Capitalising on the Asian Century
Capitalising on the Asian Century
It’s widely accepted that we are living through the first decade of the Asian Century – a period when Asia is predicted to continue its rise as a global economic power.
Australia is well placed to be part of the region’s growth story, but we must move beyond selling commodities and raw materials. Instead we should focus on creating and promoting the products and services Asia’s growing middle classes will soon demand. By 2030, consumer spending in Asia is expected to surge from $4.9 billion today to $32.5 billion, and its middle class will represent 60% of the world’s total.
The Asian success story is largely due to the fact that the countries and citizens of the region are highly motivated to improve their position and standard of living. Globalisation has demonstrated what is possible, but Western nations who are complacent or slow to act are being left behind. We only have to look at the economic stagnation in the US and Europe over the last five years to find proof of entire sectors struggling to compete with Asian value and innovation.
So how can Australia share in the future prosperity of the region?
At national level, I believe that first and foremost the government must ensure we remain an attractive place to invest and do business. That means developing infrastructure and housing, while getting the policy settings right around taxation, labour market flexibility and foreign investment. According to the latest Global Competitiveness Report from the World Economic Forum, we have plenty of work to do. Australia's labour market efficiency is now ranked 42nd out of 144 countries, falling from 13th in 2011-12, while we come in 103rd for the effectiveness of our taxation system, down from 66th in 2010-11.
At an entrepreneurial level, it’s all about genuine engagement in the region to understand the considerable differences between each Asian market and what drives its growing consumer base. This means going beyond traditional trade relationships to develop a genuine interest in Asian history, languages, and cultural life.
In the eighteen years to 2030, Australian businesses – particularly small niche businesses - will have great opportunities to provide skills and expertise in areas where we have a proven track record; like education, tourism, business and financial services, medical research, and high end agribusiness. To unlock that potential we must see ourselves as part of the region and be motivated to learn about and create products and services for Asian people. We can no longer rely on resources alone, assuming Asian nations will keep buying whatever we have to sell. Will we rise to the challenge? Or will history show another advanced economy left behind?
I’ll have plenty of time to reflect on this and other questions as I enjoy a long-awaited trip to Europe.
More thoughts to follow from the South of France!
Australia is well placed to be part of the region’s growth story, but we must move beyond selling commodities and raw materials. Instead we should focus on creating and promoting the products and services Asia’s growing middle classes will soon demand. By 2030, consumer spending in Asia is expected to surge from $4.9 billion today to $32.5 billion, and its middle class will represent 60% of the world’s total.
The Asian success story is largely due to the fact that the countries and citizens of the region are highly motivated to improve their position and standard of living. Globalisation has demonstrated what is possible, but Western nations who are complacent or slow to act are being left behind. We only have to look at the economic stagnation in the US and Europe over the last five years to find proof of entire sectors struggling to compete with Asian value and innovation.
So how can Australia share in the future prosperity of the region?
At national level, I believe that first and foremost the government must ensure we remain an attractive place to invest and do business. That means developing infrastructure and housing, while getting the policy settings right around taxation, labour market flexibility and foreign investment. According to the latest Global Competitiveness Report from the World Economic Forum, we have plenty of work to do. Australia's labour market efficiency is now ranked 42nd out of 144 countries, falling from 13th in 2011-12, while we come in 103rd for the effectiveness of our taxation system, down from 66th in 2010-11.
At an entrepreneurial level, it’s all about genuine engagement in the region to understand the considerable differences between each Asian market and what drives its growing consumer base. This means going beyond traditional trade relationships to develop a genuine interest in Asian history, languages, and cultural life.
In the eighteen years to 2030, Australian businesses – particularly small niche businesses - will have great opportunities to provide skills and expertise in areas where we have a proven track record; like education, tourism, business and financial services, medical research, and high end agribusiness. To unlock that potential we must see ourselves as part of the region and be motivated to learn about and create products and services for Asian people. We can no longer rely on resources alone, assuming Asian nations will keep buying whatever we have to sell. Will we rise to the challenge? Or will history show another advanced economy left behind?
I’ll have plenty of time to reflect on this and other questions as I enjoy a long-awaited trip to Europe.
More thoughts to follow from the South of France!
Posted by Doug Mitchell
