are large organizations
both in terms of the number of employees and turnover. We concentrated on OneSteel
because it has an innovative focus of integrating old separate BHP operations under the
same strategic vision for the company. Although this study cannot make claims for the
whole steel industry in Australia, the findings might be very relevant for the other two
operators.
•
To complete the analysis we took a three-step approach; to map the knowledge systems
in the Hunter and in Western Sydney; to analyse the knowledge flows in OneSteel; to
analyse interactions/collaborations of OneSteel with their knowledge systems.
•
The Hunter region has a regional network composed of 36 organisations and the
Western Sydney region has 24 organisations. At the level of knowledge
institutions/organisations, in Western Sydney there are 6 UWS campuses, 3 TAFE
institutes with several campuses, 4 teaching hospitals, 1 airport and 20 research
companies. In the Hunter there is 1 CSIRO, 1 university, 3 teaching hospital, 1 airport
and 11 research companies. Although universities are generating and transmitting
knowledge in the field of engineering there is no available information on the ‘transfer’
of knowledge with industry.
•
Our analysis of knowledge flows shows that most knowledge is developed in-house and
there are limited links with RTOs in spite of the specialised engineering techniques used
in the market mills operations.
•
The mapping of interactions/collaborations with other knowledge organizations suggests
again that the links are very limited; only two in Greater Western Sydney and seven in
the Hunter. The links appear to be of higher frequency in the distribution business unit
of OneSteel, the most service-like, client-oriented part of the company.
•
The findings of this study apply to both firm strategy and regional policy makers as
innovation in firms and regions cannot occur in isolation but as part of the local/regional
knowledge system. Increasing the interaction with other knowledge organisations will
strengthen regional learning and increase capability for innovation.
C. Martinez and M.Bjørkli
2
ACKNOWLEDGEMENTS
We thank Kate Davison of AEGIS for providing some of the maps included in this report.
Many thanks also to Jenny Turner for editing the report.
We are most grateful to OneSteel employees for their dedication and time given during the
course of this research.
C. Martinez and M.Bjørkli
3
TABLE OF CONTENTS
Executive summary
Acknowledgements
1. Introduction ............................................................................................................................. 5
2. The Steel Industry in Australia: OneSteel ............................................................................ 6
2.1 Background ..................................................................................................................... 6
2.2 OneSteel .......................................................................................................................... 9
3. Regional knowledge Systems in the Hunter and the Greater Western Sydney regions . 11
4. OneSteel Knowledge Flows .................................................................................................. 25
5. Conclusions ............................................................................................................................ 30
References .................................................................................................................................. 32
LIST OF FIGURES
Figure 1: Australian Steel Mills .................................................................................................... 6
Figure 2: Employment in Basic Iron and Steel Manufacturing .................................................... 8
Figure 3: Map of Greater Western Sydney and it’s Knowledge Institutions .............................. 14
Figure 4: Map of Hunter Valley and it’s Knowledge Institutions............................................... 17
Figure 5: TAFE Enrolments in Greater Western Sydney ........................................................... 20
Figure 6: TAFE Enrolments in the Hunter Region in 200, 2001 and 2003. ............................... 21
Figure 7: Students Enrolled in Universities by Institution in the Hunter Region and Greater
Western Sydney in 2001 ..................................................................................................... 21
Figure 8: All Students by Institution in the Hunter Region and Greater Western Sydney and
Broad Field of Education, 2001 .......................................................................................... 22
Figure 9: Engineering and Related Technologies ....................................................................... 22
Figure 10: Expenditure on R&D by Institution and Broad Field of Study, 2000 ....................... 23
Figure 11: Research Expenditure by Universities in NSW in 2000............................................ 24
Figure 12: Expenditure by Higher Education Sector and Industry on Research and Development
by Type of Activity, 2000-2001.......................................................................................... 24
LIST OF TABLES
Table 1: Industry Classes Related to the Australian Steel Industry, 2000-2001........................... 7
Table 2: Sales Revenue in the tree Steel Companies .................................................................... 8
Table 3: Regional organisations in Greater Western Sydney ..................................................... 15
Table 4: Regional Organisations in the Hunter Region .............................................................. 18
Table 5: OneSteel Knowledge Flow (2003)................................................................................ 28
C. Martinez and M.Bjørkli
4
1. Introduction
This paper focuses on understanding the role and effects of territorial innovation systems in
knowledge creation, sharing and use by a traditional Australian Industry in the regions of
Greater Western Sydney and the Hunter region. Specifically the project looks at the innovation
strategies developed by OneSteel facilities in Rooty Hill and Newcastle, and the role of
knowledge sharing and transfer by OneSteel in these two regions.
There have been two major approaches to industry innovation both at the national and regional
level. One approach takes the view that clusters and networks are the way to build new
industries and/or transform activities in the region. The other focuses more explicitly on the
transformation of old industries. Recent work suggests that a parallel important approach to
relying on the establishment of new industries as the only way forward is to encourage radical
innovation in existing and even low-tech sectors (Smith, 200; Maskell & Malberg, 1999;
Audretsch & Feldman, 1996; Breschi & Lissoni, 2001; Capello, 1991). The positive role played
by universities in assisting such transformation seems to be related to their geographical
proximity with the firms in question (Breschi & Lissoni, 2001). As Maskell & Malberg
(1999:181) have pointed out, knowledge creation is embedded in a region’s distinct
institutional endowment, so a firm’s competitiveness is not isolated from regional capabilities
in terms of knowledge creation. This paper explores the effects of these territorial systems on
the knowledge and innovation processes of industries traditionally regarded as low-knowledge
intensive, in this case the steel industry. The two regions chosen, The Hunter and Greater
Western Sydney, both have a regional university, TAFE and other knowledge institutions from
where transfer of innovation can be analysed as a potential core element of their territorial
innovation system.
Major manufacturing regions in industrial countries experienced crises during the 1970s (Zook,
1997) largely caused by technological innovation and the globalisation of markets and
distribution systems as well as the oil crisis. These industries nonetheless remain critical to the
economic development of most OECD countries, including Australia (OECD, 1993, 1996,
1997, 1999). All these countries are seeking to renew the traditional industries dominant in
many regions. More specifically, they are seeking to assist their transformation through the
creation and use of new knowledge.
The significance of this type of study lies in improving the theoretical and policy related
understanding of the role of regional systems in specific knowledge creation and use by
traditional industries. Old industries territories are often regarded as part of the new knowledge
economy and this paper looks into the regional system where the traditional firm is embedded
to identity the intersecting factors affecting the creation and use of knowledge for and within
the firm. Although no claims can be made outside the contours of the case study and related
regions, the study might be representative of the Australian steel industry as there are only three
steel companies in Australia.
This paper discusses the elements contributing to the creation and use of knowledge within
OneSteel in the Hunter and Greater Western Sydney regions; how knowledge institutions in
those regions facilitate innovation in OneSteel; and the strength of the linkages between
OneSteel and the different organisations in the Hunter and Greater Western Sydney.
C. Martinez and M.Bjørkli
5
This paper is structured in five sections; the first provides introductory comments, the second
gives an overview of the steel industry in Australia and the position of OneSteel in this
industry. The third discusses the regional knowledge systems in the Hunter region and in the
Greater Western Sydney region. Section four concentrates on the knowledge interactions of
OneSteel in the Hunter and Greater Western Sydney regions and section five offers concluding
remarks.
