Australia and Asia: Growing integration

Source: PwC Melbourne Institute Asialink Index, 2011

“Australia has more trade and other economic relationships with East Asia than any other

country save for Indonesia” John Denton, May 2012

Americas Europe Asia

60,000

40,000

20,000

0

CAGR +5%

2020

34,176

2011

22,454

40,000

20,000

0

CAGR +5%

2020

41,438

2011

26,684

60,000

2020

44,605

2011

20,874

CAGR +9% 60,000

40,000

20,000

0

Note: In current prices, with 2011-2016 cumulative annual growth rate trend assumed to continue from 2016-2020 Source: IMF World Growth Projections

An Asian Century: Rapid growth

“Australia must find its security in Asia, it cannot find its security

from Asia” Paul Keating, November 2011

Year Year Year

Re

gio

n G

DP

(US$

bn

)

Re

gio

n G

DP

(US$

bn

)

Re

gio

n G

DP

(US$

bn

)

Australia’s Competitiveness: Middle of the pack

Source: Business Council of Australia’s Submission to the White Paper on Australia in the Asian Century, 2012

Asialink / Ai Group / BCA research: Australian businesses understand the opportunity…

Respondents (%) 100

60

20

40

80

0

No interest

Some interest

High or very high interest

Businesses surveyed

26

32

42

74% of businesses report interest in engaging or further engaging with Asia

China the priority, but a wide range of other countries also considered

80

30%

26%

65%

36%

33%

27%

39%

% businesses surveyed

60

Taiwan

33%

20 0

Thailand

Malaysia

India

China

Indonesia

Vietnam

Singapore

40

Source: Australian Industry Group & Asialink Survey, March 2011

Source: Australian Industry Group, BCA & Asialink Survey, February 2012

Businesses with more Asia experience at

the senior management and

executive leadership levels report better business outcomes

in Asia

Asialink / Ai Group / BCA research: …and Asia capabilities improve business performance…

Asian experience Language ability

Source: Australian Industry Group & Asialink Survey, March 2011

Less than half of businesses with dealings in Asia report having any Board members or senior executives with Asian experience or language ability

Asialink / Ai Group / BCA research: …yet many businesses report being underprepared

Asia Capable Workplace Framework

BASIC PRACTICE STANDARD PRACTICE BEST PRACTICE NEXT PRACTICE

Strong Leadership and Vision

Senior management deals with the organisation’s Asian operations on an ad hoc basis

Senior management engaged in Asian operations, but not as major focus

Senior management committed to Asian operations with a long term outlook and strategy

Talent Development and Retention

Qualified management and employees but without clear understanding of Asia business culture

Organisation has management and employees with ‘Asia skills’ but is not drawn upon and developed effectively

Management and employees are culturally competent and given opportunities to enhance their skills

Productive Local Partnerships

Organisation builds up local presence in Asia from scratch through its Australian staff

Organisation uses networks to engage Asian business partner and puts Australian managers on the ground

Organisation invests in a long-term partnership with respected Asian business and trusts local Asian staff to make decisions

Aligned Internal Culture

Staff are not engaged in the organisation’s Asian operations or do not see their value

A portion of staff involved in Asian operations understand their value, but without link to overall company strategy

Staff as a whole believe in importance of Asia and see Asian work opportunities as valuable experience

Requisite Knowledge of Local Environment

Management have little to no knowledge of political context in which Asian business operates

Management are aware of the complexities of the local business environment but unsure of how to navigate

Organisation works with trusted local partner or intermediary that effectively navigates complex business environment

Supportive Systems and Processes

Organisation does not capture experiences or learnings from Asian operations

Management communicate the issues and learnings from Asian engagement internally but in an ad hoc manner

Skills and experiences from Asian engagements are embedded in future business practices

Source: Australian Industry Group, BCA & Asialink Survey, February 2012

Surveyed businesses prefer executive education and

provision of best practice research to

other Asia capability-building

services

The Business Sector: Opportunities for investment