ASIA TASKFORCE FINAL REPORT APRIL 2021 A SECOND CHANCE How Team Australia can succeed in Asia

Asia Taskforce is an initiative of Knowledge partners TABLE OF CONTENTS

page 1 Foreword 2

2 Introduction and Call for Action 3

3 Executive Summary 5

4 A Work in Progress 8

5 The Roadmap for Success 10

6 Recommendations 26

A Second Chance | 1 SECTION 1

FOREWORD

Hon Dan Tehan MP Minister for Trade, Tourism and Investment

Australia’s engagement with Asia The need for business to look Expanding and better using has grown steadily in size and to Asia has never been greater. Australia’s network of 15 free sophistication. We have worked Capturing new and diverse trade agreements (FTA) with to become a trusted strategic and market opportunities in Asia 26 economies will secure new economic partner in the region, will be a key part of Australia’s openings for Australian businesses and to create opportunities for our economic recovery. to expand into Asia. Entry into force businesses to expand into dynamic of the Regional Comprehensive The Australian Government has an and diverse markets. This report Economic Partnership Agreement important role to play in this effort: by the Business Council of Australia and an upgrade to our existing and Asia Society Asia Taskforce is an • Advocating internationally and FTA with ASEAN Member States important and timely reminder that within the region for open rules- and New Zealand will complement there is more work to do to build based trade and investment, the commencement of the and strengthen our relationships including in APEC, the World Comprehensive and Progressive throughout the region. Trade Organization and the G20. Agreement for a Trans-Pacific Partnership and the Indonesia- Importantly, the Asia Taskforce • Expanding access to diverse Australia Comprehensive Economic does more than make the Asian markets through strategic Partnership Agreement. argument that businesses should relationships and trade expand into diverse markets agreements. Strengthening our strategic across Asia. It advocates a Team relationships with economic Australia approach, and identifies • Engaging with Australian partners in the Indo-Pacific, practical, specific actions that business to help them navigate and recent upgrades to our business and governments can market disruptions in the region, partnerships with India, Vietnam, take to strengthen the presence including via market intelligence Indonesia, Malaysia, the Philippines of Australia, and our businesses, from the Government’s and Singapore, aim to open new in Asia. For business, the report diplomatic network. doors for Australian business. offers practical guidance, including Transparent and open rules- case studies of what successful I encourage all Australian based trade underpins the ability businesses to view our overseas companies do well, and examples of of Australian business to expand country-sector strategies. diplomatic network as your their export markets in response resource, as you look to navigate The significant economic shock to changing market dynamics and markets in Asia and understand caused by COVID-19 has challenged risks. The Government will take a market risks and opportunities. governments, industries and proactive, principled and patient businesses in all countries to approach when advocating for I extend my congratulations and reconsider their trade and stable and open global markets. appreciation to the Asia Taskforce investment settings. The success of Australian business for the release of A Second Chance: and the prosperity of our economy How Team Australia can succeed in depends on it. Asia. I look forward to continuing the Team Australia partnership between government, business and academia as we grow the success of Australia’s businesses in Asia.

A Second Chance | 2 SECTION 2

INTRODUCTION AND CALL FOR ACTION

Australian business once But the Asia of today is not the The alternative path is to tap into again stands at a crossroads. Asia of four decades ago. It has these diverse Asian markets on the transformed with unprecedented ground rather than just with exports, Not since the 1970s have we income growth, the rapid take-up combined with tax, workplace and witnessed a major re-alignment of new technologies, the growth in regulatory reforms at home. It is in how we trade and invest in services and the digital economy, the path of higher productivity, the world. Back then we lost our new business practices, consumer income growth, quality jobs and imperial trading partner, the preferences and habits. rising living standards. United Kingdom, when it turned to Europe. We faced a stark choice. We now face a much more Getting there is not easy with more We could look inwards and continue complex environment - complexities than we faced in the down the low-growth path of 1980s. It demands that we listen protectionism and autarky. Or both in Asia, and in a global more to our Asian partners and we could strengthen Australia’s competition for access to become more attuned to how we international competitiveness to Asia and its markets and are perceived compared with our look outwards and embrace the consumers. competitors. Getting to know our dynamic, emerging though still region and shifting our attitudes to In recent years we have watched developing, economies of Asia. it is possible and can lead to long- Asia’s inexorable rise and term profitability, as illustrated by Australia made the right choice. transformation, wondering what it the case studies in this report. We opened up and re-oriented might mean for Australia and the our trading relationships to Asia’s West in 10 years’ time or more. There is plenty of room in emerging middle classes. This But slowly we have slipped behind, contributed to nearly three decades re-adjusting at the margins and Asia for Australia, but Asia of uninterrupted growth, prosperity thinking about competitiveness is not waiting for us. and job creation. In many ways as tomorrow’s challenge. We have Asia, with the Peoples Republic we were ahead of our traditional stood back and admired of China (China) at the forefront, Western partners. We took risks, the problem. remains the economic powerhouse including significant structural The disruption of COVID-19 of the world. But the opportunity adjustments to trade–exposed brings forward stark choices. to both diversify and grow our industries at home, resulting Protectionist policies that seemed trade and investment in Asia is in enhanced productivity and a unthinkable a year ago are significant. There is plenty of room globally competitive economy. creeping back. Popular support in Asia for Australia, but Asia is not waiting for us. This is to the credit of the businesses for the open economy cannot which led the way engaging with be taken for granted. Retreating The rationale for greater economic Asia, and to the successive Hawke- to old familiar relationships in engagement with Asia has not Keating-Howard governments Western markets, falling behind dissipated with the pandemic and which supported integration in Asia literacy and failing to build geopolitical tensions surrounding through far-sighted foreign, trade connections with new Asian China’s rise. In fact, both economic and investment policies. business partners should not be and geostrategic forces are seen as a serious default choice pushing Australia even closer to when consumption in Asia will likely our Asian neighbours. fuel future global growth.