2. The Steel Industry in Australia: OneSteel
2.1 Background
The Australian steel industry has, during the last few years, undergone restructuring and
rationalization to reduce cost and improve efficiency. Today the industry is seen as modern and
competitive and receives no government subsidies. This has been achieved by closure of less
competitive branches such as the loss making Newcastle steel mill in 1999. In 2001, Australia
produced 0.8% of the world’s steel and ranked number 22 in the world’s steel production
(Faber, 2002:6).1 Today the Australian Steel Industry consists of three major steel companies:
•
•
•
Smorgon Steel Group (which listed on the Australian Stock Exchange in February
1999).2
OneSteel Limited (listed at the Australian Stock Exchange the 23 of October 2000, as a
spin-off company from BHP Limited).3
BHP Steel Limited (listed on the ASX the 15 of July 2002. The company was
previously a business group within BHP Billiton.4
Attached below is a map of the Australian Steel Mills:
Figure 1: Australian Steel Mills
Source: Extracted from a presentation held by Ray Horsburgh (MD & CEO at Smorgon Steel) at the Emerging
Leaders Conference held the 1st of May 2002.
Web page: http://www.smorgonsteel.com.au/pdf/presentation01052002.pdf
C. Martinez and M.Bjørkli
6
Key Dates in the History of Australian Steel Industry
The history of iron and steel production in Australia has its roots back in 1875, when the first
blast furnace at Lithgow was built, but the first steel production in Lithgow carried out by Mr.
B Sandford, did not take place until 1900. In 1908 George and Cecil Hoskins took over the
Sandford works which was renamed in 1928 becoming the Australian Iron and Steel Ltd.
(AI & S). 1
In 1915 the Broken Hill Proprietary Company Limited (BHP) began steel making and opened
its first steel making facilities in Newcastle. (BHP dates back to 1885 where it’s main business
was to mine and smelt silver, lead and zinc). In 1935 AI & S was taken over by BHP Limited.
John Lysaght (Australia) Pty Ltd was formed in 1918 with the aim of assisting the Australian
building and construction industry. This company became wholly owned by BHP Limited in
1979. So by 1979 the Steel Industry in Australia was dominated by one company, BHP
Limited.5 In 1988 Smorgon Steel became operational (Australian Environment Council, 2000).
In 1999 BHP closed the loss making steel mill in Newcastle. In October 2002 OneSteel was
listed on the Australian stock exchange as a spin off from BHP Limited. BHP Steel was created
as a separate company in July 2002, and is expected to have a name change in November
2003.6 The new name will be BluScope Steel.7
2
In 2001, BHP Limited left the Australian Steel Industry altogether, and merged with the Anglo
African mining house Billiton plc to form BHP Billiton. Its focus is on mining, energy and
mineral processing.
Employment Figures and Turnover of the Australian Steel Industry, 2000-2001
If we define the steel industry in narrow terms (ANZSIC 2711) there were 19 100 people
working in the steel industry in 2000/2001, with an annual turnover of A$8.1 billion. If we
however, look at the steel industry in broader terms and include all the industries listed in Table
1 below, there are 75,100 people employed, with an annual turnover of A$21.1 billion. The
numbers have been halved where the ANZSIC classes do not distinguish between the Iron and
Steel Industry and the Steel Industry (Faber, 2002).
Table 1: Industry Classes Related to the Australian Steel Industry, 2000-2001
ANZSIC
2711
2712
2713
2741
275
276
1
Basic iron & steel manufacturing
Iron & steel casting & forging
Steel pipe & tube
Structural steel fabricating
Sheet metal product manufacturing
Fabricated metal product
Manufacturing
Iron and steel wholesaling
Total (only half of 275 and 276
included)
Employment
thousands
19.1
5.3
4.1
17.3
18.2
40.4
Turnover
A$ billion
8.1
1.0
1.2
2.9
3.2
5.8
Na
75.1
3.3a
21.1
http://www.austehc.unimelb.edu.au/tia/320.html 30.09.03
C. Martinez and M.Bjørkli
7
Source: Extracted from the Department of Industry, Tourism and Resources WebPage
http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=99BC02FC-7257-4640-A9DB437A54CA729A
ABS annual publication 8221.0 and predecessor publications deflated using GDP implicit price deflators supplied
by the ABS. Data interpolated for 1970-71 and 1985-86.
Note: the ABS changed its manufacturing survey from one based on manufacturing establishments to one based on
manufacturing management units in 2000-2001’.8 The original table is from Faber, The Australian Steel Industry,
p 5.
Basic iron and steel-manufacturing turnover in Australia over 30 years has been very stable,
much the same as it was thirty years ago9. Table 2 outlines the earnings and turnover ratio for
the three Australian steel companies in 2000/2001 and 2001/2002. 10
Table 2: Sales Revenue in the tree Steel Companies
Company
Sales Revenue 2000
OneSteel Limited
2,959.1m11
Sales Revenue 2001
(June 2001)
2,637.7 m12
Smorgon Steel
2,267 m14
2,441.4 m
BHP Steel Ltd.
Not available
4,941 m
Source: OneSteel, Annual Report for 2002, p 4-5 and p 52.15
Smorgon Steel, Annual Report for 2002, p 5 16
Smorogn Steel, Annual Report for 2001, p 517
BHP Steel, Annual Earnings Report, 30 June 2002, p 618
Sales Revenue 2002
(June 2002)
2,906 m13
2,666,2 m
4,593 m
At the employment level, numbers in basic the iron and steel industry had been reduced
drastically (see Figure 2 below). This is a result of restructuring and rationalising the industry
in recent years to reduce cost and improve efficiency.
Figure 2: Employment in Basic Iron and Steel Manufacturing
Source: Extracted from the Department of Industry, Tourism and Resources Web Pages:
http://www.industry.gov.au/content/controlfiles/display_details.cfm?objectID=C4D4FD67-48FC-4927ACB2877F8697E547 ‘ABS annual publication 8221.0 and predecessor publications. Data interpolated for 1970-71
and 1985-86. Note: The ABS changed its manufacturing survey from one based on manufacturing
establishments to one based on manufacturing management units in the 2000-2001 year.’1920
C. Martinez and M.Bjørkli
8
Table 3 shows the employment numbers in the three steel companies; OneSteel, Smorgon and
BHP Steel in 2001 and 2002. The employment numbers from BHP Steel were not available in
any annual report.
Table 3: Employment Numbers in the three Steel Companies
Company
Employment 2001
Employment 2002
7,37922
6,98923
OneSteel Limited21
24
5,975
7,914
Smorgon Steel
Not available
Not available
BHP Steel
Source: OneSteel, Annual Report for 2002, p 4-5 and p 52.25
Smorgon Steel, Annual Report for 2002, p 5 26
Smorogn Steel, Annual Report for 2001, p 527
BHP Steel, Annual Earnings Report, 30 June 2002, p 6. 28
2.2 OneSteel
OneSteel Limited was selected as the case study company because it has a recent history of
pursuing innovation. It was created by combining eight related businesses to form an
integrated, innovative mining, steel manufacturing and steel and metal products distribution
company. Previously, these businesses were mainly organised as independent operations.
