New markets
Monday, 22 October 2007
Last Updated: Monday, 5 November 2007
In this section:
There are now few formal barriers to doing business in New Zealand and the few barriers left are being cleared away, New Zealand Prime Minister Helen Clark told a Trans-Tasman Business Circle lunch in Melbourne yesterday.
“We want to reach a point where a company in Auckland can do business in Melbourne as easily as it can in Wellington,” she said.
The to-do list includes:
- Doing away with unnecessary transaction costs.
- Making it easier to offer securities in both countries using the same offer documents and structure.
- Simplifying cross border insolvency procedures.
- Making trans-Tasman company registration easier.
- Making it easier to ban directors in one country when they have been banned in another.
- Looking at the portability of private retirement savings across the Tasman.
- Considering an investment protocol.
Clark says New Zealand, which has had near continuous growth for a decade, predicts growth of 3.1% for the year to March 2008, with a slowdown in the economy last year bottoming.
She says New Zealand exporters have shown extraordinary resilience to interest rates and monetary policy designed to curb inflation (the official NZ interest rate is 8%.)
She has also named 2007 as the Year of Exports with the country’s budget tax reforms (corporate tax rates are now 30%) and R&D changes (tax credits of 15% of eligible expenditure) aimed at promoting investment, R&D and export.
– Amanda Gome
Back to top
It's official: Japan is back
The Bank of Japan has ended its fight-deflation first policy of nearly half a decade and the country can now expect a return to economic growth with moderate price rises, with many commentators expecting a modest rise in official interest rates.
This is important for a world economy that has had to expand on one less cylinder given Japan’s sluggish recent past.
According to The Lowy Institute, the Japanese economy is now in its longest uninterrupted expansion since the late 1960s, real GDP has averaged over 2% growth a year since mid-2002, and in last calendar year, Japan achieved 5.5% growth.
But what does this mean for Australia? Plenty. After all, despite the rise of China, Japan is still Australia’s number one export destination. Australia exports more than $34 billion worth of goods and services per year to Japan and the Australia-Japan two way trade relationship is worth almost $54 billion.
There are four reasons why Japan is back on the radar of Australian exporters.
First, Australia and Japan have just announced the commencement of negotiations for a free trade agreement this year.
Research jointly commissioned by Australia and Japan found that full and immediate trade and investment liberalisation could potentially bring gains of $39 billion and $27 billion to the GDP of Australia and Japan respectively.
Second, as many economists have noted, there has to be an increase in consumption in Japan, and that will mean more opportunities for Australia in Japan’s vast and sophisticated consumer market.
Third, there is likely to be a new wave of reform as Prime Minister Abe continues the reforms of recently retired Premier Koizumi.
A new wave of “Koizuminomics” under Abe has the potential to really open up the economy. With a return to growth, strong export performance and cleaned-up balance sheets and the slaying of deflation, the environment in Japan will be much more conducive to microeconomic and institutional reform.
In particular, there is scope for reform in several previously “untouchable’ parts of the Japanese economy – particularly in the services sector. There will be opportunities for Australian exporters in the health, education and the lifestyle sectors.
Fourth, Japan’s unique demographics should also create export opportunities at both ends of scale that are particularly suited to Australia.
At the young end of the market, consumer products like surf exports are booming, with Japan being the number one destination for Australian exports such as water skis, surfboards and water sports equipment (accounting for over a third of a $21 million market).
At the other end of the scale, grey power in Japan is still doing its bit for our export account as well. Japan’s ageing population - especially older women - have big spending power.
In short, if you thought Bill Clinton’s “soccer moms” were influential, wait until you see the economic power of Mrs Hashimoto and her neighbours.
Open an office in Japan
The crucial factor to determine the success of Australian companies in generating more export opportunities in Japan is the need for businesses to establish a presence there. Despite the fact that more than 3500 Australian companies currently export to Japan, fewer than 100 have offices or investments.
Australians in Japan say the lack of local business presence puts Australia at a disadvantage.
