by Julie Shelton
According to a recent forum held by the Sunshine Coast Business Council, the increasingly wealthy and mobile middle class emerging in the Asia region is creating new opportunities for Australian business. But are we seizing those opportunities?
WHAT DOES THE ‘ASIAN CENTURY’ mean for the Sunshine Coast? This was the topic for five speakers at the forum, which was held at the Innovation Centre at the University of the Sunshine Coast and attended by more than 100 local business leaders and educationists.
The first speaker was the Hon. Jarrod Bleijie, Queensland Attorney General and Minister for Justice, who presented some striking statistics for China.
In 2012 China was home to 1.329 billion people with more than half living in urban centres. 12% are over the age of 60 and this figure will rise to 34% by 2050. China’s agriculture is declining – they are already concerned about food security and looking to invest in Australia, particularly the beef supply chain.
“The Chinese don’t know what we’ve got to offer – that’s why these trade missions are so important for the Sunshine Coast,” he said, referring to the recent trip to Xiamen led by Mayor Jamieson and Cr McKay, along with participating businesses from the tourism, education and training, food and beverage, and clean-tech industries.
The next speaker was Gwyn Jarrott from Sunshine Coast Business Council. He pointed out that by 2025, 60% of world trade will be in Asia, with the majority in China. As their per capita income rises, the Chinese will spend more on things we want in Australia: transport, health, education, restaurant and hotels, agribusiness and food, recreation and culture. This is where the opportunities lie.
What does this mean for the Hinterland?
“I feel the hair go up on the back of my neck when I’m asked that question – there’s a huge opportunity!” exclaimed Gwyn. “Food comes up as a very significant demand. Singapore, for example, relies on 90% of its food coming from elsewhere – why can’t that be from the Sunshine Coast?”
Gwyn suggested that Singapore is an easy entry for Australian businesses to get into the Asian market because Singaporeans speak English, they have English law and have connectivity with other markets in Asia.
This was reiterated by Andrew Foo, who was born and bred in Singapore but has called Australia home for the last 21 years. As Vice President of the Singapore Australia Business Council, Andrew pointed out that Singapore ranks number one on the World Bank’s ‘ease of doing business’ index (Australia is ranked tenth).
“Singapore is a good springboard into other parts of Asia – it has a friendly relationship with other parts of Asia as well as a friendly relationship with Australia,” said Andrew.
With more discretionary income, the Asian middle class are looking to source better food for better health and longevity.
“The only thing is the price – producers need to find the right combination of value and quality that justifies the price.”
When it comes to tourism, Andrew pointed out that most middle-class Asians are accustomed to a busy, crowded and noisy life with lots of eating and shopping.
“Sometimes the wide-open spaces and quiet of Australia can freak them out!”
He said importantly, Asians will travel for more than just pleasure, and believes a holiday destination, whether it is for business or pleasure, will be more attractive if it has a buzz, with a focus on celebration, fun, diversity and globalism. He specifically noted that food festivals are highly regarded.
“The Asian visitor increasingly looks for safety, security and connectivity. It must be convenient for them to move around, and a memorable experience. Agritourism and educational tourism would lend itself to this market.”
Nussara Smith spoke on behalf of the Queensland Government’s Trade & Investment unit. She alerted the audience to the fact that by March 2012, China had 63,500 millionaires whose wealth exceeded A$15.5M. Their average age is 41. This opens up investment migration opportunities, as the threshold for an Australian immigration visa is set at A$5 million.
However, she said we shouldn’t forget about other Asian countries. India is currently the world’s 11th largest economy, but is poised to be the 3rd largest economy by 2030. In contrast to China, India has a young population and potentially greater tourism opportunities.
ASEAN is another segment to watch. This geo-political and economic organisation is made up of ten countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Importantly, in 2015 these ASEAN countries are forming an economic community (AEC), which will translate into the free flow of goods, services and investments, lower business transaction costs and greater regional synergies.
She believes that opportunities in ASEAN lie in food and agribusiness, and anything to do with health. As an example, she pointed out that Thailand is one of the most successful export markets for health product company Blackmores.
Nussara advised prospective exporters to not treat Asia as a single entity – every country has different characteristics for doing business. There are a number of options for companies wishing to conduct international business in Asia, from export through to branch offices, joint ventures, franchising and mergers.
Each country in Asia will require a different approach. For example, it might be easy to export directly to Singapore, yet more appropriate to establish a joint venture in Thailand or license production in Vietnam. This is where her Trade & Investment unit can help.
In terms of services, Nussara says Asian people “will do just about anything to provide good education for their children”. Here, we can offer good education in a clean and safe environment and at all levels, not just tertiary. However, for Sunshine Coast’s education system to be more attractive, we need to make overseas students feel more welcome, and set up internship programs to give them industry experience while here.
The final speaker was Ted Pretty, Group Managing Director of Hills Holdings Ltd. With extensive international experience, he underscored the points made by previous speakers and offered his own riveting observations, the first being that the Sunshine Coast is “profoundly lucky” having a motivated local government keen to provide support to local industry.
However, Ted highlighted the loss of innovation in Australia, and the prescriptive nature of government policy over the last few decades. “It is not governments that innovate and grow, it’s business. Governments need to provide the infrastructure for business to do that,” he said, throwing down the gauntlet to several local and state politicians in the audience.
Ted says that the Sunshine Coast could become a centre for innovation and design – starting with design of new wellness, education and tourism experiences. But we need to get smarter and faster.
If we are going to lead in design, he said, we have to look at things through a different lens – innovation in design requires innovation in thinking. We need to think bigger and get out of the paralysis of whether we are doing it right. We need to “just do it”.
“Sunshine Coast is a great place to live, to work, to bring up children, etc. But it’s not about what you have here but what you do here,” he challenged.
“We (Australians) are not that unique. That is what we will compete against. We think the world is standing still – it’s not – it’s moving faster than we are.”
With a number of export agencies and international business mentors on the Sunshine Coast, and with the support of the Sunshine Coast and Queensland Governments, Ted says Asia is the place to be setting our trade sights. We just need to get on with it.