A Second Chance | 3 S2: INTRODUCTION & CALL FOR ACTION

Diversification for Australia though However, we need to understand our We would also like to acknowledge does not mean China or, it must be region and play to our competitive the support that the Taskforce China and. So, learning to navigate strengths; improve our Asia literacy has received from the Australian a more complex relationship with and make better use of our rich Government, particularly China is imperative and efforts Asian and Australian diaspora Senator The Honourable Simon to ensure both countries engage talent; adjust our policies to remove Birmingham who helped launch constructively must be a priority. barriers and encourage innovation the Taskforce, and The Honourable and risk-taking; remain an open Daniel Tehan MP who has Australia is exceptionally well economy and bring our business supported and taken great interest positioned – economically, and government resources and in our work since he became strategically and geographically talent together in a national “Team the Minister for Trade, Tourism - to expand trade and investment Australia” approach to developing and Investment. We would also partnerships, increase our new markets and opportunities. like to thank the Department of economic competitiveness Foreign Affairs and Trade and the through openness and build and While this is the Final Report of Australian Trade and Investment grow new businesses and supply the Taskforce, we will continue to Commission which have provided chains connecting us to the region. advocate for trade and investment considerable support and input to Today, exports make up 29% of in Asia and be champions for the Taskforce’s efforts. Australia’s GDP. We believe that positive change. Among the we should have a national goal to new initiatives outlined in this We hope that the Taskforce has increase that to 35% by the end of report, the Asia Business Action successfully demonstrated that the decade. Group (ABAG) will carry out the Australia has never had a better mission of the Taskforce and bring ‘hand’ to play in Asia, we now need While Australia has navigated together leaders and experts in to play it with bold and intelligent the pandemic relatively well in the priority sectors and countries moves. And while Governments contrast to our global peers, we in Asia to continue to advise and our academic community have have not yet seen its full economic government and business. a vital role to play in support, it is impact. The priority now must be business that must step forward the return to growth and creation We want to thank the Taskforce and focus on growth in Asia. of jobs. It is hard to envisage this Leadership and Steering Group and being achieved solely through the many sub-committee members We also hope that future a domestic focus. Even before and contributors, all with deep generations of Australians will look COVID-19, the need to write Asia expertise, for their tireless and at this moment as the point at the next economic chapter for outstanding contributions to this which Australia secured another Australia was evident and it is work. Each member has committed three decades of economic hard to see how accelerated and to this project for no other reward growth, rather than the moment diversified trade with Asia is not than a hope, that, as a country, when we stood back and let Asia the cornerstone. we will develop a wider range of pass us by. sustainable trade and investment pathways to Asia.

Mark van Dyck Jennifer Westacott AO Philipp Ivanov Taskforce Chairman; Chief Executive, Chief Executive Officer, Regional Managing Director, Business Council of Australia Asia Society Australia Compass Group Asia-Pacific

