An ‘Asia Capable’ Australia for the coming Century
March 2012
The second essay from Asialink in our series responding to the Gillard Government’s White Paper announcement on Australian in the Asian Century.
Australia has long been seen in Asia – and by many Australians too – as a western outpost in an Asian neighbourhood. Asia was for a long time the continent Australians flew over to get to Europe or America. At worst Australia can seem to be a lonely country, at odds with our community of near nations – nations whose leaders once described us as ‘the white trash of Asia’ or called for an ‘Asia for Asians’, partly to exclude us from the regional architecture they were creating.
But we have, from Alfred Deakin to Julia Gillard, had political leaders who recognised the critical importance of our relations with Asia for our prosperity and security. And we have also, for many decades now, had calls from some quarters in Australia for our community to be better prepared and more skilled; to be better equipped for business, educational, cultural, diplomatic and security links.
So how are we faring in this major task and how, as a nation, should we be preparing the next generation of Australians for their future in this region?
School education is a good place to start. Just 300 students of non-Chinese backgrounds studied Mandarin at Year 12 level in Australia in 2009. On current trends, Year 12 Indonesian language classes will be empty by 2020. Over the past decade, enrolments in Indonesian at our universities have collapsed by 40%. Without urgent action, we will soon be dependent upon a rare resource – Australians that can speak the language of our nearest neighbour – the world’s second largest democracy and an expanding economy with a rich and ancient culture.
Whilst languages are intellectually valuable for our children they are not seen by business as the key knowledge they require. We know from Australian businesses active in Asia that speaking the local language is valuable. What matters even more though, to business, is knowledge of the people, their histories and social structures, their legal frameworks and political processes.
Yet very few Australian students are learning anything about Asia. A 2009 study found that just two per cent of Year 12 history students chose to study history with Asian content, while 65 per cent chose Germany and 19 per cent Russia. Now in 2012 we have, for the first time, a national Australian curriculum with Asia and Australia’s engagement with Asia identified as a cross-curricula priority. And this is one of only three cross-curricula priorities so we should be able to get it right. Getting it right would mean that our children would learn about the economies, geographies, politics, literature, religions, sciences and technologies of the countries of our region, in balance with their learning about the rest of the world.
Of course as the new curriculum is rolled out we will need time for teachers to upgrade their knowledge and hopefully to spend time in Asian countries seeing first hand why our neighbours are so important to us – what extraordinary development is occurring in this part of the world and what rich cultures are available to stimulate and nurture and inspire our children.
Victorian Premier Ted Baillieu is on a personal campaign to open the eyes (and the hearts and minds) of Victorians to these opportunities. After his first visit to China some years ago he immediately returned with his own children because he “wanted them to see their future”. Now, as Premier, he is leading super missions of business people to China and India, taking whole of government strategic advice from a newly appointed Asia specialist, supporting an Asia focus in Victorian schools and pushing for regional ties to underpin the future of the state’s economy.
South Australian Premier Jay Weatherill is also speaking in early March on Australia’s future in the Asian Century. Adelaide’s annual OzAsia Festival, together with the Queensland Asia Pacific Triennale, leads the country in positioning Australia as a significant player in the cultural landscape of our region. The 2011 OzAsia program featured 446 artists from Japan, China, Hong Kong, India, Indonesia, Korea, Malaysia, Tibet, Thailand, Vietnam, and Australia and the 2012 program will focus on India.
The business community is also in no doubt about the importance of Asia to their future. Last year Asialink and the Australian Industry Group surveyed Ai Group members on how important Asia was to their future plans and how prepared they believed they were.
74% of all responding businesses indicated an interest in expanding into the region, with almost 50% actively planning expansion within 12 months. Of businesses with current dealings in Asia, 56% rated at least one of their Asian operations as ‘highly important’ or ‘extremely important’ to their overall business success.
Yet, business reported a deficit of relevant skills. When asked about the importance of various business factors and skill sets for doing business in Asia, references to ‘quality product at accurate price point’ and ‘quality partnerships’ dominated, along with ‘appreciation of different political and legal processes’, ‘managerial skills’ and ‘local cultural knowledge’.
The survey found that Australia is falling short of the skills required to maximise opportunities in the region. Ai Group Chief Executive, Heather Ridout noted that respondents were upbeat about the strength of their prospects in Asia but at the same time identified large gaps in their experience and skills. More than half of those currently operating in Asia reported little board and/or senior executive experience of the region with 65% of responding companies having no board members that have worked in Asia.
This perceived skills gap presents some real challenges for both companies and public policy. Late last year Asialink established an Asia Capable Workplace Taskforce chaired by ANZ Chief Executive Mike Smith and made up of heads of the Business Council of Australia, the Australian Industry Group and senior business leaders. This group is calling on the education system at all levels to provide more Asia capable graduates and on Australian business to invest in developing their staff and providing more opportunities for them to progress their capabilities with Asia.
This people and capability challenge comes at a time when our engagement with Asia is growing and outstripping our engagement with the rest of the world. The annual PwC Melbourne Institute Asialink Index measures Australia-Asia engagement across trade, investment, education, tourism, migration, business development and humanitarian assistance. The Index has found that since 2004 when Australia’s trade performance with Asia overtook our trade with the rest of the world combined our trade engagement has continued to grow. In 2010 it grew 9.3% and was 44% above trade with the rest of the world. However our business investment into Asia is a very different story. Investment engagement comprising inflows and outflows fell 30% in 2010 and this was off an already low base. Investment engagement since 1990 has tracked well below our engagement with the rest of the world and in 2010 the 25 countries of Asia were less than half the rest of the world.
The real measure of a genuine desire to understand the Asian region, and comprehend the opportunities, is people on the ground and financial commitment. Australia still invests more in Europe, the United States and New Zealand than we do in Asia, by a significant margin, despite the enormous growth opportunities and proximity and time zone advantages we enjoy in our own neighbourhood.
There is a disconnect here. We know that Asia saved us from the GFC and we assert that our economic future lies with this region but are we willing to put more in? The Asialink Ai Group survey found that companies believed that the capabilities at senior management level could be much better. Important for business was understanding the local culture, the legal and political hurdles and having the ability to adapt to new environments. So supporting Asia studies at school and universities and providing skills development in the workforce are essential and urgent investments in our future.
Leaders across sectors in Australia also recognise the need for long-term respectful and collaborative relationships with our Asian counterparts. Asialink has prioritised working with the countries of ASEAN for over a decade and we are now beginning to reap rich rewards. In February at very short notice we received approval from the Burmese Foreign Minister for the first ever gathering of academics, business, media and government experts from ASEAN and Australian participants in Yangon. Everyone worked to ensure that this group supported Myanmar as it opens up and build towards its chairmanship of ASEAN in 2014.
Almost six months ago now, Prime Minister Gillard announced a White Paper on Australia in the Asian Century. A Taskforce led by Ken Henry was put in place to consult widely and to report by mid 2012. This White Paper aims to set a course for the great national project of effective Asia engagement. The signs are positive. A national conversation is happening. Ideas and ambitious plans are being submitted for consideration, and spotlights are being focused on the tough challenges of making this continent more Asia capable and Asia connected. Rich rewards will flow if we get this right and if Australians from our business and education communities, our government, police, media and arts communities and our health, environment and NGO personnel are able to work together with colleagues from our region to solve the big challenges of the future in collaboration and with mutual respect.
View current submissions to the Australia in the Asian Century White Paper at asiancentury.dpmc.gov.au
Jenny McGregor is CEO, Asialink.
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