A new report identifies ways in which Australian businesses can take advantage of “Asian economic transformations”, including finance, infrastructure, manufacturing, tourism and food.
The report, Imagining Australia in the Asian Century, was produced by Boston Consulting Group in conjunction with the Business Council of Australia.
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The report identifies 13 companies that have demonstrated a capacity to succeed in Asia.
They are ANZ, Leighton, Hassell, Sedgman, RMIT University, Navitas, SEEK, Jetstar, Linfox Logistics, Crown, Tangalooma Island Resort, TNA Australia and Craig Mostyn Group.
According to the report, Australia “has much to lose” if it fails to seize opportunities in Asia outside of the resources sector.
The report said while an “Asia-capable workforce” is necessary, businesses also need to develop new and innovative business models in order to expand even faster into the region.
It listed nine areas of opportunity for Australian businesses: finance, infrastructure, education and health services, resource capabilities, integration, logistics, manufacturing innovation, tourism and food.
Here’s three ways you can cash in on the Asian Century:
1. Support Asian investment
“Asia’s growth has been spurred by heavy investment in physical and human capital across the region,” the report said.
“These high levels of investment provide opportunities for Australian businesses in financial services, design and construction services, resource extraction, education and health.”
“Australian financial services firms with [a] presence in Asia and cross-border capabilities are well positioned to capitalise on increasing investment and intra-regional trade flows.”
Meanwhile, the report said Asia is expected to invest around US$8 trillion in infrastructure between 2010 and 2020, with around US$2 trillion going to design and construction services.
“It is an important market for Australia’s design and construction expertise,” it said.
“Some of the biggest opportunities are in Asia’s emerging markets, where there is strong demand, and a shortage of domestic expertise and capabilities.”
2. Connect Asia
“Australian companies are participating in ‘Asian integration’, taking their service capabilities to Asian markets,” the report said.
“Australian services firms are buying, building or partnering with Asian businesses to profitably deploy intellectual property developed initially in the Australian market.”
The report said one of many such opportunities is the development of online marketplaces across Asia.
“While Asia has the world’s largest and fastest growing online population… some of its internet marketplaces are less developed than those in Europe, America and Australia,” it said.
“SEEK Limited… has developed a strong portfolio of firms in Asian markets. Its experience shows that a portfolio approach can be an effective way to deploy intellectual property developed in Australia into Asian markets.”
3. Meet Asian consumer demand
In 2009, 28% of the world’s middle class lived in the Asia-Pacific region, according to the report. By 2030, that share will be 66%.
“The shift of buying power in the world economy is driving change in three key areas of interest to Australia: tourism, innovative manufacturing and food,” it said.
“Australian firms sell around $20 billion of manufactured goods to Asia, but their value has declined by 12% in the decade to 2011.”
“However, some Australian firms manufacturing for the Asian market are growing and profitable. An example is TNA Australia, which designs and installs innovative systems for Asian food product manufacturers.”
In addition to promoting Australia as a tourism hotspot, businesses also have an opportunity to contribute to the food bowl for Asia, the report said.
“Asia will be the key contributor to an estimated 70% increase in global food and beverage demand by 2050… Asia has high demand for food products such as pork and seafood,” it said.
“Australia’s relative abundance of arable land and the quality of its agriculture practices makes it well positioned to export food to Asia.”