David Aylward

Innovation–export linkages within different cluster models: a case study from the Australian wine industry

This paper examines innovation and export linkages within different levels of cluster development. The aim of the paper, using empirical data from the Australian wine industry, is to demonstrate that the association between innovation and export activity intensifies as the cluster develops. Dividing wine clusters into ‘innovative’ (highly developed) and ‘organised’ (less developed) models, the paper uses selected core indicators of innovation and export activity to explore levels of integration within each model. This integration is examined in the context of Porter’s theory of ‘competitive advantage’, showing how these lessons can be translated to industry clusters in general.

Diffusion of R&D within the Australian Wine Industry

The Australian wine industrys popular image as a leader in R&D can indeed be substantiated. Its oenological and viticultural innovation and technical expertise have set new international benchmarks. The coordination of this R&D has ensured that the industry remains at the leading edge. However, the findings of this paper also substantiate concerns that this R&D is concentrated in what appears to be a South Australian R&D epicentre. Regions and wine operators not connected to this epicentre can be disadvantaged. This paper examines the diffusion of R&D to regional operators and suggests mechanisms for improvement of the current structure.

Towards a Cultural Economy Paradigm for the Australian Wine Industry

Abstract The twenty‐first century wine industry is a very different one from that which dominated operations in the 1980s and 1990s. Production, distribution and marketing of wine are now colonised by an array of complex and intersecting dynamics. Primary among these is a growing demand among consumers for value‐added qualities. Particularly in mature markets, standardised, commodity‐style wine is failing to satisfy an increasingly educated consumer base. What is required now among a number of New World producers is an understanding of the way in which wine’s cultural and economic qualities can be woven into a more enriched fabric. This would not simply add cultural elements to an economically oriented product. Rather, it would weave individual and community values, passion, care, identity, and terroir together with the more tangible aspects of production, distribution, price‐points and marketing. Such an enriched ‘fabric’ will be referred to throughout this paper as the cultural economy of wine. It will be argued that the Australian wine industry, as a case study, must not only reconfigure its operational structure to reflect these qualities, but must change the way it thinks collectively about its product if it is to remain competitive in an increasingly complex environment.

Global landscapes: a speculative assessment of emerging organizational structures within the international wine industry

Abstract As a rapidly evolving sector the international wine industry represents an interesting subject for analysis. Over the past two centuries the industry has experienced a number of major innovations and direction changes. The organizational shifts involved in these changes have been profound. From a monopolization of wine culture through the nineteenth and much of the twentieth century by Europeans, to the emergence of New World operators and their democratic influence, the international wine industry now stands at the edge of another major paradigm shift. This paper traces the industry’s historical changes and speculates on the implications of such issues as global production, distribution, technology transfer, branding and the escalation of mergers and alliances. It argues that with the increasing global tendency of the industry, ‘New’ and ‘Old World’ distinctions may blur and disappear. Furthermore, as the wine landscape continues to evolve, we may well see a new set of rules, where the emergence of localized branding, an enhanced role for small to medium enterprises and the decline of national industries results in an irrevocable reconfiguration of the industry.

Crafting a local-global nexus in the Australian wine industry

Purpose - To examines strategies that have locked the Australian wine industry into a price-sensitive, commodity wine market. The paper seeks to explain the inherent weakness of these strategies and their inability to address current challenges and opportunities. Design/methodology/approach - The paper uses empirical research data gathered from 100 SME wine firms. These firms were selected using a stratified random sampling technique. Four states were covered – New South Wales, Victoria, South Australia, and Western Australia – with all major wine regions in these states equally represented. There was careful sampling according to size, so that boutique, and small- and medium-sized firms were represented. Non-exporting firms were excluded. In each case either the CEO or the marketing manager was interviewed. Findings - The findings confirm the papers hypothesis, that increasingly the Australian wine industry has become risk-averse and locked into paradigms and organizational frameworks that are disconnecting from users and their requirements. The findings concur that greater differentiation of place, product, supply chains, and markets is required if the industry is to operate effectively within a multi-dimensional landscape and continue to attract sustainable returns. Research limitations/implications - The paper was based largely upon user perceptions about current and future industry developments. It would be extremely valuable if future research could align these perceptions with performance data at industry and firm level to provide a more convincing map of R&D activity. Practical implications - This paper has significant implications and policy advice for future industry organization. The most immediate and important of these is a strategy of emphasizing differentiated, regionally-identified products that target higher price-points in major markets. The industry has already indicated that it intends moving in this direction. Originality/value - The original aspect of the paper is its organization ecology approach to the industry, in which national parameters are replaced by a perception of global operating landscapes. In this sense, users are not only participants, but also spectators and interpreters. The paper should be of value to researchers, policy-makers and all industry stakeholders.