According to research by Austrade/Sensis, around 14% of exporting small and medium sized enterprises sell to the Japanese market (which has jumped up from 12% a year ago). However, given the more benign economic environment in Japan, with an increased emphasis on consumption, there’ll be plenty more room to move in the Japanese market, especially if the services industry reforms kick-in.
Some key facts on Australia-Japan trade
- Japan is Australia’s No. 1 export market at $31.5 billion or 18% of total exports (2005 calendar year) or $34.5 billion in 2005-06.
- Japan is Australia’s No. 1 trading partner at $50.6 billion or 14% of total trade (2005 calendar year) or $53.9 billion in 2005-06.
- Japan is Australia’s No. 3 import source at $19.1 billion or 10% of total (2005 calendar year).
- Australian minerals and energy exports to Japan were worth $21 billion in 2005-06.
- Japan is Australia's largest market for coal, aluminium, LNG, LPG and copper ore as well as beef and dairy products.
- In December 2005, Japan was Australia’s third largest source of foreign investment (total investment valued at $53 billion) and Japan is the fourth largest destination Australian outward investment.
- Japan is Australia’s third largest source of tourists, with 674,400 Japanese visiting Australia in 2005-06.
- Japanese companies employ more than 200,000 Australian workers.
- Over 3600 Australian businesses export to Japan (goods, in 2005-06) and 14% of all Australian SMEs export to Japan.
- Some key Australian players in the Japanese market – Macquarie Bank, Servcorp, ResMed, 33 South.
Back to top
By Tim Harcourt
It is often said that Australian-Indian relations are based on the “three Cs”: Cricket, Curry and Commonwealth. Indeed, on my visits there I can barely get through the airport without being accosted by cricket tragics among the airline staff, who want to engage me in all aspects of the game — whether it be Test, one day, or even domestic cricket.
They say things like: “You are from South Australia? Yes, I know Ian Chappell, Rodney Hogg, Darren Lehman, Jason Gillespie, all very good players sir …”
But a recent development has actually expanded Australian-Indian sports connections beyond the great game of cricket. In the game of basketball, Australia’s greatest boomer (and Olympic flag bearer), Andrew Gaze, has just announced a strategic partnership between his company, Australian Basketball Resources (ABR), and the new Indian sports company Jus Sportz.
It will see Australian basketball brands — mainly sportswear, footwear and memorabilia — sold throughout India. Jus Sportz will launch four stores in southern India by March 2007 and plans to expand to 20 stores across the sub-continent within five years.
Jus Sportz director C Sivakumar says India’s growing love of sports and all things Australian makes it a very natural fit for his company. “Most of our favourite sports icons are Australian and Australian brands enjoy a strong reputation in India. With phenomenal growth in sporting retail sales in India, it makes sense for us to take the best of Australian sporting brands directly to the customer.”
In fact, Gaze himself sees his role as pioneer in terms of giving Australian sports brands a “beach-head” into the growing Indian sports retail market. “The new deal will create opportunities for more Australian companies to expand their operations into one the of the world’s fastest-growing developing country economies, with a relatively low risk and great exposure,” Gaze says.
He is not alone as an Australian sports exporter in India. In fact, when I travelled to India on a recent trade delegation, I noticed a number of Australian sports exporters on my direct Qantas flight from Sydney to Mumbai, including Albion, a manufacturer of cricket helmets and the baggy green cap.
Albion’s general manager, Ross Barrat, told me: “We see India as a major source of expansion for our product. We were founded in 1947, the same year as India’s independence, and see our future wrapped up with India’s just as we have a shared history.” Barrat says Albion’s ability to innovate has been a key part of its success as a company and as Australian exporter.
“I feel the invention of the Albion cricket helmet during World Series Cricket in the 1970s is similar to the invention of the Hills Hoist, the “black box” flight recorder, the Cochlear ear implant or the baby seat capsule for cars: an example of Australians being innovative and looking to make the world better but also safer.”