A Second Chance | 4 SECTION 3

EXECUTIVE SUMMARY

In October 2019, the Business The International Monetary The operating environment is Council of Australia and Asia Fund has forecast that the global not straight-forward, and the Society Australia with PwC and economy will contract by 3.5% in opportunities are not risk-free. the University of Sydney Business 2020 and while Asian economies But then growth is never a School as knowledge partners, are expected to return their worst risk-free proposition. formed an Asia Taskforce (the performances in 60 years, the Taskforce) to examine how region is still likely to fare better The Taskforce’s aim was to Australian companies can increase than most developed economies. provide a set of enduring ideas their presence and position in and recommendations to guide Asia to ensure our continued Economic growth has brought Australian thinking about how prosperity and deliver progress for with it shifts in relative economic to approach the opportunities future generations. and strategic power. These relative and risks of growing in Asia. The shifts are likely to continue, and Taskforce has made twenty-four As the Taskforce was being COVID-19 may even accelerate recommendations for business, established, we did not foresee them as the major economies in the academic community and COVID-19, but it is now clear that Europe and North America fall into government. The recommendations, the pandemic has had a profound recession. China seems likely to contained in Section 6, call for a impact on Australia’s economy emerge from 2020 as one of only target of boosting exports to 35% and the region that we live in. two Group of 20 major economies of GDP by 2030 (up from 29% in While the Australian and the global to avoid negative growth. 2019). To achieve that target, the economies were already slowing Taskforce is recommending that before the beginning of 2020, There have been several excellent Australia should: it seems clear that we are headed studies on the economic for a period of economic growth opportunities that Asia presents. 1. Adopt a “Team Australia” below our long-term trend. Our hope is that these are well approach to developing new Finding new sources of growth understood. The Taskforce opportunities has conducted more than 100 will be critical and Asia presents 2. Play to our strengths by adopting an attractive option. interviews with senior business and policy leaders. We have been country-sector strategies In 1980, Asia accounted for just focussed on practical ways for 3. Learn to navigate a more 20% of world economic output Australian companies of all sizes complex relationship with China although it was home to more to build sustainable and successful than half of the world’s population. businesses in Asia. 4. Reboot Asia literacy by building Today, the region accounts for on and nurturing past successes 40% of global GDP and it is likely to Weak institutions and invisible exceed 50% in the coming decade. influence networks make 5. Champion the talent in our the challenges for Australian Asian-Australian and diaspora companies numerous, complex, communities and often interrelated.

A Second Chance | 5 S3: EXECUTIVE SUMMARY

The Taskforce has mapped Enabling Australia’s Asian- out some practical advice for Australian and Diaspora “Generations that businesses and recommendations Communities and Reimagining come after us will for government in a series of eight Australia’s Asia Engagement supplementary discussion papers Capability contain a series of be disappointed in referenced below. insights and recommendations those companies that that must be key elements of any What successful companies do plan to make full use of one of haven’t sought to at well is a blueprint for market Australia’s greatest assets – our entry planning in Asia. We have exceptional talent. least do something identified eight actions that in Asia, because successful companies consistently The idea of Team Australia take well and provided some best outlined in our Interim Report companies from practice case studies. There are will be central to any success. other places will no guarantees of success, but Team Australia requires a new experience makes it clear that partnership between Australian do it or indeed the strategies and business models businesses, governments and our Asian companies tailored to the regulations and laws academic community to develop of mature markets do not translate new business opportunities in our themselves will, and well in most Asian markets. region. This national approach the opportunity will has served our competitors well Success will also require in securing major investment and be lost” businesses to work closely with other commercial opportunities in government agencies to develop Asia. A similar Australian approach a deep understanding of our would give some businesses more David Gonski AC neighbourhood – its cultures, confidence to invest in Asia. Source: Australian Institute of Company politics, societies and economies. Directors, April 2016 As Asialink Business pointed out The Team Australia approach in its July 2020 report Winning in has guided the completion of Asia, Australian businesses must four discussion papers – Taking invest far more in developing Asia Australia’s healthcare innovation capabilities at the board and senior advantage to Indonesia, Investing executive levels. Asia is different in Indonesian Healthcare, The and for many, it is uncomfortably Right Product Sold the Right so. We need to get to know our Way (focussed on Japan and neighbours much better. financial services) and Australian Universities, International Students Managing Bribery and Corruption and China – that have been outlines the practical strategies designed to illustrate a way of that companies can adopt to thinking about the opportunity. manage a risk that many find too challenging to tackle. As we outlined in our Interim Report, the industries and countries selected were not intended to be exhaustive.