OneSteel is a manufacturer of steel long products and a distributor of metals. It manufactures
and distributes anything from ‘structural, rail, rod, merchant bar, cold finished bar, chrome
plated bar, reinforcing, wire, tube, pipes, fittings, valves and actuation’29. It is also a distributor
of sheet and coil, piping systems, plate and aluminium product. At Whyalla Steelworks in
South Australia, OneSteel processes iron ore from its mining operations into steel. The
company has 200 operating locations (distributions and manufacturing facilities) throughout
Australia and New Zealand. The three major manufacturing facilities are located in Newcastle
and Rooty Hill in NSW, and Whyalla in South Australia. The bulk of OneSteel's products are
used in the manufacturing, construction, mining, housing and agricultural industries.
OneSteel has divided its business into four business units. These are:
1.
2.
3.
4.
Whyalla Steelworks;
Market Mills;
Distribution;
Steel and Tube Holdings.
In this study we specifically looked at the Market Mills in Rooty Hill and Newcastle. In Sydney
the Market Mills operates a steel mill and bar mill, and in Newcastle it operates a rod mill and
bar mill.
OneSteel in Rooty Hill, Western Sydney
Greater Western Sydney stretches from ‘the Blue Mountains in the west to the lower reaches of
the Parramatta River in the east, and from the Wollondilly region in the south to the
Hawkesbury River in the North’.30 Greater Western Sydney’s economy has from an historic
point of view, been based on agriculture and manufacturing industries. Greater Western Sydney
C. Martinez and M.Bjørkli
9
is the third largest regional economy after Sydney and Melbourne. The population is around 1.6
million, 43 percent of Sydney’s population.31
OneSteel’s facilities in Greater Western Sydney are located at the 27 hectare site in the
industrial area of Rooty Hill, and consists of the main process areas of scrap metal storage, Cast
Shop and Melt Shop facilities, space for billet storage, dust and fume collection plant,
warehouse, Rolling Mill and an administrative block.32
Every year over half a million tonnes of scrap metal is made into 500,000 tonnes of steel billets.
180,000 of these steel billets are manufactured on-site through the rolling mills, the remaining
billets are transported to OneSteel’s Newcastle Rod and Bar Mill. 33 There are approximately
220 people working at the Rooty Hill Mill.
Photograph 1: OneSteel facilities at Rooty Hill (Western Sydney)
OneSteel in Newcastle, Hunter Region
The Hunter Valley is located about 100 kilometers north of Sydney. It has been the coal and
steel industry that have been driving the economy for the last several decades and some might
say the driver of the NSW economy. The Hunter has a world-class water port, the world’s
largest coal loader and a well-ranked University. The population in the Hunter Valley is 573
000, and covers 31,000 square kilometers.34 It consists of the Lower Hunter, Barrington Tops
and the Upper Hunter and the Great Lakes.
OneSteel’s steel manufacturing facilities in the Hunter Valley is located in Newcastle. This
study focuses on the Newcastle Bar Mill and the Newcastle Rod Mill.
Newcastle Bar Mill
The Bar Mill in Newcastle commenced in 1968, and it occupies a 30-hectare area in the
industrial area of Mayfield. The bar mill comprises the main process areas of ‘reheat furnace,
rolling mill, cutting and bundling equipment, purpose built round bar inspection facilities, as
well as space for billet storage and warehouse’.35 The mill manufactures approximately 360,000
tonnes of finished product per year.
Steel feed in billet form is transported from Onesteel’s main steel making facility at Whyalla in
South Australia and some from the Steel mill in Rooty Hill. In Newcastle they transform the
C. Martinez and M.Bjørkli
10
billets into 360,000 tonnes of finished product. The mill’s reputation has been built on high
quality engineering grade steels many of which are used in the Automotive Industries - steels
like springs, tie rods, steering knuckles and transmission components. More than 218 people are
employed at Newcastle Bar Mill.
Newcastle Rod Mill
The rod mill is also located in the industrial area of Mayfield and comprises the main process
areas of a billet yard, reheat furnace, roughing mill, intermediate mill, pre-finishing mill, NOTWIST finishing mill, coil handling system, coil despatch facility, as well as space for rod
storage.36 The Newcastle rod mill produces around 600,000 tones of rod per year. This is
distributed both for the Australian market and internationally. There are currently more than
200 people employed at the mill.37
Photo 2: OneSteel facilities at Newcastle
3. Regional knowledge Systems in the Hunter and the Greater
Western Sydney regions
The transformation of the so-called low tech industries to meet new conditions has never been a
major focus of attention in Australia despite the fact that Australia’s economy is still
considerably dependent in resource based industries. Innovation requires the generation and use
of new knowledge. This can be acquired internally from external R&D training organisations or
through regional networks. Network capital is defined here as the capacity of a region to
activate all socio economic actors in a way that accumulates processes of collaboration and
innovation (Sik, 1994; Wong, 1998, Martinez-Fernandez, 2001) in the transformation of its
industries.
Previous work by Martinez-Fernandez shows the role and effects of regional networks
(Martinez Fernandez, 2001) in renewal of old industry territories. Regional networks include
organisations from the public, private and civic sector and they operate around projects of
regional development. The result from this study shows that regional networks greatly assist
innovation through sharing information and knowledge and participating in common projects.
Specifically, the study found that frequency of communication among regional organisations
and institutions is a structural element that significantly affects the creation and use of
C. Martinez and M.Bjørkli
11
knowledge to produce new projects, and geographic proximity plays a significant role in the
innovation process.
According to Nauwelaers & Reids a regional innovation system is the set of economic, political
and institutional relationships occurring in a given geographic area which generates a collective
learning process leading to rapid diffusion of knowledge and best practice (Nauwelaers & Reid
1995).
Knowledge can be transferred, produced and diffused through networks which are only partly
dependent on proximity. The more global knowledge economies become the less dependent
they are on national institutions yet despite this, spatial proximity seems to retain importance
(AEGIS, 2003, Audretch 1995). According to a study carried out at AEGIS in 2002, much
knowledge is ‘sticky’ and does not travel far. It is therefore very important for firms to
maximise their information about the local knowledge institutions in the region where they are
located (AEGIS, 2002).
It is important for regions to optimise the values of the public sector knowledge institution.
(OECD 1999, Maskell 2001). A regions competitiveness is dependent on how to acquire
knowledge capital and how to apply new knowledge through a highly trained workforce. A
recent AEGIS study remarks that the key to success is creating and improving links between
knowledge producers and knowledge users (AEGIS, 2003). 38
’Spatial proximity to the sources of new knowledge does not automatically encourage firms to take
advantage of what is on offer. This means that special measures may be needed to diffuse information, skills
and technologies more effectively in the local region rather than simply rely on ‘simple’ commercialization
plans which do not take account of the locations of potential users. Spatial proximity between knowledge
generating and using organizatios will not be enough to ensure that maximum use is made of available
information’. (AEGIS, 2003:8)
‘Since few areas are likely to be self sufficient in knowledge generation and use, it is also important to see
how both firms and knowledge organizations firms gather and use information drawn from multiple sources.