Mike Moignard, Australia’s senior trade commissioner in New Delhi, says there should be many more opportunities to put Australian sporting brands in the hands (and on the feet, backs and heads) of Indian consumers. He estimates the Indian retail sports market “to be worth close to $310 million”.
Why India? One reason is the growing middle class of about 300 million people and a growing purchasing power of an estimated $A85 billion. Further, the economic reforms started by former Finance Minister (now Prime Minister) Dr Manmohan Singh in 1991 has really opened up the Indian retail market to Western tastes in food, fashion and entertainment while strengthening and expanding India’s strong culture to the rest of the world (look at Bollywood’s influence).
This means that Western retail brands, including Australian companies like Gloria Jean’s Coffees and Cookie Man, are doing well in Indian retail markets through franchising arrangements.
Australia-India trade ties are certainly growing. Over the past five years, Australian exports have grown faster to India than in any other of our top 30 markets. However, there is still plenty to do in terms of expanding and diversifying our export base because only about 1500 Australian companies export to India (half the number that go to China and about the same number that export to the United Arab Emirates).
Sport is one way to get into the burgeoning Indian retail market — whether it be basketball, cricket, hockey or football. Of course, there will be great opportunities ahead with the Commonwealth Games being held in New Delhi in 2010.
And with so much Indian business interest at the Commonwealth Games in Melbourne in 2006 (with one in five business visitors being from India, according to Business Club Australia) let’s hope there’s similar Australian interest in India when New Delhi gets its turn.
Doing business in India
- Australian goods exports to India: $7387 million (key sectors: non-monetary gold, coal, copper, wool), 2005-06.
- Australian services exports to India: $1415 million (key sectors: education, tourism).
- Australian-India two-way trade: $8627 million, 2005-06
- Key growth sectors: non-monetary gold, coal, education, tourism, franchises in consumer/lifestyle products.
- Number of Australian businesses exporting goods to India: 1463.
Source: DFAT, ABS, Austrade.
Tips for new exporters
First, do your homework. The sub-continent is a rich and enthralling place but it is not a monolith. For example, the Delhi market is very different from say, Chennai in the south, or Mumbai in the west. So target your market carefully, looking at consumer trends and tastes by regional and the strength of the competition from locals or other international players.
Second, take advantage of the local knowledge provided by Austrade. Mike Moignard and his team in India have a network that covers Chennai, Hyderabad, Mumbai, New Delhi and Kolkata as well as Pune and Chandigarh. Austrade can also help you deal with India's regulations. Remember that India has a federal system with many government agencies to deal with at federal, state and regional level.
Third, once you have done your research, and have some contacts lined up via Austrade India, you have to take your own “passage to India” because the sub-continent’s economic miracle is worth seeing for yourself.
Finally, if you like cricket, do try and catch a local match, especially a Test or one-day international. I have been to cricket matches all over the world and India ranks with the West Indies in its devotion to the game.
And if you are lucky enough to be there when Australia is playing India, find out whether your business contact there likes cricket. If not, you might snap up some cheap tickets; if so, make sure they look after you.
Tim Harcourt is the chief economist of Austrade and the author of Beyond our Shores. www.austrade.gov.au/economistscorner
Key contact in India:
Mike Moignard
Senior Trade Commissioner
Australian Trade Commission
1/50 G, Shanti Path
Chanakyapuri
New Delhi 110 021
INDIA
Email: india@austrade.gov.au
Within Australia:
13 28 78
www.austrade.gov.au
Email: info@austrade.gov.au
Back to top
By John Cook
Exporting is tough for small business, but there are plenty of successful ventures that sell their products throughout the world. New free trade agreements under negotiation with China, Malaysia, Chile and Japan promise to open up more opportunities for growing SMEs.
Australia has recently signed FTA deals with the United States, Singapore and Thailand. The first incarnation of an FTA with New Zealand was established in 1966. But there are plenty of more moves afoot, and therefore lots of opportunities for small business to export.
The Federal Government is negotiating an agreement with China, as well as being at various stages of discussions regarding FTAs with four other countries: China, Malaysia, Chile and Japan, and the Gulf Cooperation Council (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).
