South Australian exports have continued to perform at around mid-term trend levels growing slowly, and continuing to be maintained by our traditional export of agricultural and mineral resource commodities – such as wheat, alcoholic beverages, iron-ore and copper concentrates. The majority of these exports are to Asia, demonstrated through five of the sixth largest export markets for South Australia being in Asia. Many of these export agreements are longstanding and have been developed over the past twenty years, with established large and medium sized South Australian firms.
The future of South Australian economic development is fundamentally supported by SME’s who in many cases are highly innovative and entrepreneurial. The imminent closure of Holden and the traditional automotive manufacturing industries in South Australia will need to be replaced with highly innovative, geographically networked companies if the South Australian economy is to continue to grow. These companies need to develop a long-term future beyond the comparatively niche domestic market, but more broadly within Asia.
A new generation of South Australian companies is now emerging, however they often lack experience in international markets and have sometimes out-dated or inaccurate perceptions of Asia. If South Australia is to grow its share of exports, then many more South Australian based companies will need to look to markets in Asia for opportunities. A recent report by PWC presented a worrying conclusion that Australian business is simply not succeeding in Asia. They demonstrate this lack of success by pointing to the higher levels of investment in New Zealand with its population of less than 5 million people, than in China (1.3billion) or India (1.1billion) or all of ASEAN that comprises 10 countries and a population of 650 million. Australian business, is not grasping the opportunities, and yet with the global economy re-orientating towards Asia and away from Europe and north America, Australian companies should be flourishing now that the worlds fastest consuming markets are in our region.
In 2013 the Australian government released the “Australia in the Asian Century White Paper”, which amongst other issues, identified the need for Australian companies to build Asian business literacy amongst employees, senior managers and boards. Despite our geographic proximity to Asia, Australian companies have not been able to take advantage of the opportunities in order to rapidly grow our market presence. The Australian government has continued to provide opportunities for Australian companies, through the signing of trade agreements across the region, which provide increased preferential trade access for Australian companies across Asia, which in many cases is currently not the case for our competitors in North America and Europe.
Australia has more preferential free trade agreements with Asia than other western economies, and this provides in many cases opportunities for exports with zero or much lower tariff rates than apply to comparative and competitor products from Europe and North America. This advantage in trade conditions wont last forever, and its is important for all South Australian companies to look for the potential opportunities in markets in Asia where we have this geographic proximity and trading conditions advantage. It is critical for long-term South Australian economic success that our companies can develop market opportunities, export growth and geographic networked relationships in these Asian markets. If South Australian companies are to take advantage of the opportunities emerging in Asia, then our employees, managers, and directors need to enhance their Asian business literacy, and develop a better understanding of Asian markets. Achieving Asian literacy is more than just learning the language (although it is an important component), but involves having greater awareness and experience of Asia. We need to employ employees and managers with Asian business knowledge, languages and skills. There is an added need to approach Asian markets with cautious optimism that although there are clear differences between Australia and Asia, there are many similarities, and the challenges presented are in many cases outnumbered by the opportunities. So build your Asian business literacy and take advantage of the real and tangible opportunities in our region – the Asian region.
Tips for Building Asian Business Literacy and succeeding;
- Remember that China is a large market
- Remember that Asia is not just China
- Remember that regional differences exist across Asia, and even within countries.
- Research the business opportunities for your industry in Asia
- Travel to Asia for business (not just on holiday)
- Study an Asian Language
- Employ graduates with Asian Language Skills
- Appoint board members with Asian business experience
- Engage experienced advisors in your target markets
- Find the market that best matches your product offering, not just the largest market
- Remember that doing business in Asia is different from Australia