This will also reveal gaps where firms, for instance, would prefer to work more closely with local
organizations but find that the relevant knowledge and skills are not available’. (AEGIS, 2003:9)
‘Overseas experience and the international literature on innovation suggest the importance of policies to
encourage collaboration between knowledge organisations and the associated knowledge creation and better
development and diffusion of innovation’. (AEGIS, 2003:72)
This section discusses the knowledge systems of Greater Western Sydney and the Hunter to
map the regional knowledge infrastructure in both regions. The organisations presented here
can be seen as forming regional networks.
3.1 Greater Western Sydney Knowledge System
An important part of an innovation system are the knowledge institutions of the region.
Knowledge institutions are universities, TAFE, CSIROs, CRCs, airports (if they are centres of
hight technology) and teaching hospitals. Government organisations, not-for-profit
organisations and private organisations in the region are also part of the knowledge system.
C. Martinez and M.Bjørkli
12
In Western Sydney there are two main knowledge institutions; University of Western Sydney
(UWS) and TAFE. There are no CSIRO or CRC’s located in Greater Western Sydney, however
UWS is a core participant in three CRC’s located in other regions.
University of Western Sydney has six campuses spread across the Greater Western Sydney
Region and it works closely with the local communities and businesses. The six campuses are:
Hawkesbury Campus, Blacktown Campus, Parramatta Campus, Bankstown Campus,
Campbelltown Campus and Penrith Campus.
UWS is a core participant in three of the CRC’s Centres:
• CRC for Construction Innovation (located in Brisbane);
• CRC for Wast Management and Pollution Control (located at UNSW, Sydney);
• CRC for Eye Research and Technology (located at UNSW, Sydney).
There are the following teaching hospitals:
• Westmead Hospital: Teaching hospital, Sydney University, UWS;
• Nepean Hospital, Teaching Hospital, Sydney University, UWS;
• Blacktown, Mt Druitt, Auburn and Hawkesbury are smaller hospitals which participate
in teaching;39
• Bankstown Hospital: teaching hospital for UNSW;40
• Liverpool Hospital, teaching hospital for UNSW.41
TAFE has three Institutes in the Region and outlined below are all the campuses in Western
Sydney.42
• Western Sydney Institute: Kingswood, Nepean College, Baulkham Hills College,
Blacktown College, Blue Mountains College (Wentworth falls and Katoomba), Building
Industry Skills Centre (BISC), Nirimba College (Quakers Hill), Mt Druitt College;
• Southern Sydney Institute: Bankstown College, Lidcombe College, Padstow College;
• South Western Sydney Institute: Campbelltown College, Granville College,
Macquarie Fields College, Miller College, Wetherill Park College, Liverpool College.
There is an airport located in Bankstown. There are also 20 research companies in the region,
clustering around the boundaries of Auburn and Parramatta.
Figure 3 below show the Greater Western Sydney Knowledge Institutions clustering around the
boundaries with Auburn and Parramatta.
C. Martinez and M.Bjørkli
13
Figure 3: Map of Greater Western Sydney and it’s Knowledge Institutions
Table 3 presents the knowledge organisations of the Greater Western Sydney regional network.
Representatives of the 24 organisations often meet in relation to projects of economic
development and sit on several committees and boards of each other’s organisations.
C. Martinez and M.Bjørkli
14
Table 3: Regional organisations in Greater Western Sydney
Organisations/Agencies
Type
1. Office of Western Sydney
http://www.westernsydney.nsw.gov.au/
Public
2. Western Sydney Regional Organisation of Councils
(WSROC)
http://www.wsroc.com.au/regional_links.asp
Team West Regional Agenda
teamwest.cadre.com.au
NGO
3. Greater Western Sydney Economic Development Board
http://www.gws.org.au/home.shtml
NGO
4. Macarthur Regional Organisation of Councils (MACROC)
www.macroc.nsw.gov.au
Public
5. University of Western Sydney
http://www.uws.edu.au
• Office Research Development
• Office of Business Development
• Office of Research Services
Public
6. Blacktown Regional Business Association
http://www.blacktownbusiness.com.au/aboutus.php
NGO
7. TAFE, Western Sydney Institute
Public
8. GROW
http://www.grow.org.au/
NGO
9. Planning NSW
http://www.planning.nsw.gov.au/
Public
10. Australian Business Ltd, Western Sydney Councils
Private
11. Australian Industry Group; Western Sydney Office and Training
Centre, located at UWS Westmead Campus
NGO
12. Department of State and Regional Development, Western
Sydney Office.
Sydney West Marketing
Public
13. Penrith Valley Economic Development Corporation
Private
14. Industry Capabilities Network
NGO
15. Business Advisory Service Inc.
http://www.basi.com.au/
16. Blacktown Regional Economic & Employment Taskforce Inc.
http://www.nirimba.org.au/mgt_profiles.htm
Private
C. Martinez and M.Bjørkli
NGO
15
Organisations/Agencies
Type
17. The Greater Western Sydney Business Connection Inc.
www.gwsbc.asn.au
NGO
18. Blacktown Council
Public
19. Blacktown Business Chamber
Public
20. Smithfield – Wetherill Park Chamber of Commerce
Public
21. Penrith Valley Chamber of Commerce
Public
22. Penrith Valley Economic Development Corporation
Private
23. Austool
NGO
3.2 Hunter Region Knowledge System
In the Hunter region there are two main knowledge institutions: University of Newcastle and
TAFE. There is one CSIRO, but no CRC’s located in the Hunter region. The University of
Newcastle is however a core participant in six CRC’s located in other regions
CSIRO has recently opened a new Energy Centre in Newcastle.43
There are no CRC’s located in the Hunter region, but University of Newcastle is a core
participant of several CRC’s located in other regions. These are:
•
•
•
•
•
•
CRC for Advanced Composite Structures (located in Fishermans Bend in Victoria);
CRC for Bio-products (located in Melbourne);
CRC for Construction Innovation (located in Brisbane);
CRC for Conservation and Management of Marsupials (located in Macquarie Centre,
NSW 2113);
CRC for Coal in Sustainable Development (located in Pinjarra Hill, Qld)
Australian CRC for Renewable Energy (located in Murdoch, WA);
CRC for Satellite Systems (located in Canberra).
TAFE Hunter Institute has sixteen campuses: Belmont campus, Cessnock campus, Glendale
campus, Hamilton campus, Kurri Kurri campus, Muswellbrook campus, Scone campus.
Tomaree Campus, Central Coast campus, Charlestown campus, Gosford campus, Hunter Street
campus, Maitland campus, Newcastle campus, Singleton campus and Wyong campus.
There are ten Hospitals in the Hunter region. Three of these are teaching hostpitals; ‘John
Hunter’, ‘Newcastle Mater’ and ‘Royal Newcastle’. 44
There is a major regional airport in Newcastle. There are 11 research companies.
Figure 4 below shows the knowledge institutions in the Hunter, most of them clustering around
Newcastle City.
C. Martinez and M.Bjørkli
16
Figure 4: Map of Hunter Valley and it’s Knowledge Institutions
C. Martinez and M.Bjørkli
17
Table 4 presents the 36 regional organisations of the Hunter regional network (see MartinezFernandez, 2001 for a comprehensive explanation of this network).