It is also conducting a joint study with South Korea regarding the feasibility of a similar agreement. Australia and New Zealand are also negotiating an FTA with ASEAN (Association of South-East Asian Countries). It is conceivable that Australia could one day have FTAs with almost every country in Asia.
FTAs are thought to remove or lower common barriers to trade, such as tariffs. But the ability to quickly enter new markets because of the FTAs is also a big plus for small businesses as is the removal of licensing requirements and even a reduction in paperwork.
Though there are many benefits, one problem for small business is that the FTAs can take a long time to negotiate. “We need to be fast moving as a small business,” says Bruce Sambell, the owner of Queensland aquaculture company Ausyfish. “We want to get into new markets quickly, but often it is difficult to move because of all the restrictions on trade.”
Ausyfish exports fish larvae to several Asian countries, such as China, Malaysia and Vietnam. Sambell would welcome less red tape and endless amounts of forms he has to fill in, if that is what an FTA would bring.
Such an agreement could help export into China, which has been affected by onerous Chinese health and biological regulations. At the moment Sambell sends the larvae to Hong Kong, for transport into China. He would welcome an FTA if it brought closer cooperation and understanding between Australian and Chinese food authorities.
Another exporter, Denis Tricks of Victorian company Longford Flowers, would also welcome less paperwork. His business exports flowers to Japan. Tricks says tariffs on flowers sent to Japan are not onerous (he is more concerned at the moment about the high value of the Australian dollar against the Japanese yen and high transportation costs) but tariffs are high in other countries. Tricks says he would consider exporting to other Asian markets if those tariffs were reduced.
Here are the free trade agreements the Australian Government is negotiating:
CHINA: The attraction for small business is obvious as China is growing at a rapid pace. In fact, Australian exports to China have grown at an average rate of almost 20% over the past five years.
Austrade claims the industries that would benefit from the FTA with China include agriculture, manufacturing, minerals and energy and services. Economic modelling estimates show that Australia’s real gross domestic product would be boosted by almost $25 billion over the period 2006-15 if an FTA were in place. The Chinese and Australian governments first announced plans for FTA negotiations in April 2005. The seventh round of negotiations took place in December last year.
JAPAN: FTA negotiations with Japan were only announced in December last year, even though Japan has been a strong market for Australian exporters for 40 years. The first round of negotiations will take place in Canberra on 23-24 April. A feasibility study released last year found that the value of Australian gross domestic product would increase by almost $40 billion over 20 years under an FTA.
A free trade agreement would be important to exporters in the food sector as it would seek to lower export duties levied by Japan, as well as lowering restrictions on certain agricultural imports.
MALAYSIA: Negotiations with Malaysia started in April 2005. Much of the discussion is about eliminating tariffs and tariff quota restrictions. Dairy products and some horticultural products, processed meat and some seafoods face tariffs of 5–30%, as do some tropical fruits and wine.
Malaysia aims to become a regional hub for halal food. Getting sufficient halal accreditation to satisfy Malaysian authorities has been a challenge for Australian food exporters. Small business would benefit if those types of non-tariff measures were dealt with in FTA negotiations.
CHILE: The closest country in South America is a relatively small trading partner compared with Asian countries. Two-way trade in goods and services with Chile was worth about $423 million in 2005, while Australian companies have about $3 billion worth of investments in the country.
Discussions are at an early stage. The governments have an in-principle agreement to commence negotiations, which would initially comprise bilateral meetings later this year.
GULF COOPERATION COUNCIL: Australia needs an FTA with the Gulf states as soon as possible, because the council is negotiating with many other countries, including China, Japan, India and the European Union. Without a similar FTA to those countries, Australia would face higher entry barriers than its international competitors to what is becoming an important market.
For example, the region has become the largest market for the export of Australian passenger motor vehicles. It is also an important market for meat and livestock exports (accounting for 33% of Australian exports) and cheese and curd exports (20%). The Australian Government announced in June 2006 it would commence FTA negotiations. Submissions from groups relevant to the FTA, including business, closed in March.
