Technology Districts: A Growth Path for the Australian Wool Industry

Abstract

In this paper, the Australian wool industry is studied by analysing its current status and threats, the government's relevant industrial policies, and the associated problems. A competitive analysis of the Australian wool industry was carried out by investigating the comparative advantages and disadvantages of the wool industry. On the basis of these analyses, a wool-technology-districts model is developed. The model suggests that the Australian wool industry should be able to improve its competitiveness by establishing wool-technology districts and developing export-oriented multinational wool firms. The wool-technology districts should be established in Australia by developing an essential industrial infrastructure such as a production network, key collection of physical, capital, labour, and information resources for achieving technological flexibility and scarcity, and trade specialisation. The multinational wool firms should be in charge of the key functions in wool production, fabric-finishing, product development and design, and marketing of wool products to international markets. By establishing such technology districts and wool multinationals, Australia's comparative advantages can be fully utilised and its comparative disadvantages avoided. The exports of wool as a primary product will be transformed into exports of high-value-added manufactured goods, which will help to reduce Australia's deteriorating current deficit and overcome the threats of regionalisation in world trade.