Table 4: Regional Organisations in the Hunter Region
Organisations/Agencies
Type
1. Hunter Development Board
NGO
2. The Hunter Regional Tourism Organisation
http://www.huntertourism.com/Online/home/main.html
Public
3. Hunter Business Chamber
http://www.hunterbusinesschamber.com.au/
Public
4. Industry Development Centre (IDC)
NGO
5. Business Enterprise Centres (BEC)
Lower Hunter BEC
Upper Hunter BEC
NGO
6. Lake Macquarie Small Business Centre
Private
7. Hunter Economic Development Corporation (HEDC)
http://www.hedc.nsw.gov.au/
Public
8. NSW Department of State and Regional Development
Public
9. Hunter Region Organisation of Councils
Pubic
10. Hunter Area Consultative Committee (HACC)
Public
11. Hunter Valley Research Foundation (HVRF)
Private
12. Hunter Export Centre (HEC)
Private
13. Austrade
Public
14. Hunter EdNet
NGO
15. NSW Industrial Supplies Office (ISO)
Public
16. HunterNet
NGO
17. HunterTech
NGO
18. Sustainable Industries Inc
Private
19. TAFE Hunter Institute
Public
20. Honey Suckle Net: Honey Suckle Development
Cooperation
Private
21. NewcastleBusiness.Com
NGO
C. Martinez and M.Bjørkli
18
Organisations/Agencies
Type
22. Newcastle Business Enterprise Centre
Private
23. Upper Hunter Trade and Labour Council
http://www.atua.org.au/biogs/ALE1283b.htm
NGO
24. Hunter Regional Development Organisation
(HURDO)
NGO
25. Lower Hunter & Central Coast Regional
Environmental Management Strategy Committee. Hunter
Catchment Management Trust
LHCCREMS
http://www.lhccrems.nsw.gov.au/archives/strategy-intro.php
Public
26. Hunter Chamber of Commerce
Newcastle Regional Chamber Commerce
Public
27. Newcastle Trades Hall Council
NTHC
http://www.newtradeshall.com/executive.asp
NGO
28. Metal Trade Industry Association
MTIA
NGO
29. Hunter Common Purpose Group
Informal
30. TAFE, Hunter Institute of Technology
Public
31. Newcastle University
TUNRA
Public
32. Area Consultative Committee
ACC
Public
33. NSW Coordinator, Hunter and Central Coast
Public
34. Yantee Aboriginal and Torres Islander Corporation
35. Australian Industry Group
NGO
36. The Australian Institute of Mining and Metallurgy:
Hunter Branch
Source: Adapted from Martinez-Fernandez, 2001
NGO
We have chosen the steel facilities in Rooty because it will make a suitable comparison across
regional innovation systems. The strong presence of the University of Western Sydney in the
area, with a campus at Quakers Hill, which includes a TAFE facility, gives a point of analysis
of UWS knowledge intersection with the OneSteel mill.
C. Martinez and M.Bjørkli
19
3.3 Knowledge functions: transmission, generation and transfer
Knowledge systems can have three functions in a region: transmission of knowledge,
generation of knowledge and transfer and adaptation of knowledge. This section looks at some
indicators of each of them.
Knowledge Transmission
An indicator of knowledge transmission is the number of students enrolled in the main
knowledge institutions. Figure 5 shows a growing number of TAFE students in Greater Western
Sydney.
Figure 5: TAFE Enrolments in Greater Western Sydney
Number of students
140,000
120,000
South Eastern Sydney
Insitute (minus
St.George and
Sutherland)
Western Sydney
Institute
100,000
80,000
60,000
40,000
20,000
0
2000
2001
2002
South Western
Sydney Insitute
Year
* We have included the following Colleges:
1) All the campuses of Western Sydney Institute, a total of 50,208
2) We have included the following Colleges at the Southern Sydney Institute : Bankstown (2200), Lidcombe
(2141), Padstow (2211),
3) We have included the following Institues from South Western Sydney Institute: Campbeeltown (2560),
Granville(2142), Liverpool (2170), Macquarie Fields (2564), Miller (2168), Wetherill Park 2164 and SWSI
International
Source: Statistics, Newletter 2000-2002, TAFE Statistics Unit, Strategic Information and Planning Directorate,
NSW Department of Education and Training.
http://www.det.nsw.edu.au/media/downloads/reports_stats/stats/tafestatsnews/sn_2003aug.pdf
Figure 6 shows a slower growth of the number of TAFE students in the Hunter.
C. Martinez and M.Bjørkli
20
Figure 6: TAFE Enrolments in the Hunter Region in 2000, 2001 and 2003.
Number of enrolments
60,000
50,000
40,000
30,000
20,000
10,000
0
2000
2001
2002
Ye ar
Source: Statistics, Newsletter 2000-2002, TAFE Statistics Unit, Strategic Information and Planning Directorate,
NSW Department of Education and Training.
http://www.det.nsw.edu.au/media/downloads/reports_stats/stats/tafestatsnews/sn_2003aug.pdf
Figure 7 shows the number of university students enrolled at UWS and Newcastle University.
Figure 7: Students Enrolled in Universities by Institution in the Hunter Region and Greater Western
Sydney in 2001
35,000
Number of students
30,000
25,000
20,000
15,000
10,000
5,000
0
Hunter Region: The
University of
New castle
Greater Western
Sydney: UWS
Re gion
Source: Commonwealth Department of Education, Science and Training, 2002, Table 29
Figure 8 shows the number of university students by broad field of education for the Hunter and
Western Sydney.
C. Martinez and M.Bjørkli
21
Figure 8: All Students by Institution in the Hunter Region and Greater Western Sydney and Broad Field of
Education, 2001
Natural and Physical
Sciences
Inf ormation Technology
12000
Number of students
10000
Engineering, Related
Technologies and
Architecture and Building
Agriculture, Environmental
and Related Studies
8000
6000
4000
Health
2000
Management and Commerce
0
The University of
New castle
University of
Western Sydney
Unive rs ity
Humanities, Social Sciences
and Other
Source: Commonwealth Department of Education, Science and Training, 2002, Table 32
Figure 9 shows the detail of students enrolled in engineering and related technologies in both
regions. Engineering degrees will be the most relevant to OneSteel operations.
Figure 9: Engineering and Related Technologies
Number of Students
2000
1500
1000
500
0
The University
of New castle
University of
Western
Sydney
Unive rs itie s
Source: Commonwealth Department of Education, Science and Training, 2002, Table 32
Transmission of knowledge has been the traditional role of universities and more data is
available for this analysis than for the generation and transfer of knowledge.
C. Martinez and M.Bjørkli
22
Knowledge Generation
The available data here is the expenditure on R&D, some data related to patenting and
licensing, and the number of postgraduate students by research field in each region. Here we
present only the expenditure on R&D. Figures 10 and 11 below show the higher expenditure by
the University of Newcastle. The difference is significant in terms of engineering and
technology - Newcastle Uni is expending much more than UWS. One factor is the higher
expenditure of Newcastle Uni in general and the other factor is the long association of
Newcastle with the Steel industry.