A Second Chance | 6 S3: EXECUTIVE SUMMARY

We decided not to focus on China or India. China is already our largest export market and Peter Varghese The Taskforce had AO led the development of an in- depth India Economic Strategy to three objectives: 2035 which is a comprehensive guide for Australian businesses. Scope the barriers (what’s holding us back) and provide The four discussion papers were 1 practical recommendations on how Australia can build selected to serve as case studies trade and investment in Asia. of sectoral opportunities and collaboration strategies. In addition, Prepare practical insights into how Australian Asia Society Australia and the 2 businesses can play and win in Asia and identify the Australian APEC Study Centre have pre-conditions for success; and published a report titled A Path to Viet Nam and the Australia-Korea 3 Develop a set of recommendations for business and Business Council has published a government that will improve Australia’s chances of discussion paper titled Mapping success in Asia. the Australia-Korea Hydrogen Intersections in partnership with the The Interim Report focussed on the third objective - the Taskforce. These each outline high- recommendations that we believed were the most urgent in potential opportunities and sectors Australia’s COVID-19 recovery planning. The first and second in these countries ripe for individual objectives are addressed by the series of separate discussion or collaborative approaches papers that have been referenced above and further summarised by Australian businesses. We in this Final Report. encourage other industry groups and business associations to follow these geographic and sectoral examples of pooling resources and expertise to identify broad opportunities. While April 2021 will mark the completion of our original work plan, it will not be the end of the Taskforce’s mission. The Taskforce, through the Asia Business Action Group, intends to play a leading role in the implementation of these ideas and recommendations.

A Second Chance | 7 SECTION 4

A WORK IN PROGRESS

Since the release of the Taskforce’s Since the release of that report Among the significant new Interim Report in July 2020, the Taskforce continued its initiatives are: Australia has successfully managed research and advocacy. We the second wave of the pandemic deepened and expanded the 1. The Australia-Singapore Digital and maintained a remarkable 24 recommendations of the Economy Agreement (DEA) was economic resilience. However, Interim Report in eight in-depth signed and came into force. The the on-going global public discussion papers, developed by Agreement is considered a gold health pressures and economic leading Australian experts and standard in digital trade rules- disruptions induced by COVID-19 practitioners: setting and opens significant and the continuing deterioration opportunities for Australian of the Australia-China relationship 1. Reimagining Australia’s Asia businesses to build digital present significant challenges to Engagement Capability connectivity with the region. Australian companies seeking to 2. Managing Bribery 2. In November 2020, Australia enter and grow in international and Corruption and 14 other countries signed markets, particularly in Asia. They the Regional Comprehensive also underscore the need for 3. The Right Product Sold Economic Partnership (RCEP). trade diversification. The Right Way RCEP is a regional free trade The Interim Report was 4. What Successful agreement that will complement overwhelmingly well received by Companies Do Well and build upon Australia’s all levels of Australian Government existing free trade agreements and the business community. It 5. Taking Australia’s with other Indo-Pacific triggered an active debate about Healthcare Innovation countries. The members make Australia’s business capabilities, Advantage to Indonesia up 29% of world GDP and 30% culture and perceptions of Asia, of the world´s population. The 6. Investing in Indonesian other 14 RCEP countries include and government policy and Healthcare education settings required for nine of Australia´s top 15 trading Australia to successfully compete 7. Australian Universities, partners and account for 58% of in the region. International Students Australia’s total two-way trade, and China and 67% of our exports. 8. Enabling Australia’s 3. The Indonesia-Australia Asian-Australian and Comprehensive Economic Diaspora Communities Partnership Agreement (IA- CEPA) entered into force The papers have informed on July 5, 2020, enabling The Roadmap for Success 99 per cent of Australian detailed in the next section. goods (by value) to enter Indonesia duty-free or under preferential arrangements.

