The development of competitive industries: the role of state government actors

Despite widespread adoption of Porter's Industrial Cluster Theory as a policy development framework by federal and state governments over the past decade, Australia remains significantly below the OECD average in terms of its industries' economic contributions to real wealth creation (Brown 2000; OECD 1998). The major cause cited for this relatively poor performance has been inability of key government officials to implement effective industry policy that simultaneously avoids de facto protectionism and distortion of competition. This article provides an insight into the key policy decisions undertaken by the Tasmanian state government that coincided with development of an internationally successful shipbuilding industry in that state. As such, this article provides a reflection on policy initiatives that may be valuable for government officials elsewhere.