In the Zone 2011
Focusing on core business and doing it as innovatively as possible is a key to remaining competitive in an increasingly tough global environment, according to Mr Sam Walsh, Executive Director Rio Tinto and Chief Executive Iron Ore.
Mr Walsh, speaking at the In the Zone Business Forum at The University of Western Australia today, said companies such as Rio Tinto had opted to concentrate on continuous improvement of core operations rather than pursue downstream opportunities.
Mr Walsh was taking part in a panel session entitled "Contours of Advantage: Innovation, Human Capital and Industry Focus". In this session, industry and academic leaders discussed the major changes that are transforming the macro and micro economic environments in which businesses operate.
The panel discussed the effects of technology and innovation on enterprises in the region and the fostering of human capital.
Professor Diane Stone, Winthrop Professor Political Science and International Relations at The University of Western Australia, said the issues of today and into the future transcended the tyranny of distance.
Mr Walsh pointed to a number of challenges for Western Australia and said creative solutions were required.
"To date resources such as iron ore and diamonds have been relatively easy to extract, but as we go on this will become more challenging," he said.
Mr Walsh said the resources industry was becoming increasingly innovative. "We are a sophisticated sector from mining tenement through to market - more sophisticated than some would believe," he said, adding that the development of Rio Tinto's world-first Operations Centre near Perth Airport had been a major step forward.
He flagged the need to retain operational excellence while maintaining a close watch on issues such as access to capital, and land and housing access, particularly in regions such as the Pilbara, where demand is outstripping supply.
Mr Walsh said access to skilled labour remained a challenge for Rio Tinto, a business that will grow by 50 per cent by 2015 due to a number of major expansion projects.
"We have the largest apprentice program in Western Australia. This year we brought 140 graduates into our business. We have 1,000 people in various traineeships and 1,000 Aboriginal people in our business. So it's not that we are not trying to develop skills within our business, it is the sheer size of our growth, which is exponential," he said.
Other important considerations included ensuring local content in the sectors supporting the resources industry; the competitive provision of goods and services; the leveraging of local research and development; and the need for streamlined and consistent regulatory support.
Mr Walsh highlighted the livability of Perth as being a key consideration for Western Australia's development and said the arts and cultural sector should be a focus.
"Perth is changing fast, growing in size and character. To continue to attract the best and brightest we need to offer real benefits to be the target destination rather than just a job destination," he said.
Mr Srikantan Moorthy, Vice President and Head of Education and Research, Infosys Technologies based in India, spoke of the need for public-private partnerships to address education and employment challenges.
Mr Moorthy described significant employability issues surrounding the 3.5 million graduates emerging from India's 25,000 colleges and 400 universities, with many of the 500,000 technology graduates not ready to work in the industry. He said cross-sector partnerships such as the successful Campus Connect model, in which graduates are introduced to workplace norms and cultures, were highly beneficial.
Mr Moorthy spoke of the role of innovative technology in addressing community connectivity, with India's 700 million mobile connections changing the landscape of how people interact with each other.
Professor Bernd Venohr, Consultant and Professor, Berlin School of Economics and Law, provided a German perspective of global business.
He pointed to the key characteristics of successful German export companies, of which approximately 70 per cent are family owned. Professor Venohr said profit was an objective of these companies, but not the main objective, with the long-term sustainability of companies being paramount.
A basic principle of "Made in Germany" companies is the formation of long-term relationships within the company and with customers and community stakeholders. These companies are customer focused, competitive and efficient, with strong quality management processes. Above all, they are highly innovative.
The In the Zone forum is a unique, intensive one-day meeting of 100 national and international leaders from the business, government and academic sectors.
With the theme "The Geography of Global Prosperity", the forum provides an opportunity for discussion and debate about the increasingly complex global neighbourhood and key policy questions facing Australia and the region.
The forum follows the success of the 2009 In the Zone Conference.
Sonia Nolan (ITZ Media Manager) (+61 4) 01 034 103
Janine MacDonald (UWA Public Affairs) (+61 8) 6488 5563 / (+61 4) 32 637 716