A basket of opportunities are being opened up across the Asian region.
However, Australia faces intense global competition for Asia’s markets. If we are to succeed we need to benchmark ourselves against international players who are also galvanizing their business, government and community sectors to seize this opportunity.
Asia is not just an export market. Australian companies must make a shift from seeing themselves as ‘exporters’ into Asia – into becoming Asia-Pacific companies that are physically and culturally embedded in the region.
Our companies need to see themselves as part of the regional Asian economy and not just the Australian economy.
Boards must ask, “Do we have a capability in Australia that would be highly valued in Asia?”Linfox and Leighton Holdings were early movers into Asia and are reaping the rewards.
Given the high cost of our labour, Australia needs to compete on quality rather than scale. A good example of this is Germany, a country that has done very well in China, despite its high cost. We must compete in innovative niches rather than globally tradeable segments.
Success in Asia will only come with a contemporary understanding of the region – for which a widespread mind set shift is required across all segments of our society, not just in pockets of business and academia. A key risk to avoid is getting bogged in the quicksand of complacency, indecision and short-term thinking in relation to entering Asian markets.
Local competition is very strong and must not be underestimated. There are more English speaking graduates in engineering, technology, sciences coming of Asia than the Western world.
We need to turn traditional thinking about Asia upside down – from the boardroom to the factory floor. We are currently at risk of superficial engagement and anachronistic thinking. Fundamental within this shift is a respect for our Asian counterparts and an accurate understanding of their core strengths and capabilities.
THE NEXT WAVE OF OPPORTUNITY
Now that the resources boom is slowing down, the next wave of opportunity lies in pushing our services know-how to power Asia’s growth. Brand Australia is powerful in Asia across many sectors. This is an asset we must leverage.
There lies a golden opportunity for Australian businesses with specialist skill sets that are sought after in Asia. We have highly qualified, sought after services expertise in a range of areas where Asia has a compelling need. Australian project management skills on complex infrastructure projects are considered world class.
However, the services opportunity in Asia is not well understood and underestimated in Australia.
Consulting engineers, architects, designers, project managers, environmental specialists, aged care professionals should consider looking towards Asia for opportunities over the next decade.
It is too simplistic to think that geographic proximity alone will help us win markets. A winning strategy is to focus on differentiation and being an expert within a niche. However geography does offer some advantages. Being in the same time zone brings enormous efficiencies. Shorter flights result in less wear and tear on people. Such proximity creates the backdrop for greater sustainability in our investment and trading relationships.
A vast number of Australian companies are under-invested in the region from a financial, cultural, emotional and capability perspective. Successful companies are those that build highly localised organisations with a local workforce.
The core of the Chinese operating system is built around the strength of relationships. Nurturing these relationships is vital.
Unless you have your Asian counterparts’ mobile number and can exchange SMS comfortably at any hour of the day, you do not have a relationship. If you are invited to their daughter’s wedding you can be assured your relationship is valued.
THE FUTURE FOR AUSTRALIA
“The Lucky country” is yesterday’s tag line. Our future will lie in our ability to “Power Asia’s growth”.
China’s investment phase was a windfall that was of enormous benefit to the resources sector – creating a two-phase economy. Our future prosperity will not be guaranteed by China’s appetite for our resources.
China is rebalancing its growth – with an emphasis towards consumption of goods and services. This has an enormous impact on the Australian food, consumer goods and services sector.
This is the century for water and food security – and Australia is well placed to seize the opportunities. We have the opportunity to become the ‘food bowl of Asia’ but we will need to address some critical capacity issues before we are able to turn this dream into a reality.
Our advanced expertise in water management and environmental sciences also places us in a strong position to assist the globe in solving some of the environmental challenges we are faced with.
We have a ready resource to assist us in our charge into Asia. Australia enjoys the benefit of large ethnic communities who have integrated into our population. We need to engage our local Australian-Asian communities in our policies and strategies. These individuals have in-built insights into the region and capability that has so far gone unrecognised. They have the potential, the language skills and the cultural knowhow to act as the bridge between Australian and Asian businesses. Our international student population is also undervalued, even though many come from high net worth families who may one day chose to invest in Australia to secure the future of their next generation.
With the help of Asia-capable advisors and better utilisation of existing human resources within our communities, Australian businesses can step-up to meet opportunities and challenges presented by the Asian Century.