SMEs must do more to break into global networks of big companies

A visiting expert on global competitive business says Australia still has a long way to go before it can consider itself a truly global business centre, and SMEs need to work harder if they want to break into global markets from Australia.

 

Michael Enright, of Hong Kong-based research and strategy company Enright, Scott & Associates, is in Australia to present the results of a study in the competitiveness of Sydney as a global business centre.

The study, which involved a survey of 85 multinationals with operations in Sydney, found these companies ascribed a lot more importance to their Sydney operations than they did 10 years ago.

“Having said that, the Sydney operations are coming through as being stand-alone, relatively isolated and not as plugged into the global network of the multinationals as you might think,” Enright says.

That result is surprising, given the vast improvements in communications technology which has made Australia a much more globalised economy.

But Enright says the Australian operations of multinationals are usually tightly focused on the local market and little else.

“The limiting factor is not technology, (it is) the roles that the multinational ascribes to the Sydney operation.”

As a result of the disconnect between the Sydney operations of a multinational and their headquarters, local service providers and suppliers who do business with these multinationals are finding that it does not open the doors to the global networks of these companies.

Enright gives the example of local professional services firm that works for a multinational. “The vast majority of the multinationals that use Sydney-based professional services firms only use them in Australia,” he says.

He says local SMEs and suppliers need to lift their games if they want to leverage their relationship with multinationals to win work outside Australia by proving they have knowledge of multiple markets and can think strategically.

“It really comes down to an ability to understand customers outside of an Australian context.”

He also says Australia and cities such as Sydney need to be careful about portraying themselves as global centres when there is still some way to go before this is achieved.

“We need to make sure that the rhetoric matches the reality.”

 

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