Figure 10: Expenditure on R&D by Institution and Broad Field of Study, 2000
25
The University of New castle
Million A$
20
University of Western Sydney
15
10
Economics &
Commerce
Humanities,
Social
Sciences
Law, Justice &
LawEnforcement
Medical &
Health
Sciences
Agricultural,
Veterinary &
Environmental
Engineering &
Technology
Natural &
Physical
Sciences
0
Information,
Computer &
Communication
5
Broad fi e l d of stu dy
Source: Expenditure on R&D by Institution in NSW and Broad Field of Study, 2000 (Commonwealth Department
of Education, Science and Training, 2000, Table 3)
C. Martinez and M.Bjørkli
23
Expenditure (A$M)
Figure 11: Research Expenditure by Universities in NSW in 2000
80
60
40
20
0
The University of
New castle
University of Western
Sydney
University
Source: Research Expenditure by Universities in NSW in 2000 (ARC National Survey of Research
Commercialisation, 2002, p93)
Knowledge Transfer
Of the knowledge functions the transfer of knowledge is the function where fewer indicators
have been developed. We know very little about how much knowledge universities transfer to
industry or vice versa. Figure 12 shows the different research expenditure between the higher
education sector and industry. Applied research is the area where both worlds converge.
Figure 12: Expenditure by Higher Education Sector and Industry on Research and Development by Type of
Activity, 2000-2001.
3,500
Basic Research
3,000
Applied Research
Experimental Development
Expenditure ($m)
2,500
2,000
1,500
1,000
500
0
Universities
Industry
Sector
Source: Extracted from the draft report ‘Stocktake of NSW as a Potential Knowledge Hub’, prepared by AEGIS
for the Office of Western Sydney, p. 54.
Australian Bureau of Statistics, 8111, 2002, p.10; Australian Bureau of Statistics, 8104, 2002, p.10.
C. Martinez and M.Bjørkli
24
Figure 13 shows research expenditure by location.
Figure 13. Expenditure on Research and Development by the Higher Education Sector and Industry by
location 2000-01
1800
1600
NSW
Expenditure ($m)
1400
Vic
1200
Qld
1000
SA
WA
800
600
400
200
0
Universities
Industry
Sector
Source: Extracted from the draft report ‘Stocktake of NSW as a Potential Knowledge Hub’, prepared by AEGIS
for the Office of Western Sydney, p. 55.
Australian Bureau of Statistics, 8111, 2002, p.13; Australian Bureau of Statistics, 8104, 2002, p.12
4. OneSteel Knowledge Flows
4.1 Traditional Industries and Knowledge
Traditional industries have had to restructure themselves around knowledge and their
transformation is a key part of a modern economy characterised by product service linkages.
There seems to have been a conception that traditional/old industries and service industry, are
separate areas of economic activity, but according to a study carried out by AEGIS (2002), the
two economies are often not really separate at all. Instead of talking about new and old
economies, the study suggests it is more useful for companies to restructure the corporate
strategy and link manufacturing and services. The study concludes that innovation exists in all
industrial sectors, not only in the high tech sector.
‘The study shows that what can be broadly characterized as the two economies are often not really
separate. More specifically, manufactured products of all kinds are linked to services via the competitive
strategies of individual firms’...‘Rather than talking in terms of old and new economies, the paper
suggests it is more useful to access shifts in corporate strategy that take advantage of both new
technologies and new ways of organising production and distribution by incorporating them into
strategies for the production and sale of products from both old and new economies’ (AEGIS, 2000: 4).
Although the AEGIS study proposes an interesting argument, that manufacturing firms should
use product-service packages instead of separate products or services, the reality of how
business works is not the same for SMEs as it is for large companies. For example, OneSteel
was created to combine eight diverse yet related businesses to form an integrated mining, steel
C. Martinez and M.Bjørkli
25
manufacturing, and steel and metal products distribution company. Even within this explicit
integrative strategy, the four business units of OneSteel have different strategies, internal
developments and few interactions between the different business units. The deep different
business models are best seen when comparing market mills with distribution. Distribution is a
business unit that requires many more contacts with clients as a large part of its operation, it is
client focused and driven. Thus, this unit is more ‘service’ oriented and has more links with
regional organisations than the market mills unit. For large organisations it is often not
appropriate to have all business units oriented to services, it makes better sense to have just one
that is more closely linked to clients.(AEGIS interview data, 24.09.03).
Both ‘new’ and ‘old’/traditional industries require knowledge to be competitive, but according
to a survey conducted by the Australian Industry group (AIG) in 2002 only 4 percent of
Australian manufacturing companies undertake R&D (AIG, 2002:8). The study further shows
that only 24 percent of the manufacturing firms, which are undertaking R&D activity, had
collaborated with a public R&D facility such as a university, CSIRO or CRC. This percentage
is however increasing with company size (AIG, 2002:10).
The AIG study also shows that most manufacturers are self-funded regarding R&D. According
to the study government grants and tax concession accounts for only 2.5-3% of the expenditure
(AIG, 2002: 9).
‘Overall, a significant majority of firms (around 70%) were aware of the major government
programs designed to support business R&D’…. ‘The highest level of awareness is the standard
R&D (125%) Tax Concession (76% of firms). High level of awareness (over 70%) also exists
for the R&D Start Grant, and the R&D Enhanced (175%) Tax Concession’. (AIG, 2002:10-11)
OneSteel is among the 4 percent of Australian manufacturing companies that use R&D. In the
financial year of 2001 Onesteel spent approximately $2.7 million on external R&D, primarily
through various university based research and development activities.45 In the financial year
2002 Onesteel had 243 research and development projects across its business: 50% of these
represent new products, knowledge and process, 40% represents product enhancements and
10% represents process enhancement. 46 (OneSteel’s Annual Report 2002: 8). Nine million
were claimed under the R&D Tax Concession Program.
Traditional industries may seem to be low tech, but also low tech industries are part of the high
tech system. So even though many manufacturing companies do not spend much money on
R&D, knowledge will flow into the companies through other ways (Keith Smith, 1999) such as:
‘Embodied flows’ which involve knowledge built into machinery and equipment.
‘Disembodied flows’ which involve the use of knowledge, transmitted through scientific
and technical literature, consultancy, education systems, movement of personnel and so on.
(Smith, 1999:9)
Smith argues that knowledge indirectly gets transported into traditional industries, through
technical equipment, scientific and technical literature, education system, consultancy and
through movement of other personnel. He also argues that knowledge is not therefore linked to
their direct performance. It is more the indirect link with universities, research institutes and
supplier companies.
‘Most so called low tech sectors are intensive in their use of scientific knowledge such as
food production, machinery, printing and publishing, wood products and a range of services,
have significant indirect science inputs. The depth and complexity of industry knowledge
C. Martinez and M.Bjørkli
26
bases are not linked to their direct R&D performance’…’These science inputs are supported
by complex, indirect links with universities, research institutes and supplier companies.
Thus low tech industries are frequently part of high tech systems and policy makers should
be aware of their significance for growth…growth is not primarily based on the creation of
new sectors but on the internal transformation of sectors which already exists. This internal
trans-formative capacity rests in turn on complex innovative systems which create distribute
and maintain advanced knowledge’. (Smith, 1999; 21)
We adapted the Keith Smith (1999) model to look at the key areas in the company; the kind of
techniques the company uses for these key activities; the Knowledge Base for each of the key
activities; the Research institutions, and associated partners for each of the key activities
The following table shows some of the knowledge flow proposed by Smith (1999) to
understand knowledge acquisition by traditional industries. The table reports on Rod Mill
process, Bar Mill process, and safety only.