ASEAN: This could be the most problematic of Australia’s possible FTAs, which was first announced for discussion in November 2004. The latest update, the 12th so far, released in March, said ASEAN was yet to engage on intellectual property, government procurement and competition policy.
Government procurement, potentially a lucrative opportunity for Australian services companies, has been a problematic topic. Tariffs are also an issue, with ASEAN concerned that any lowering would adversely affect smaller countries.
Back to top
By Mike Preston
Chinese language, culture, laws and business practices may be very different to Australia’s, but SME owners who fail to cross this cultural divide risk being left behind.
A recent The Executive Connection survey of Australian chief executives found 22% are doing business in China, ranking it second only to New Zealand as an overseas business destination.
Recent research from Austrade/ABS/Sensis shows 20% of all exporting SMEs are involved in the China market, the number having doubled in only two years.
There is big money to be made in China – if you get your approach right.
Do your research
Lesson one for SMEs heading to China is to expect to be surprised by the business practices.
Fast-growing construction software company Aconex opened an office in Shanghai in 2006 to take advantage of the construction boom. Despite experience gained opening 30 Aconex offices around the world, managing director Leigh Jasper says he did not expect the resistance he encountered to the rollout of Aconex’s product in China.
He says the Chinese legal system, which is still developing, means business practices are different. “Our web-based system is about making information available to as many people as possible, but one thing we have found a little tricky is that in China there is an element of not wanting complete transparency,” Jasper says.
“We discovered there is a desire to maintain some opaqueness in the process to hide the fact that various people are making money along the way, especially in the local projects.”
Rather than compromising its product to accommodate local practices, Aconex’s response has been to put more resources into researching and developing those parts of the market where it would work.
“If we had done that research initially we would have more aggressively targeted particular segments of the market to go after. We now see that international investors building property in China are more open to our system, and they will absolutely be our focus going forward,” Jasper says. “It’s such a big market that we really only need one or two segments to build a substantial business.”
Meet the right people
Another advocate of thorough research is Ross Horley, chief executive of ASX listed medical training equipment company Medic Vision, which this year will earn more than $1 million from its China operations.
Horley says it is critical to research structure and key players in industries. “One of the things we did early on was pay a visit to the Vice Minister for Health to show our training simulators. We managed to get a photo of the Vice Minister using the simulator, which we used as part of a slideshow accompanying a presentation we did at a conference later that afternoon.
“The slide wasn’t even labelled with the Vice Minister’s name, but the number of people who came up afterwards to ask us if it was the Vice Minister for Health was incredible. They were clearly much more impressed with that than anything we had said. The photo, which we’d only taken a few hours earlier almost as an afterthought, really sealed our credibility at that conference and generated a huge amount of interest for our product,” Horley says.
The meeting was a more effective marketing tool than any advertising money could have bought.
Find local partners
Finding the right business partners is another critical challenge. Launceston blanket and bedding manufacturer Waverley Australia decided it did not have the resources to set up its own retail or distribution network in China. So the company has built relationships with strategically positioned local agents across China. (See Exports bring woollen mill in from the cold.)
Dealing with agents has allowed Waverley to establish an effective local sales presence without the cost of setting up offices and hiring local staff. This has meant that, after just nine months in China, Waverley has already made close to $500,000 in sales and built up $1.3 million worth of forward orders.
Waverly managing director Bruce Grant says he used business-to-business online portals such as Alibaba to make the connections. “We focused on only very professional b2b sites and purchased premium memberships to filter out the jokers and just get people who are very serious about doing business. We must have got 40 leads that way,” Grant says.
From there, it was a matter of vetting these prospects to find half a dozen agents with the credibility and capability Waverly wanted. Austrade was instrumental to this “due diligence” process, providing background information, helping arrange social events and meetings and supplying the all-important translators. The bottom line, however, was building personal relationships – and that meant spending a lot of time in China.
