In April 2012 Greg Dodds and I posted an article on this blog ‘The Australian Century and the Australian smoko’. We argued that while we responded well to the opportunities in Asia for over a decade in the 1980s, we went on ‘smoko’ from the mid-1990s. There was widespread complacency and fear of Asia was promoted. The result has been two decades of failure by business, universities, schools and the media in equipping ourselves for the region. That complacency is still with us and the fear of Asia is promoted by ministers like Scott Morrison.
Another report has just been recently published which highlights our complacency…
A recent survey prepared by PwC and reported yesterday by the Financial Review has given us more bad news. PwC undertook a survey of 1,000 Australian businesses. It found
- Two thirds of Australian companies have no plans to change their approach to doing business in Asia despite the urging by the government and others.
- Only 9% of Australian businesses have any sort of operation in Asia and only 12% have had any experience in Asia at all.
- Whilst about a half of large companies are doing business in Asia, only 23% have staff on the ground ‘in market’ and for those companies with an Asian strategy, the total contribution of it to their bottom line was only 12%.
- Australian companies last year invested more in New Zealand than in all of the ten countries of our South East Asian Region.
PwC partner, Andrew Parker, said ‘If Australian businesses want a place in future global supply chains and to participate in the growth of intra-Asian trade, we will have to dramatically lift our engagement and investment in the region. Unfortunately Australia is way behind. Asia is passing us by and we need to act now. This may well be our last chance’.
Australian business profits are booming. Dividends are at record levels. Some major Australian companies are spending their cash in buying back shares. Most Australian companies are awash with cash. But the clear evidence is that they are not prepared to take risks and invest and trade in the fast growing economies of our region.
In earlier blogs, I have drawn attention to the same disquieting facts.
- I have yet to learn of a single Chairperson or CEO of any of our major companies who can fluently speak any of the key Asian languages. There are now tens of thousands of Australian born citizens of Asian descent in our universities. But they are unlikely to break into the ‘white men’s clubs’ of our company boards.
- In late 2013 the Business Alliance for Asian Literacy, which represents 400,000 businesses in Australia, found that ‘more than half of Australian businesses operating in Asia had little board and senior management experience of Asia and/or Asian skills or languages’.
- Tourism has been booming, but we don’t get much repeat business. We skip from one new market to another, first Japan, then Korea and now China. If we are not getting repeat business it suggests there is something wrong with our product.
- Many young Australians I knew studied Asian languages in the 1980’s but could not find work with Australian companies. They drifted off to Hong Kong and other Asian cities where their skills were valued.
The clear failures in our business sector to equip itself for Asia are even more obvious in our media which is still chained to our century old links to media houses in the North Atlantic.
We talk endlessly about the business and other opportunities in our region, but we sit on our hands when it comes to do anything serious on the subject.
The government takes pride in trade and investment partnerships that it has finalised with Japan, ROK and China but where are the business people to take full advantage of these new arrangements?