A Second Chance | 8 S4: A WORK IN PROGRESS

4. As a part of an IA-CEPA plan of 9. Asialink Business has published 13. Export Finance Australia action, Australia and Indonesia a major report Winning in is consulting international committed to a Blueprint for Asia: Creating long-term value counterparts on how their Deepening Australia’s Trade examining misconceptions programs can be adapted and Investment with Indonesia about the challenges of doing to build a suitable financial in February 2020 during business in Asia and offering offering for the Australian President Joko Widodo’s state the latest, evidence-based market. In June 2020, the visit. It will be released in the insights on successful Australian Board approved the agency’s first half of 2021 and will provide companies in Asia and their new Export Guarantee business with practical and success factors. Scheme. The scheme will help strategic guidance on trading the agency reach more SME and investing. It is a joint 10. The Australian Parliament exporters through commercial effort between the Australian has passed legislation to banks and other non-bank government and business, and reform the Export Market lenders. It is subject to an example of a Team Australia Development Grants scheme regulatory approval. approach. which assists Australian exporters with funding for 14. Australia and the other parties 5. Separately, the Department marketing and promotional to the ASEAN-Australia-New of Foreign Affairs and Trade activities in international Zealand FTA (AANZFTA) are (DFAT) is developing a Viet markets. The new legislation working on an upgrade of this Nam Enhanced Economic reduces the red tape within agreement to ensure it remains Engagement Strategy. the scheme and transitions the fit for purpose and maximises program from reimbursement its contribution to regional 6. The Australian Government to a grant model. economic recovery. is working with industry to implement a Services Exports 11. Australian Government has There are many other projects Action Plan. It is Australia’s established the whole-of- and policy initiatives around first national strategy to government Global Business Australia that boost our business boost exports across services, and Talent Attraction Taskforce engagement in Asia, and much and complements existing led by a senior business leader, to celebrate. However, we export strategies for education Peter Verwer AO, as the Prime see an absence of one single, and tourism. Minister’s Special Envoy for regularly updated source of data Global Business and Talent and insights (including success 7. Asia Society Australia and the Attraction. The Taskforce stories) on Australia’s economic Australian APEC Studies Center will coordinate whole-of- connectivity with Asia as a major have released a new report A Australia efforts to attract impediment to achieving sustained Path to Viet Nam: Opportunities high value global businesses and measurable progress in our and Market Insights for and exceptional talent in the economic engagement with Australian Business, one of the priority sectors of advanced Asia. That is why we recommend first recent major studies of manufacturing, financial the establishment of the Asia Australia-Viet Nam business services (including fintech) Business Action Group and the connectivity, supporting the and health. development of an Australia- government’s objective of Asia Economic Connectivity enhanced relations. 12. Separately, a group of Dashboard, which we explore in prominent Australian business detail further in Section 5. 8. DFAT has published annual leaders are in the final stages of Market Insights for more than releasing a major report on the 70 countries to share market competitiveness of Australia intelligence with business. as a base for regional financial services and fintech companies and the settings needed to improve our competitive position vis-à-vis other global and regional financial hubs.

A Second Chance | 9 SECTION 5

THE ROADMAP FOR SUCCESS

The Taskforce’s aim was to To achieve our goals, Australia should: provide a set of enduring ideas and recommendations that guide Australian thinking about how 1 to approach the opportunities and risks of growing in Asia. It Adopt a “Team Australia” approach has made 24 recommendations for business, the academic community and government. The key recommendations contained in Section 6 are discussed in 2 further detail below under Play to our strengths five key actions. The Taskforce believes that implementation of these actions will considerably enhance Australia’s chances of success in Asia. 3 Learn to navigate a more complex China

4 Reboot Asia literacy

5 Champion our rich Asia talent

A Second Chance | 10 S5: THE ROADMAP FOR SUCCESS

1 Adopt a “Team Australia” approach

Diversification of our economic They will serve to provide The ABAG will also: interests in a more economically leadership, accountability and competitive Asia requires a measure progress and outcomes • Advise on and coordinate high- greater collaboration and shared towards the key national goal impact business missions to Asia leadership of Australian business, proposed by the Taskforce of • Act as a business leadership government and academia and increasing our exports to 35% group and role model for the a sharp focus on measuring (up from 29% in 2019) of GDP Team Australia approach and outcomes. The idea of Team by 2030. champion implementation of the Australia outlined in our Interim Taskforce’s recommendations Report will be central to this. More information sharing amongst This requires a new partnership businesses and government • Provide advice to Australian between Australian businesses, agencies under the Team governments, specifically to governments and our academic Australia approach should help Austrade (as per the Interim community to develop emerging some businesses better achieve Report’s Recommendation 1.2) business opportunities in our the benchmarks set out in the • Engage and support other region. This national approach has discussion paper What Successful important organisations and served countries like Singapore Companies Do Well. networks in the Australia-Asia and Japan well in securing major business eco-system investment and other commercial Asia Business Action Group We recommend the ABAG have an opportunities in Asia. We believe With the publication of this independent chair and comprise this can be achieved in Australia report, the work of the Taskforce of senior leaders with broad through the following actions: only just begins. To continue executive experience in Asia with • Establishment of a national Asia and elevate its efforts, we the ability to drive the execution Business Action Group to guide recommend the establishment of the recommendations made by Team Australia efforts in Asia of an Asia Business Action Group the Taskforce. ABAG should work (ABAG) that should comprise closely with the Australian Trade • Development of the single data senior business leaders tasked and Investment Commission and reporting dashboard to measure with championing trade and the Department of Foreign Affairs our economic connectivity with investment growth in Asia and and Trade in this respect. the region providing high-level advice to • Creative and targeted promotion the Australian government and We look forward to working of success factors and stories business community, including with the Australian Government of Australian companies in Asia, on the implementation of the on next steps and towards the including through university recommendations made by the establishment of the ABAG. business schools, industry Taskforce. bodies, bilateral business The ABAG’s primary purpose councils and Austrade should be to identify priority Taken together these initiatives are opportunities to develop trade the important first enablers of the and investment in Asia and advise Team Australia strategy. on strategies to pursue these opportunities through close coordination between business, government and academia.