C. Martinez and M.Bjørkli
27
Table 5: OneSteel Knowledge Flow (2003)
Key Areas47
Key Activity
Technique
Field of specialisation
Research Partners
Rod Mill
Process
Inspection
Educurrant Testing
Laser Farrage
People Inspection
Anyone can do it with
some training
(Done by operators)
N/A
Roller Production
Maintenance
Equipment /
Maintenance
Done by the operators
N/A
Chemical and
mechanical
Testing
N/A
Engineering
University of
Melbourne
Inspection
Laser Farrage
People Inspection
Anyone can do it with
some training
(Done by operators)
N/A
Roller Production
Maintenance
Equipment /
Maintenance
Done by the operators
N/A
Chemical and
mechanical
Testing
N/A
Engineering
Testing
N/A
Bar Mill
Process
Safety
N/A
Engineering
Agreements with an
American Company,
which is a world
leader in safety.
4.2 OneSteel in the Hunter and Western Sydney Knowledge Systems
Section 3.2 above presented a table with the regional organisation in the Hunter and in the
Greater Western Sydney. Our interview data shows very little interaction between OneSteel and
the regional innovation system. This is the same both for the Hunter and Greater Western
Sydney. See below some contents extracted from the interviews:
‘It is unlikely for us to go out to the universities at the moment. The pro-activity should come from the
universities and the knowledge organisations’. (AEGIS, Interview data 24.09.03)
‘We would like to get some better understanding regarding what is available. We don’t necessary know what
the knowledge organisations can offer us and we do not always know what is available in the region. We
would like the organisations to talk to us and find out what our needs are. (AEGIS, Interview data 24.09.03)
‘Most TAFE courses go from six months to four years. What we often are after is two day courses, .short
course in manufacturing. If they do have these kind of courses they do not advertise it’. (AEGIS, Interview
data, 16.09.03)
‘I have a negative perception of academia. A lot of the time we are looking for solutions to a business
problem, and I do not find these institutions suitable to provide strategic solutions’. (AEGIS, Interview data,
28.08.03)
C. Martinez and M.Bjørkli
28
OneSteel has links with several research institutions across Australia; The University of
Sydney, The University of Western Sydney, Victorian University of Technology, CRC for
welded Structures, The University of Adelaide, Monash University, CIDECT as well as many
other Australian research institutions. 48 This close link with universities and research
institutions helps the company to redefine steel design and provide good design tools. These are
the institutions where OneSteel has links:
•
•
•
•
•
•
•
•
CSIRO Manufacturing & Infrastructure Technology;
Centre for Construction Technology and Research (CCTR) – University of Western
Sydney;
Centre for Cold Formed Steel Structures – University of Missouri;
CIDECT – Construction with Hollow Sections;
Centre for Environmental Safety and Risk Engineering (CESARE) Victoria;
CSIRO – Commonwealth Scientific and Industrial Research Organisation;
VTT – Technical Research Centre of Finland – Building Technology
(www.onesteel.com/link.asp, 20 September 2003);
CRC for Welded Structures (University of Wollongong).
Specifically in Western Sydney, OneSteel (reinforcing) has links with:
1. Universities: Centre for Construction Technology and Research (CCTR) is a key
research centre for construction technology and research attached to the University of Western
Sydney. The centre uses current research and knowledge to development of practical solutions
to unique problems that arise in the construction industry (steel, concrete and composite
structure).49 It has assisted OneSteel with several manuals to support the design of composite
and reinforced concrete structures for example OneSteel Market Mills Composite Structures
Design Manual and OneSteel Reinforcing’s Guide to Reinforced Concrete Design. OneSteel
Reinforcing sponsors many of the centres R&D projects. The ongoing collaboration includes
the participation of CCTR staff in strategic meetings of OneSteel Reinforcing (AEGIS,
interview data, 24.09.03).
2. Australian Industry Group, as a council member (OneSteel reinforcing).
OneSteel interactions in the Hunter Region reflect the longer tradition of the steel industry in
Newcastle. The following are the links between OneSteel and the Hunter organisations.
1. Hunter Medical Research Institute: OneSteel gave corporate sponsorship50
2. University of Newcastle. The following research centres within University of Newcastle
have been working with OneSteel,
•
The Centre for Infrastructure, Performance and Reliability ‘is concerned with the
assessment of the performance and the reliability of existing and deteriorating or ageing
C. Martinez and M.Bjørkli
29
infrastructure, including buildings, bridges, mining equipment, roads, pipelines, power
transmission towers, shipping, aircraft and railway systems’.51
• Mathematical and Physical Sciences
NewStat Industry
NewStat was established in 1988. It is a research centre for statistical practice and
quality improvement.
• Faculty of Health, School of Medical Practice and Population Health
The aims of the project are to: Examine the physical and psychological effects of the
closure of BHP on former employees and their families in quantitatively measurable
terms in order to develop an aggregate picture of the health impacts involved, to
determine the extent to which an intervention program for general practitioners (GPs)
impacts on GP knowledge, attitude and practice within the context of unemployment
and redundancy
3. TAFE: according to our interview data the relationship is mostly at the level of recruiting
staff.
4. The Hunter Valley Research Foundation. OneSteel is one of the principals and a major
sponsor. 52
5. Hunter Region Worldskills. OneSteel is one of the sponsors of this not-for-profit
organisation developed to promote the standards and status of vocational training and job
skills.53
In conclusion, OneSteel is not well integrated in the Knowledge Systems of the Hunter region
and the Greater Western Sydney region despite the importance of interacting with knowledge
organisations to acquire new knowledge. The situation is better in the Hunter due to the heritage
from BHP but the position of OneSteel in the regional network has diminished if compared
with the more integrated position that BHP held back in 1999 (Martinez-Fernandez, 2001).
5. Conclusions
Many studies in the last two decades have focused on the needs and opportunities available to
new SMEs as if the demographics of the ‘new economy’ are more relevant to these largely
‘client-services oriented SMEs. Traditional industries have not been studied in the same way in
regards to their fit within their regional innovation system and even less when the study
concerns their knowledge flows and interactions with knowledge organisations in the region
where they are located.
The study reported here focused on understanding some of the challenges of the Australian
Steel industry to become more knowledge oriented and take advantage of the available
knowledge and innovation system in their geographical proximity. Although the increasing
globalisation effect facilities access to information and sharing of knowledge everywhere,
‘geographical proximity’ is more relevant than ever. Most knowledge is ‘sticky’ and the
emphasis of ‘what is relevant to who’ is better transmitted face to face.
The results of our study indicate that most knowledge at OneSteel is generated in-house and
there are very limited interactions with organisations in their geographical location. There
C. Martinez and M.Bjørkli
30
might be some informal links but not at the level of unit division. There are only two links to
the 23 organisations in Western Sydney, and seven to the 36 organisations in the Hunter region.
The distribution business unit in Greater Western Sydney (OneSteel Reinforcing) is the main
interface of the two linkages. This part of OneSteel is the most ‘service’ and client oriented.
Our findings indicate that within large organisations differences in how knowledge is
generated, acquired, and adapted might be substantial and that one ‘business model’ will not
apply to all business units. Previous studies recommending that business should concentrate on
strategies for producing service-product packages (AEGIS, 2002) might not apply to large firms
of traditional industries as the complexity of the business does not allow for a single strategy to
take place.