“I have been to China five times in the last nine months because our agents want to have that relationship with us,” Grant says. “Doing these deals meant going and socialising. That is just how business is traditionally done there.”
Grant says the real business is often done in a bar or restaurant after the formal meeting has finished. He cautions that it is important to keep your head during the wining and dining: “It is very much part of the process to have a drink; they will toast you with hard liquor and expect you to join them all night long. It can get out of control pretty easily if you’re not careful.”
Show them what you’ve got
Now earning around 20% of its $30 million annual revenue from China, industrial oxygen sensor manufacturer Novatech Australia initially struggled to win business against a few dominant multinationals when it first arrived in China in 1997.
To crack the market, Novatech sought and received government approval to have its equipment trialled against a competitor’s in one of China’s largest power stations in Baoshan near Shanghai.
Success in the trial allowed Novatech to “come in from the cold,” managing director Karyn McDonald says. “Success in that one power plant made a huge difference; shortly after the trial finished in 1999 we started making sales across the country and we haven’t looked back.”
It took Novatech two years, and a significant investment of time and money, before it could begin making sales. This experience is common. As Aconex’s Leigh Jasper says, to succeed in China it’s important to be patient, plan carefully and avoid being “blinded by the prize”.
Rushing into China with a costly new office and full contingent of staff could lead to a costly disaster. By treading carefully, SMEs can make their way in the huge and rapidly growing Chinese market.
Back to top
Mike Preston
Exporting to Asia is likely to become a more risky business, and it is SMEs that are likely to pay the price, according to a new report (26 Sept 2007) by Dun & Bradstreet Australia.
The report reveals that debtor days for some of Australia’s biggest export partners in the region are leaving Australian exporters in the lurch waiting to be paid. India is the worst offender, with 55.9% of payments made more than 30 days past standard terms, followed by New Zealand on 40.6%, The Philippines on 39.1% and Malaysia on 38.6%.
The report argues that SMEs, which comprise 80% of Australia exporters, will be hardest hit because of their more vulnerable market position compared to bigger businesses.
“Risk is greatest for small and medium sized exporters who don’t have a dominant market position and are reliant on a small number of overseas customers,” says Christine Christian, the chief executive of Dun & Bradstreet Australia.
And the risks faced by exporting SMEs are likely to get even tougher, the report finds, with the fallout from the sub-crisis in the US likely to feed into a global contraction if the consumer demand fuels economic growth in many Asian countries.
For Australian exporters this may mean having to wait even longer for payment from overseas customers partners, Christian says.
“Australia would suffer the flow-on effects of this trend as export markets in the Asia-Pacific region are forced to rein in spending or delay payments to trade partners as a means of managing reduced US demand on their operations,” Christian says.
Back to top
Tim Harcourt blog, 22 October 2007
All rugby-loving Australians are a bit stunned at the early exit of the Wallabies from the Rugby World Cup 2007 in France at the hands of England (or rather Johnny Wilkinson’s boot to be precise).
The only saving grace is that New Zealand was beaten as well by France in Cardiff , despite the All Blacks being hot favourites to win the tournament. The early exit of the great New Zealand team – despite the enormous talent that the rugby nation nurtures and develops – at every World Cup since 1987 is getting beyond a choke... sorry I mean joke.
Mind you, we Aussies are in no position to stir the Kiwi pot, given how many famous Australians are really Kiwis (think Russell Crowe, Phar Lap, Fred Hollows and so on).
But while the Wallabies may be gone there’s actually still plenty of opportunity for Australian exporters to score, with a number of business networking events being staged across France and Wales. Organised by Austrade’s Business Club Australia, the networking events are staged to help Australian businesses meet local and other potential business partners who are there for the World Cup.
According to Australia’s senior trade commissioner in Paris, Kirsten Sayers: “A big event like the World Cup is a great opportunity to get France on the map for Australian exporters, particularly when a ‘Who’s Who’ of French business and political life will be in Paris for the final.”
