How Asian economic growth will benefit Australian manufacturers
There is no escaping the facts. It has been reported this month that by 2025, more than 60% of the world’s output growth will come from Asia. By the same year, it is forecast that alongside the USA, four of the top five largest economies in the world will come from that almighty continent: China, India, Japan and Indonesia.
By 2020, it is distinctly probable that the combined economic output of China and India alone will surpass that of Europe and the USA — and all of the advanced G7 industrial economies by 2025. To be sure, Asia’s growth and output already massively exceeds that of Australasia.
Emerging, symbiotically, are the consumers and spenders of the great continent — the wealthy and middle classes, the investors and moneylenders, the small businesses and global manufacturing corporations — driving forth the demand for greater goods and services. In short, the hub of international trade and global economic activity is soon to be swept away from its heretofore dominion of Europe and the USA, and reset its foundations on Australia’s doorstep.
Trading with Asia has never been more important if Australia is to benefit from such a favorable proximity. But so too is the significance of communication, and, more so, integration — socially, culturally and economically. A strong, two-way relationship must be established, re-established and sustained to ensure Australia’s continuing self-reliance, and — frankly — muscle, as this newly emerging giant rears up its head on our horizon.
So, you’re a manufacturer with decent domestic success. But what can you do, and what is being done, to protect your business from potentially being usurped by the growing powerhouses in Asia? Well, the government has created the Asian Century Business Engagement Plan (ACBE) to offer grants to small and medium-sized businesses, which will help organisations to harness commercial opportunities in Asia. These grants — worth between $25,000 and $300,000 — are merit-based and competitive, but could be key to gaining the access your company needs to the super-continent’s market space.
The ACBE’s key goals are to:
- help Australian firms access in-market business networks more effectively and develop relationships with business contacts in Asian countries;
- identify and secure more opportunities for Australian firms in regional value chains in Asia;
- strengthen business links between Australia and Asia;
- influence corporate Australia to initiate closer engagement with Asia;
- raise the profile of Australian business capability in Asia; and,
- increase awareness of Australia in Asia, and of Asia in Australia.
If you don’t already have an Asian strategy, then this is probably a good place to start — and now is definitely the time.
What’s Your Asian Strategy?
But this plan, born of the ‘Australia in the Asian Century’ White Paper, cannot be relied upon alone. As we know, governments cannot always be depended upon to follow through, and their pockets are only so deep. As ever, grant funded or not, it is down to Australian manufacturers to seek out and grow relationships with Asian markets and retailers. Two things hold the key: quality, and an understanding of the new market.
Whatever it is that comes out of your workshops and warehouses, one thing’s for sure: with a wealth of new competitors bustling for shelf space — and still more and more to follow — and with the new middle-class Asia becoming ever more discerning in its consumerist demands, the standard and consistency of Australian production has never been more crucial.
Get to know the market now, this year, and plan for your future success. Build your knowledge of Asian culture, and let Australia supply the furthest reaches of our region’s demands. Now is the time to broaden our focus and increase our understanding from within what is set to become the world’s most powerful and influential integrated community.
Yes it has come to us, but we must go to it.