A Second Chance | 11 S5: THE ROADMAP FOR SUCCESS

Economic Connectivity • Exports expressed as a The eight success factors are: percentage of GDP Dashboard 1. Developing a long-term vision The Australia–Asia Economic • Export diversity (top 5 exports as a percentage of total exports) 2. Deciding on where, when and Connectivity Dashboard will how to compete measure and report on Australia’s • Inbound and outbound economic connectivity with investment – both direct 3. Understanding local business Asia across the areas of trade, and portfolio, which will be practices investment and mobility (tourism, measured separately education mobility and migration). 4. Managing relationships: The Dashboard will be developed • Mobility (inbound and outbound knowing who and how student mobility, inbound and and managed by Asia Society 5. Managing alliance and capabilities Australia in partnership and close outbound tourism and migration from Asia to Australia) coordination with the ABAG and 6. Maintaining reputation and the Australian Government. Other indicators may be added as image the project evolves. Data will be Rationale updated annually or bi-annually, 7. Empowering people close to 1. Data: There is no single depending on the schedule the market updatable and consistent and availability of data sources 8. Establishing and maintaining the data source on Australia- Asia (e.g. ABS, DFAT). The Dashboard right governance model connectivity in Australia will present these indicators in a user-friendly, visual online format As well as following these eight 2. Long-term view: The which will allow users to compare factors, successful companies have Dashboard will be a long-term data between countries, indicators adopted different approaches reporting and data tool, allowing and years. to entering markets depending to track trends over time on their risk appetite and the 3. Advocacy and public service: Learning from the best investment needed. Where possible, lower upfront investment The Dashboard will serve Asia is different and for many while relationships and market as a powerful advocacy and businesses, it is uncomfortably knowledge are developed will information tool for the ABAG so. What successful companies minimise the risk and reduce and all stakeholders in the do well is a blueprint for market expectations for rapid returns. We Australia-Asia economic space entry planning in Asia. There are have identified four entry models: and the broader community common patterns and approaches Agent/distributor, Joint Ventures, (including educators) that successful Australian Direct and Acquisition. companies adopted for their Asia Process and output strategies. We have identified Subject to further refinement them in the Special Supplement to of methodology and scope, the the Asia Taskforce Interim Report Check the Taskforce’s Special Dashboard will initially collect What successful companies do Supplement What successful and present to the public the well: Case study of Australian companies do well for practical data on the following indicators businesses in Asia. There are first steps on designing and of Australia-Asia economic no guarantees of success and executing Asia strategies. connectivity: one-size-fits-all models, but the It draws on case studies experience of the companies we • Two-way trade between Australia of successful Australian studied shows that strategies and businesses in Asia - Cochlear, and Asia, with a focus on exports business models tailored to the in goods and services ANZ, ResMed, Bluescope regulations and laws of mature Steel, Treasury Wine Estates, markets do not translate well in Bubs, Lendlease, Seek and most Asian markets. Blackmores.

A Second Chance | 12 S5: THE ROADMAP FOR SUCCESS

We have also concluded that a comprehensive risk management approach is an important Next steps component of any market entry strategy and Asia is no exception. • Work with the Australian Government on the establishment of Research by the Taskforce into the ABAG. successful and unsuccessful • Finalise the methodology and business plan for the Dashboard, and entries into Asian markets shows seek government and private funding to develop it, with a view to six important areas of risk: launch the Dashboard in 2021. political, legal and regulatory; competition; market dynamics; • Use the content of the Taskforce’s special supplement capabilities and infrastructure; “What successful companies do well” to design an education and relationships; and country mentorship program for Australian business seeking to enter Asia. specific knowledge.

2 Play to our strengths

Australia will have the best chance Country-sector Strategies We have identified the following to succeed in Asia if we know two countries and sectors our capabilities and comparative In the Interim Report we ready for the development and advantages well and identify recommended developing execution of such Team Australia markets and sectors where we are and executing country-sector strategies and illustrated this with most likely to get ahead. Playing strategies where Australia has case studies: to our strengths will become a comparative or competitive increasingly important in a more advantage. These strategies will • Indonesia and healthcare be enhanced by implementation competitive Asia. • Japan and financial services through a Team Australia model, To do so, we recommend similar in intent to the Japan Indonesia was chosen as an developing practical strategies to and Singapore models where emerging economy because of its enter the high-potential markets in industries and businesses align proximity and its large, growing Asia, use our vast network of free with government objectives, use middle class that remains for the trade agreements to enhance our the strengths of their countries’ most part unknown to Australian participation in Asia’s value chains, diplomatic networks and finance business. Healthcare is an example and resume and grow mobility with their plans through coordinated of how the Indonesian government the region. activities of the commercial banks is responding to this emerging and export credit agencies. middle class in ways that are opening up sophisticated new business opportunities.