Reconfigured domains: alternative pathways for the international wine industry

The international wine landscape has undergone dramatic changes over the past 20 years. The two-dimensional wine industry models of the 1980s and 1990s, based on national set-perspectives, are failing to address the new and very complex landscape now emerging. A true globalisation of the wine industry is creating a myriad of challenges and opportunities for multinationals and SME wine firms alike. Most importantly, however, it is creating the need for a significant reconfiguration of national industries to accommodate the internationalisation of production, supply chains, distribution, marketing and consumption. This paper assesses and comments on these changes within an organisational ecology framework. It compares and contrasts the different organisational structures within New and Old World wine industries, examines their contributions to the internationalised landscape, and proposes alternative pathways within this multidimensional and fluid sector.

Australia as a Triple Helix exemplar: built upon a foundation of resource and institutional coordination and strategic consensus

Australia’s phenomenal success in developing as a global wine exporter deserves more attention from the point of view of economic and competitiveness strategy. Its success embodies the expectations of the Triple Helix that there will be institutions explicitly oriented towards developing end extending industry-relevant research, and that industry targets will be coordinated with public, collective aims. Australia stretches this framework even further by showing it can work on a large scale, with multiple layers of coordination, without alienating smaller and local producers. It reinforces the findings of other successful cases in this special issue by demonstrating the importance of a common long-term strategy, the value of an industry levy that funds research, the underlying social capital that makes coordination possible, and the importance of specialisation and marketing. Nonetheless, Australia’s wine industry also faces serious challenges that suggest a further evolution of its Triple Helix institutions will be required for continued success.

Demarcation: a dynamic methodology for quality grading within the Australian wine industry

Formal wine quality ranking has largely been a European phenomenon. While various publications and critics within new world wine industries conduct regular ranking exercises for wine taste or winery processes, these exercises usually target specific quality or taste elements, are often not particularly transparent, and are not comprehensive. n nIn Australia, the lack of a comprehensive ranking system is not simply an oversight. Wine associations have directed the industry along very different pathways from those laid out by their more traditional European peers. There has been a much greater emphasis on the role of the winemaker and technological experimentation, and a more egalitarian, generic branding regime. Until very recently, little value has been placed on factors such as terroir, heritage, regional characteristics, or appropriate and specialised vineyard management. n nThe author believes that the lack of a formalised and comprehensive quality ranking system for Australian wine is a deficiency that is now undermining the industry’s reputation both at home and abroad. The following paper provides the context for, and justification of, what is proposed as a dynamic, transparent, and multi-category wine ranking matrix.

Pursuing the creative: new pathways in the 'economy of wine'

The international wine industry is moving towards a pronounced phase of parallel distribution. Traditional approaches of mass and niche production have become more defined as globalisation creates discrete contours across the wine landscape and reconfigures cultural and economic characteristics that define this industry. The purpose of this paper is to focus on distinct qualities of the niche or creative wine sector and compare its approaches to those of the heavily populated mass or commodity sector. The paper will highlight the qualities of creative wine production by using five iconic winemakers as case studies. In focusing on their vineyard management and winemaking methods, and exploring their philosophies and value systems, the paper creates a template of cultural and economic characteristics that define the creative wine producer. It is a template that is adaptable and accessible, and one that may provide valuable lessons for those winemakers wishing to pursue a more sustainable path in the economy of wine.

High-value niche production: What Australian wineries might learn from a Bordeaux first growth

High-value niche production is reserved for the markets peak price-points. At these levels, rules of supply and demand change configuration. Manufacturers no longer compete on price, but instead are gauged against quality, uniqueness, reliability and prestige. As a result, their products are largely immune to economic fluctuations and offer alternative, often lucrative strategies for individuals and industry sectors as a whole. A sector in which the financial/cultural contrast between niche and mass production techniques is stark is the global wine industry. This paper examines the contrast by focusing on the Australian wine industry as a mass producer. The authors explore the current economic malaise of the industry and highlight associations between deteriorating product value and organisational structures. They then draw upon examples from one of the worlds iconic wine producers – Chateau Haut-Brion – to provide tangible and symbolic templates of successful niche production. The outcomes are recommen...