SMEs urged to embrace power of proximity as business groups back review of Australia’s relationship with Asia

Forget the tyranny of distance – small business is urged to embrace the power of proximity.

Welcoming the Government’s new review of Australia’s relationship with Asia this century, Austrade chief economist Tim Harcourt reminisces that a similar review by economist Ross Garnaut in the 1980s had presciently tipped a great export future for Australia in Asia.

While Australians are well aware of Asia’s importance these days Harcourt says misconceptions persist that Australia’s trade in Asia is all about rocks and crocs.

“It’s a bit more sophisticated than that,” Harcourt says.

“Small businesses are more likely to do business with ASEAN countries and China than they are with Europe.”

“When I travel in Asia I meet small Australian companies from Wuhan to Indonesia.”

Harcourt says while some small businesses are leveraged to the mining boom, companies in software, training and professional services are also striking deals in Asia.

Harcourt says Austrade’s surveys of small and medium-sized businesses reveal that beyond trade agreements, what SMEs really want is less regulation, Government grants and on-the-ground knowledge, and he says trade ambassadors can lend credibility in competitive markets.

Harcourt said Australians managing projects overseas are often highly regarded, perhaps because our multicultural society makes us more comfortable when dealing with people from many cultures.

The review, to be led by former Treasury head Ken Henry, will be released in the middle of next year.

It will look at:

• Current and likely future course of economic, political and strategic change in Asia, encompassing China, India, the key ASEAN countries as well as Japan and the Republic of Korea.
• Domestic economic and social opportunities and challenges of the Asian century for Australia.
• Opportunities for a significant deepening of our engagement with Asia across the board, including in the economy, science and technology collaboration, clean energy, education, business-to-business and people-to-people links and culture.
• Political and strategic implications of the Asian Century for Australia.
• The role of effective economic and political regional and global co-operation.

One company that has aggressively focused on Asia growth is ANZ Banking Group. Its chief Mike Smith told the Australian Financial Review it was important for business to contribute to the white paper.

Geoff Raby, a former ambassador to China, told The Australian that Australia was once well-placed for work with China but has now fallen behind.