Asialink Business: Equipping Australian firms for success in Asia
Asialink’s new business initiative, Asialink Business, will better assist Australian business looking at opportunities in Asia, write Peter Kerr and Bruce Bayley.
Most Australian businesses are aware of the huge opportunities presented by the rise of Asia, and the rise of China in particular. But those opportunities can appear difficult to grasp, or are only achieved after years of seeking to understand entirely new markets.
Asialink Business has been established to equip Australian businesses – big and small – with the knowledge and skills to work with confidence in and with Asia. This new business capability division of Asialink is an initiative of the Commonwealth Department of Industry, The University of Melbourne and The Myer Foundation. It was first proposed in 2012 by the Asialink Taskforce for an Asia Capable Workforce, a high-level working group involving major corporates and industry associations, headed by ANZ CEO Mike Smith. Its purpose is to act as a ‘national centre for Asia capabilities’, providing executive education, research, and advocacy.
Asialink has been working for 23 years to promote Australia-Asia engagement and build Asia capabilities through government, business, schools, the arts, and community health. Building capabilities in Australian businesses has been a core part of our mission throughout this time, through dialogues, events, and our respected Asialink Leaders Program: a nine-month practical in-service course that helps aspiring leaders to understand and engage with Asia through expert seminars, working groups, and workplace projects.
These programs are being expanded through the creation of Asialink Business. Asia capabilities are crucial to improving Australian businesses’ performance in the region. A survey by the Australian Industry Group conducted for the Asialink Taskforce showed that Australian businesses are more likely to succeed in Asia if their employees have knowledge of an Asian language, experience in Asia, or have received cultural training.
Market research conducted for Asialink Business shows that over the past 12 months more than 30 percent of businesses have experienced challenges in Asia related to cultural understanding, building partnerships, or language.
The need to build Asia capabilities is most acute when engaging with China, which is our largest trading partner, the largest economy in Asia, and one of the world’s fastest-growing economies over the past decade.
In interviews with Asialink Business, business people from large corporates and SMEs alike have reported that China is, in their experience, one of the most challenging countries in which to set up a business and build partnerships.
The mining boom has made Australians acutely aware of the importance of exports, but compared with most wealthy countries our overall export performance is weak. In 2011, exports represented 21 percent of GDP. Among OECD countries, only the United States and Japan, with huge internal markets, exported proportionately less.
Our performance in trade in services is not as strong as might be expected given our location and services-focused economy, with most of our exports to Asia coming from bulk commodities. Although China is Australia’s largest trading partner, services represent only 6 percent of two-way trade.
If, as expected, demand for bulk commodities continues to ease, we will need to be prepared for what Asialink Taskforce Chair Mike Smith called ‘a rebalancing of the Chinese economy towards a less export-driven, more services and consumption based economy’. This will mean the need for an even greater focus on capabilities, because services require more person-to-person contact and networks in Asia. And as Asia grows in confidence, Asian business is less likely to accept ignorance of Asian culture and history or see Western mores as a default position.
Training programs help address this challenge by providing a basic understanding of how our own cultural background informs the way we work and key points of difference between cultures, for example in the area of negotiation or talent management. More detailed training programs will also be available through Asialink Business, including country specific programs providing advice on the legal and regulatory environment, employment laws, taxation and market entry strategies. Practical research – which is designed to be simple, informative, and reliable in order to aid management decisions – can help to quickly overcome lack of understanding of Asian markets. This is particularly important for those companies who do not have the budget to purchase advice from professional services firms.
The Australian education sector will play an important role in building capabilities for the future. Many education providers, especially universities and TAFEs, have longstanding relationships and physical presences in Asia and can provide an example by way of Asialink Business case studies to other sectors. Education providers are also expected to be important delivery partners for Asialink Business, as substantial knowledge exists in the area of Asia capabilities among universities, TAFEs and private training organisations.
Engagement with Asia, in particular China, means leveraging all the resources we have as a nation. Asialink Business will help to bring these resources together, with an especially important role for the education sector. ■
For more information, visit: http://asialinkbusiness.com.au
*Peter Kerr is Asialink’s NSW Executive Director. Bruce Bayley is Interim CEO, Asialink Business