Clone development

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KNOWLEDGE BASES INNOVATION
Clone development
Climate controls/ monitoring
Vineyard software management
Rootstock development
VITICULTURE
Virus diagnostics
Integrated pest management
Canopy management
Harvesting methods
Irrigation and drainage
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Unique cepages blends
Maceration
Soft equipment
Barrel ageing
VINICULTURE
Yeasts
Quality testing
Temperature controls
Hygiene
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Appellation and quality standards
Vertical integration
Premium contracts for grape growers
Tourism and hospitality
ORGANIZATIONAL MARKETING
Wine competitions
Brand development
Wine education
Online retailing
Exports
Mergers and acquisitions
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The SA wine sector in the apartheid era

• KWV controlled prices and surpluses through quota
  system
• Production focussed on maximising yields
• Standardised production methods
• KWV sole exporter, marketer, distributor
• Exploitative labour practices
• Stagnant domestic market

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Learning to Change 1994 - 1999

• Quota system abolished end 80s
• Sanctions lifted
• Competency gaps in marketing revealed
• KWV converts to a company leaving a void
• Dramatic increase in exports
• Limited industry coordination and strategic
  planning

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The Emergence of a Strategy 1999 2003

• Focus on quality and terroir
• New regions and new players established
• Planting change in line with world trends
• Co-ops converting to companies
• Winetech launches Vision 2020
• Wosa focused on building Brand South Africa

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Innovation

• Production terroir focussed
• Labour intensive viticulture
• Strong soil science knowledge
• Winemakers combine modern technology with tacit
  knowledge
• Significant investment in cellar upgrades
• Create unique South African cultivars Pinotage
  across between Pinot Noire and Cinsaut
• Brand South Africa
• International distribution
• Funding for research and development
• Increasing skills of labourers and managers

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The Chilean Model

• Foreign Direct Investment Flows
• 1975 - 2001 118.1 million
• 1990 - 2001 94.5 million
• (origin US, Canada, France, Spain)
• Knowledge Flows
• Foreign Oenologist, French, at the beginning
• Flying Winemakers
• Highly skilled national Oenologists

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Contradictory performance of the Chilean
innovation system

• Strengths
• 1. Rising degree of knowledge intensity
  primarily embodied in capital goods, and
  partially stimulated by the massive flow of
  foreign investment.
• 2. Remarkable capacity of technological
  absorption and adaptation, based on the presence
  of dynamic leading firms, skilled human
  resources, and initial constructive
  public-private sector interaction.

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3. Dynamic and increasingly articulated
industrial structure 4. Quality Regulatory Body
(SAG) 5. Expansion of export markets and
increased export price per unit 6. Increase of
fine grape plantations 7. Innovation in wine
cepages viniculture carmeniere
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• Current weaknesses
• 1. Low degree of cooperation and interaction
  among wine producers
• 2. Lack of institutional support (e.g.
  Prochile) and of coordination among the
  different instutional actors (e.g. SAG,
  associations, universities, etc.)
• 3. Low Investment in Marketing Promotion
• 4. Good quality but low price niche market
• 5. No endogenous research or technological
  Development

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POTENTIAL ADVANTAGES OF CLUSTERING

• OPPORTUNITIES FOR LINKAGES
• COLLECTIVE EFFICIENCIES
• POSITIVE EXTERNALITIES
• EVEN WHEN THESE POTENTIALS ARE REALIZED THE
  CLUSTER MAY NOT BECOME A DYNAMIC INNOVATION
  SYSTEM

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ANALYZING INNOVATION SYSTEMS
ACTORS
LINKAGES
POLICY
KNOWLEDGE

LEARNING
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The Paradox Number of wineries increases to
over 80 But small wineries do not grow A
surplus of vinifera grapes appears despite the
marketing board Wine output grows from
645,000 litres in 1991 to over 3.9 million litres
in 2002   Value of VQA wines sales increased
from 5.6 million dollars to 50 million dollars
between 1991 and 2002 But Ontario wines lose
market share in the domestic market Exports do
not grow  
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Ideal natural conditions and timing

• No phylloxera
• No plagues and fungi (low humidity)
• Sunshine and high luminosity
• Low labour costs
• Rising external demand for quality wines
• Increasing number of new entrants, despite the
  hegemony of old world producers
• Consumer sympathy for new world wines