A Second Chance | 13 S5: THE ROADMAP FOR SUCCESS

At the lower income end it needs The markets that we have chosen to improve the efficiency of service to focus on present greenfield delivery to speed up the rollout opportunities for Australian of a promised national healthcare businesses to grow in Asia. As we system. But at the higher outlined in our Interim Report, income end, healthcare users are the industries and countries demanding better services to selected were not intended to avoid having to travel abroad for be exhaustive, but rather serve treatment and the government as examples to illustrate the wants to retain this high income opportunities and what a Team spending at home to help Australia approach can do. We also underpin overall improvements in see Korea and Viet Nam presenting the system. significant new opportunities to We also selected Japan to Australian business and we have demonstrate the opportunity to outlined new efforts in these broaden our economic relationship markets in this Final Report. with a longstanding and very India is the world’s 5th largest familiar trading partner in the economy and it is second largest in resources sector, which is now population terms. Like Indonesia, an advanced, mature economy. India remains relatively unknown This case study demonstrates to Australian businesses, but there how Asia contains a diverse and was little we could add to the work evolving spectrum of economic that Peter Varghese AO led in 2018 development levels and should not on the India Economic Strategy to be seen through a static or single 2035. China is already our largest lens by Australian businesses. In export market. Consequently, Japan’s case, a slower growing we felt that Australian businesses economy still throws up were already familiar with the opportunities to service a growing opportunity that China presented. population of retirees and future While we have not focussed on retirees with new financial services. China and India, this should not be interpreted as diminishing the opportunity that those countries, or indeed any of the other Check the Taskforce’s markets in the region, present for Discussion Papers: Taking Australian businesses. Australia’s healthcare innovation to Indonesia along The Japan relationship also with Investing in Indonesian underlines the value of gradually Healthcare, and on Japan building longstanding people The Right Product Sold The to people ties in the broader Right Way, for details of the business community in other proposed country-sector countries. The Australia Japan strategies and our thinking Business Cooperation Committee’s about the Team Australia partnership with the Japan approach to their execution. Australia Business Cooperation Committee has been in place for more than 50 years.

A Second Chance | 14 S5: THE ROADMAP FOR SUCCESS

CASE STUDY HEALTHCARE IN INDONESIA

The context The opportunities The strategy The Indonesian Australia has long The Taskforce economy has achieved been a leader in the Discussion Paper consistent economic growth over global healthcare market, and Taking Australia’s healthcare the last two decades, delivering is recognised for its world-class innovation advantage to better social and economic healthcare system, its high quality Indonesia draws attention to outcomes for its large and ever- healthcare education and training Australia’s healthcare innovation expanding population of around capabilities, and for its leading role precincts and how the Australian 270 million people. in the research and development Government can leverage of medical devices and technology. precinct capabilities in healthcare The IA-CEPA opens up new Australian companies should be technology, medical services, pathways for Australian business well positioned to capitalise on healthcare and pharmaceutical in healthcare. The Taskforce the growing opportunities in the infrastructure to support Discussion Paper on opportunities sector, while assisting Indonesia Indonesia’s health-related for Australian business in to develop its healthcare capacity. challenges. Indonesian healthcare outlines The following areas have been several areas where Australia’s identified as ones where there Through a case study focussed competitive advantage can is good alignment between on Monash Technology Precinct, contribute to Indonesia’s growing Australia’s comparative advantages we argue that medtech and healthcare demands. and Indonesia’s needs: pharmaceutical innovation precincts form a ready-made 1. Development or expansion of cluster that are open to hospitals and other healthcare commercial partnerships and have facilities access into international markets. 2. Provision of specialised health They are existing models that services/facilities to treat non- demonstrate Australia’s advantage communicable diseases in innovation, talent development, industry linkages and international 3. Assistance with aged care partnerships to deliver improved facilities and treatment healthcare and market growth. If 4. Medical technology adequately supported with three export development enablers – 5. Digital health insights, outreach and brokering – precincts can provide affordable 6. Building Indonesia’s healthcare healthcare to citizens, create workforce through training and jobs - and better-skilled jobs - and exchange programs contribute to export industries.

