The Australian Concept Car - cluster-based innovation can drive Australian export growth

Completion of the first Australian concept car project occurred early in 1999. This program was sponsored by the Australian Government’s Department of Industry, Science & Resources and involved around 140 Australian companies in the development of a concept car.

The car has since been taken on a world tour of 38 automotive exhibitions and shows. It has been viewed by over one million people and was separately shown at 12 automotive companies. The result to date is over $750 million and rising of export sales of Australian automotive components.

It was never the intention of the project to develop a car which would be considered for commercial launch in its own right. The program was fully intended to offer a showcase for Australian automotive components technologies and as such the car itself was used as a market- place "coat hanger" for the industry.

The manifest success of this approach, together with the opportunity for Australian innovation advantage offered by the concept car (when used as a marketing concept), is an approach worthy of replication in other Australian industry sectors. The Strategic Industry Research Foundation (SIRF) believes this model should be deployed more broadly to enhance Australian products sales across a number of export markets.

The idea of making a major Australian impact at overseas automotive exhibitions through the use of an outstanding operational show car came from Gary Millard of Millard Engineering. He understood how difficult it was for Australian-scaled companies to make a mark in the competitive international automotive business. Thus he devised the concept car idea as a way of gaining a collective impact across the industry and branding the venture as "Australian".

The Federal Government saw the possibility of having a total industry sector build a joint focus on export potential and supported the idea with seed funding. Our organization, SIRF, worked with the automotive component suppliers, and Millard as the designer, using its round-table approach to build a unified concept and design for the car. Project management also became a SIRF responsibility.

The opportunity presented by the concept car led many members of the concept car team to propose or devise leading edge component designs as part of the overall package. As a result, the car, when ultimately presented at exhibitions, was not just a showcase for Australian automotive component manufacturing capabilities, but demonstrated many leading edge concepts in automotive design and features. The overwhelming response at these world-wide showcases, was one of initial surprise and high regard for the formerly "unknown" capabilities of the Australian industry. This regard became an acceptance – both by automotive manufacturers and by the parent companies of the automotive suppliers represented on the car – that the innovative conception, design and engineering capabilities shown in many of the car’s components was at the leading-edge of world-class capabilities. Consequently, very significant export sales of Australian automotive components have already resulted – and with expectations of more to come.

The potential of the Australian concept car as an export market tool seems obvious in retrospect. However, it should be recognized that the scale of the Australian industry is sufficient (or, perhaps, ideal) for such a concept to work. There are enough suppliers to the Australian auto components industry to produce an entire car. On the other hand, the relatively limited scale of this Australian industry sector is also a success factor. By contrast, in USA, perhaps 10 cars would need to be produced to involve all manufacturers of auto components in some equitable manner.

Thus, an industry segment marketing concept, and the national branding of "Australia", may fit the scale and maturity of a number of our industries in a way that may be less effective for larger economies.

The concept car’s success now poses the question What other Australian industry sectors could benefit from a similar industry sector wide marketing concept? It seems to us at SIRF that there are quite a number of possibilities when we spend a little time considering possibilities.

We have explored preliminary ideas such as the following:

• Telemedicine – perhaps a concept ambulance or concept hospital ward of tomorrow
• Off-the-grid – a showcase for solar, fuel cell, geothermal and other alternative energy developments, perhaps in terms of rural households and including new approaches on reverse cycle heating/cooling, etc.
• Concept building
• Concept kitchen
• Concept food
• Concept food manufacturing
• Light weight train/tram
• Measurement – measurement/ instrumentation clusters, perhaps including www results distribution
• Light weight metals design
• Environmental technologies

Obviously, this list easily could be extended through a brainstorming process with a knowledgeable group.

Important aspects of a viable concept include its portability, design to scale for exhibition and yet full operability as a real world demonstration. However, the issue to be resolved for a next market concept is not just idea creation. A significant step is the championing of the idea by an industry leader (as Gary Millard did for the car). Following that, a critical phase is to rally support across industry segment companies, then to build a team which can develop a unifying concept, seek external (financial) support as necessary, and construct and implement a well-managed development program for the concept.

An early step is to gain a clear understanding of the origins of financial support for any of these concepts. While both of the Australian concept car programs have been supported by the Department of Industry, Science and Resources of the Federal Government, it may be that not all future market concepts need to be developed in the same manner. There may even be potential for a market concept company to be formed, perhaps funded by private capital. This could be a joint venture with Government.

In our discussions with various industry leaders and others, it is clear that there is a high level of interest in examining a range of other concepts which might be further developed as international marketing tools. Thus, SIRF would like to hold a series of industry segment round tables, with support from DISR and the Victorian Department of State Development, to build proposals for several concepts. We believe that this concept development phase should involve competitive aspects between aspiring industry segments in order to drive quality of concept. We see that the obvious prize is financial support for a full program to commercial launch and international exhibition.

Aspects of a competitive bid for a market concept should include:

• Potential for and scale of international market impact.
• Breadth of industry segment involvement in the concept.
• Degree of leading-edge innovation demonstrated.
• Commitment of team members to further phases of development.
• Quality of program plan to completion.
• How the industry segment company members each plan to take commercial advantage of international market opportunities presented through exposure of the market concept and export realization.

The last feature on the list deserves further comment. We believe that a final step for any one of these market concepts should be "deal closure". We believe that the first concept car could have taken a further step beyond its agreed end point. This would not have required any more exposure of the car itself, but would have been in terms of real deal closing support, especially for the smaller components suppliers on the team. It is our view that there was a real need for help to move negotiations to finalization with global auto companies. It seems to us that such skills are unlikely to be well developed within companies, which formerly had only an internal Australian market focus.