Business Club Australia will be hosting a gala dinner at the Australian embassy in Paris on the Wednesday before the final, with many big names in Australian rugby and business life such as Australian Rugby Union CEO, John O’Neil, General Peter Cosgrove, Macquarie Bank chairman David Clarke, and senior representatives from Qantas, National Australia Bank, Minter Ellison and Coca-Cola Amatil. The Kiwis will also be represented by All Black legend and TV3 commentator Frank Bunce.
In addition, many other Australian small and medium enterprises (SMEs) – particularly those with sporting links – will be there to take advantage of networking opportunities.
An example of an up-and-coming player is Concept Sports, which provides sports merchandising and marketing services. According to Concept Sports chairman Andrew Plympton: “We were just a small Australian sports merchandising company, but thanks to events like the Olympics, the America’s Cup and now the Rugby World Cup, we’re a global player in a business that does everything from manufacturing to marketing, merchandising and logistics.”
In addition to the grand finale in Paris, there have been Business Club functions in other venues in France, such as Montpellier and Bordeaux and also a special mission to Wales to coincide with the Wallabies pool game against the Welsh team in Cardiff.
According to Janelle Casey, Austrade’s specialist for health, biotechnology and well being: “We have brought a high-profile health mission to Wales and met lots of potential partners, investors and venture capitalists at the function at Millennium stadium in Cardiff. It was a great way to get the ‘Who’s Who’ of our very specialist industries in areas like biotechnology in the one room at the same time.”
Austrade’s trade commissioner for Northern England and Wales, Matthew Morgan, agrees: “There’s a lot happening in Wales as it diversifies from a manufacturing base into knowledge-based services and technology-intensive industries. The function was a chance to show off the new Welsh economy and to introduce Australian exporters to local businesses,” he explains.
The original Business Club concept was developed by Austrade at the Sydney Olympics in 2000. The concept was based on Austrade research about the economics of networking that showed that 50% of all exporters met “by accident” and that this could be sped up with well-targeted match making.
The Sydney Olympics was thought to be the best testing ground to try out the concept as there were so many international business visitors coming to Australia for the first time. As a result, many aspirational Australian exporters found that they were in the right place at the right time and after taking their once-in-a-lifetime opportunity in Sydney 2000, they have cleverly built their brand at other events like the Rugby World Cup.
As Business Club Australia’s manager Ashley White points out, the special event strategy for doing business has been developed over the decade in both on-shore and off-shore forms.
“After the success of Sydney 2000, the Rugby World Cup 2003 and the Melbourne 2006 Commonwealth Games, Austrade decided to expand its business networking program at the Rugby World Cup 2007 here in France,” White says. “We were also at the FINA World Swimming championships and will be involved in the Spring Racing Carnival in Melbourne before heading to Beijing for the 2008 Olympics.
“Football – the truly world game – is also on the horizon. With few major international events in Australia on the horizon, it made sense to take the BCA model overseas. Since its inception, BCA has held over 260 networking events in Australia and overseas. There are around 8500 members – with some 37% located offshore – and the BCA program has facilitated over $1.7 billion in trade and investment deals since 2000. That certainly shows the economics of networking – or ‘the power of schmooze’ – works in practice.”
There is certainly a lot of schmoozing around rugby if the Rugby World Cup 2003 in Australia is anything to go by. That tournament clearly demonstrated the strong links between “the game they play in heaven” and business.
In fact, according to Austrade research the rugby playing nations make up some of our key exporter destinations, with over 17,300 exporters going across the ditch to New Zealand, over 2000 to South Africa and nearly 250 to Argentina. Even the Pacific nations – like Fiji, Tonga and Samoa – account for over 3500 Australian exporters.
In conclusion, there’s plenty of business action left in the Rugby World Cup even if the Australian and New Zealand teams are no longer on the park. But who’s going to win? Could we see a repeat of the Falklands War with an Argentina versus England final, or will Gallic flair win the day and we’ll see France take on the might of the Springboks on home soil?
But just remember, especially to those diehard fans on both sides of the ditch, it’s only a game.
Advertisement