More importantly the findings of the study found no strong evidences of OneSteel interaction
with the regional knowledge system in which they are located. A little bit more interaction was
found in the Hunter region due to the strong footprint of BHP in the region but even then the
links are very limited. The importance of these knowledge systems for innovation in firms and
organisations have been acknowledged in many studies (OECD, 2001; OECD 2002, Maskell,
2002) but the importance of having traditional industries integrated in regional systems affects
not only the innovation of the particular firm but also of the other actors in the region,
especially public research institutions. As the Australian Industry Group (AIG, 2002) study
notes regarding manufacturing businesses, there is a need to ‘encourage greater collaboration between
industry and public R&D facilities. Only 24% of firms undertaking R&D did so in collaboration with a university,
CSIRO and a CRC. More needs to be done to encourage public funded R&D institutions to expand their industry
outreach programs’. (AIG, 2002:12).
The growing trend among new regional universities of ‘university-industry engagement’
(Sproats, 2003; Martinez-Fernandez & Leevers, 2003; B-HERT, 2003) can only be good for
strengthening regional learning and increasing their capability for continuous innovation. Thus,
the lessons from this study affect traditional industries, higher education institutions and other
public-private-civic organisations alike. At the policy level much more is needed to stimulate
and grow regional networks.
C. Martinez and M.Bjørkli
31
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1
http://www.isr.gov.au/content/controlfiles/display_details.cfm?ObjectID=EC763BF6-30F2-49AEB8A6DD940BA51992 08.07.03
2
Extracted from http://www.smorgonsteel.com.au/about/index.cfm?ObjectID=3 08.07.03. It’s activities “ranging
from the collection and processing of scrap metal through to the manufacture, marketing and distribution of a wide
range of steel and steel products. These include concrete reinforcing steel, steel tube, and wire products
3
http://www.onesteel.com/news.asp?newsID=21 “OneSteel Limited (ASX: OST) is Australia's
largest manufacturer and distributor of structural, rail, rod, merchant bar, reinforcing, wire, tube and
pipeline steel products. OneSteel comprises OneSteel Whyalla Steelworks, OneSteel Market Mills,
OneSteel Distribution and a 50.1% holding in Steel & Tube Holdings (NZ) – a total value-chain – from
mining to steelmaking, through manufacturing to distribution. OneSteel has an annual turnover of $3
billion, over 30,000 customers, hundreds of sites across Australia, as well as in New Zealand and Canada
and around 7,000 employees”.
4
Extracted from http://www.bhpsteel.com/navajo/display.cfm/objectID.D00AE633-6BBA-4744AEFD4A12A72A813E 08.07.03
5
a) Department of Home Affairs and Environment (1983) The cost of pollution abatement: the Australian
integrated steel industry. Australian Environment Counicl, Report No 13, p 4. and
b) Australian Science and Technology Heritage Centre Technology in Australia 1888-1988, Published by
Australian Science and Technology Heritage Centre, using the Web Academic Resource Publisher
lhttp://www.austehc.unimelb.edu.au/tia/flyleaf.html
c) http://www.smorgonsteel.com.au/about/index.cfm?ObjectID=4
6
7
http://www.bhpsteel.com/navajo/display.cfm/objectID.39C9D53D-ED03-4305-AAFFBC2B418F1D7F’15.07.03
Business Review Weekly (BRW), September 18-24, 2003, p.40.
Extracted from http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=99BC02FC-72574640-A9DB437A54CA729A 13.08.03
8
9
Department of Industry Tourism and Resources Webpages:
http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=99BC02FC-7257-4640-A9DB437A54CA729A
10
The table is extracted from
http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=99BC02FC-7257-4640A9DB437A54CA729A
11
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf p5, 5
12
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf p 4
13
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf p4
14
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/SSG_AR2001.pdf p5
15
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf, p52
16
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/AnnualReport_2002.pdf p.5
17
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/SSG_AR2001.pdf p 5.
18
http://www.bhpsteel.com/daemon_file/download.cfm?DownloadFile=97D3C541-D251-43F788FC3D42758C3E1B, p5.
20
Extracted from http://www.industry.gov.au/content/controlfiles/display_details.cfm?objectID=C4D4FD6748FC-4927-ACB2877F8697E547 13.08.03
21
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf p4
22
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf. P 5
23
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf p5
24
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/AnnualReport_2002.pdf p.5.
C. Martinez and M.Bjørkli
33
25
http://www.onesteel.com/images/db_images/annualreports/2002%20Concise%20Annual%20Review.pdf, p52
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/AnnualReport_2002.pdf p.5
27
http://www.smorgonsteel.com.au/content/shareholder/annual_reports/docs/SSG_AR2001.pdf p 5.
28
http://www.bhpsteel.com/daemon_file/download.cfm?DownloadFile=97D3C541-D251-43F788FC3D42758C3E1B, p5.
29
Extracted from http://www.onesteel.com/profile.asp 30.06.03
30
Extracted from http://www.westernsydney.nsw.gov.au/about/ 24.06.03
31
http://www.dcita.gov.au/Article/0,,0_1-2_1-4_15941,00.html 02.04.03
http://www.westernsydney.nsw.gov.au/about/ [02.04.03
32
http://www.onesteel.com.au/ezysteel/facilities_sydsteel.asp 25.02.03
33
http://www.onesteel.com.au/ezysteel/facilities_sydsteel.asp, 25.03.03
34
http://www.business.nsw.gov.au/regions.asp?cid=207 02.04.03
35
http://www.onesteel.com.au/ezysteel/facilities_newcbar.asp 21/02/03
36
http://www.onesteel.com.au/ezysteel/facilities_newcrod.asp 06.03.03
37
http://www.onesteel.com.au/ezysteel/facilities_newcrod.asp 21-02-03
38
AEGIS, Western Sydney as a Knowledege Hub, will be published at the Office of Western Sydney in 2003.
39
http://www.medfac.usyd.edu.au/divisions/schools/western.html 13.08.03
40
http://www.swsahs.nsw.gov.au/healthser/bnk/health/General.asp#Bankstown-Lidcombe%20Hospital 13.08.03
41
http://www.swsahs.nsw.gov.au/healthser/bnk/health/General.asp#Bankstown-Lidcombe%20Hospital 13.08.03
42
Some of the LGO are however outside the boundaries of Western Sydney
43
http://www.det.csiro.au/aboutus/aboutus.htm 29.09.03
44
http://www.medeserv.com.au/pmc/amcgrad/amcbooklet/amcbook_20.htm 28.09.03
45
Onesteel’s annual Review 2001 p. 25.
46
http://www.onesteel.com.au/annualreports/2002%20Concise%20Annual%20Review.pdf 24.02.03,
p8
47
Other areas include steel-making and environment protection
48
Onesteel Solutions, Issue one, November 2000, 24.02.03
49
http://www.uws.edu.au/seid/programs/engineering/cee/ctrg/default.htm , 25.03.03
50
http://www.hmr.net.au/don-corp.htm
51
Extracted from http://www.newcastle.edu.au/research/centres/cipar.html 26.06.03
52
http://www.hvrf.com.au/links.htm 21-02-03.
53
http://www.hunter.worldskills.com.au/sponsors.html
26
C. Martinez and M.Bjørkli
34