Launched with much fanfare in late October, the government’s Australia in the Asian Century whitepaper pledged to deliver “a roadmap showing how Australia can be a winner in the Asian century”1.
While Australian business has a long history of engaging with Asia, the paper put the spotlight on the potential of the world’s fastest-growing region, conveniently located right on our doorstep.
According to Treasury modelling, the opportunities on offer for Australian businesses are truly staggering:
• By 2020, Asia is expected to eclipse the economic output of Europe and North America combined to become the world’s largest economic power.
• By early next decade, the combined output of China and India will exceed that of the whole Group of Seven (G7) economies.
• By 2025, average gross domestic product (GDP) per capita in Asia is expected to have doubled. Four of the 10 largest economies in the world are forecast to be in the region, which will account for half the world’s output.
• Asia’s middle class will increase by more than 2.5 billion people by 2030, accounting for around 60 per cent of global middle-class consumption.
“Countries in Asia will demand a diverse range of goods and services, from health and aged care to education to household goods and tourism, as well as high-quality food products,” Treasurer Wayne Swan said in a statement.2.
Rather than simply counting our good fortune, the government has set a number of targets for Australia to achieve by 2025 to maintain competitiveness, including1.:
• Raising per capita GDP to $73,000 from $62,000 in 2012, putting Australia into the world’s top 10 compared to its current 13th ranking.
• Reducing red tape by putting Australia into the world’s top five countries for ease of doing business, and in the top 10 for innovation.
• Making the school system among the world’s top five, with all students to have access to a priority Asian language of Chinese (Mandarin), Hindi, Indonesian and Japanese.
• Improving the ‘Asia literacy’ of board members, with one-third of the directors of Australia’s top 200 publicly listed companies and government bodies having “deep experience in and knowledge of Asia”.
• Trade links with Asia to account for one-third of GDP, up from the current one-quarter.
On December 19, the government announced measures to boost Asian education, as well as draft guidelines for a $6 million Asian Century Business Engagement Plan.
Under the plan, grants of between $25,000 and $300,000 will be awarded on merit after a competitive application process (refer to www.austrade.gov.au).
Are you ready?
KPMG’s report, Australia in the Asian century: Opportunities and challenges, sets out a number of key questions for Australian businesses to consider their readiness:
• Are you clear on how Asia (and each Asian country) could directly or indirectly affect you over the next five to 10 years in terms of customers, suppliers, value proposition, competitors and people?
• Do you have a plan for taking advantage of the opportunities that could be explained to stakeholders?
• What are the extreme scenarios that could impact your business?
• What can you learn from the Asia experiences of others inside and outside your industry?
• How Asia-ready is your leadership team and board?
• How is Asia important to your business in terms of language, cultural awareness or relationships?
• What are your relationships with Asia and which do you need to build?
With the whitepaper highlighting the opportunities, the challenge for Australian businesses is to become the real winners from the Asian century.
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This article represents the views of the author only and not those of American Express.
Anthony is a communication consultant at BWH Communication and a freelance writer with 15 years' experience in the stockbroking and media industries of Australia and Asia. He is a regular writer on business and other issues for publications in Australia and Japan. He consults on communication strategy to businesses ranging from private enterprises to professional service firms and publicly listed companies, with a particular interest in entrepreneurship in all its forms.