A Second Chance | 15 S5: THE ROADMAP FOR SUCCESS

These actions will also encourage • Work with Indonesian Enabler 3: Focus support the expansion of service delivery governments at the national on network creation and and research partnerships that and sub-national levels, as well relationship development with further generate new innovative as private sector hospital and Indonesian partners growth pathways for Australia into medical centres and university growing markets like Indonesia and research centres to help develop • Establish links and strengthen the broader Indo-Pacific region. a prioritisation framework for ties in Indonesian markets, their skills and technology needs. including identifying potential Australia’s healthcare innovation Undertake a market feasibility private sector, multinational, precincts are locations where study that identifies Indonesia’s philanthropic or multilateral research and business converge market requirements, investments to create commercial and export opportunities, barriers, gaps and • Connect with Indonesia’s ready products. They form a ready- best practices industry bodies to develop made cluster open to commercial • Develop and implement a an understanding of market partnerships and access into requirements and how to Indonesia. program of market insights and business networking targeting effectively leverage existing Three enablers are needed so innovation precincts networks and potential partners that an effective supply-demand • Build the supply-demand • Establish commercial and value-chain can be crafted that relationships between the sector relationships through ultimately results in the transfer relevant organisations trade activities, facilitating of knowledge, technology and collaboration and partnership capability between nations. Enabler 2: Increase branding and building government-to- These enablers will improve the and promotion of Australia’s government relationships connectivity between the two relevant healthcare innovation countries and, beyond sharing • Map and leverage influential capabilities knowledge, will ultimately allow alumni and existing networks in Indonesia, including research for businesses to trade in areas of • Identify opportunities at collaboration networks importance to both nations. Indonesia’s national and sub-national levels to promote Enabler 1: Insights medtech and pharmaceuticals • Improve knowledge and capability, services and understanding of commercial education. opportunities in Indonesia’s • These could include vocational healthcare and tertiary education in allied • Increase branding and promotion health; engineering; ICT; design; of Australia’s relevant healthcare quality control; scientific innovation capabilities assessment & evaluation; business administration • Focus support on network and management; and creation and relationship entrepreneurship development with Indonesian partners • Research training in medical research and life sciences • Provision of diagnostic, medical and clinical services to Indonesian patients, both on-shore, off-shore and telemedicine

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CASE STUDY FINANCIAL SERVICES IN JAPAN

The context The opportunities The Australian Financial Services industry has been evolving rapidly Japan boasts a highly Off the back of over the past 20 years. Arguably it successful financial Australia’s large and is ahead of where Japan is evolving services industry, buoyed by successful superannuation-based to with the Australian shift from its historical economic rise. Its retirement savings system we being predominately agency/ economy remains the third largest have developed a large and mature adviser intermediated in the 1990s with GDP of US$5 trillion or more domestically owned and operated to the contemporary structure than three times Australia. The funds management sector. This of heavily vertically integrated Japanese Yen remains the third sector services the investment manufacturing/distribution models most internationally used currency needs of superannuation via acting which are commission-free with a for foreign exchange trade after the as a third-party provider or via focus on client-driven advice. The US dollar and the Euro. Australia the manufacturing of in-house products we have developed as a also possesses a sophisticated capabilities within super funds. result should therefore be more financial services industry that There are some very obvious likely to be attractive to Japan as it is well regarded as extremely opportunities for Australia in too moves in this direction. stable. Australia’s success in exporting this capability to Japan financial services is underpinned via either the establishment by a mandated retirement of locally based offices, or the savings scheme and bolstered establishment of partnerships via The strategy by the continued strength of its distribution agreements or formal investment funds sector. joint ventures. 1. The right product, sold The Taskforce Discussion Paper Institutional distribution in Japan is the right way: The first step The Right Product Sold The arguably more profitable for fund to success for Australian Right Way provides a starting managers. There is a bifurcation of fund managers in Japan is point for Australian financial attractive institutional capabilities understanding what products services businesses to define for Japanese portfolio constructors will work for the Japanese the opportunities in Japan and, between low cost passive institutional and retail markets perhaps most importantly, allocation and active investment in and finding distribution partners illustrate how organisations can real assets. The macroeconomic who can access the client navigate the inevitable risks environment continues to be the segment to sell these products. by bringing the Team Australia crucial determinant of successful approach into their strategy. product offerings by foreign fund managers. Most notably, The opportunities in Japan extend the longevity of the Japanese beyond financial services to areas population has led to the popularity such as social and economic of long duration products with infrastructure, residential a reliable yield, particularly from construction, smart cities and infrastructure projects. new energy.

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2. Australian fund and asset 3. The challenges of access to 4. Market entry strategies: manager skills: Many Australian the market: The Japanese fund and asset managers have competitor landscape is made • Be clear on the customer recognised skills and experience up of several distribution group you are targeting in the specialist asset classes powerhouses. While often • Ensure the product is unique becoming more sought after lacking the innovative products and specifically suited to Japan’s in Japan (for example, ESG, now in demand (due to investment needs, including the infrastructure, real estate, demographics, economic relevant risk profile energy and healthcare). drivers, government policy However, assembling the changes etc.) they still maintain • Investigate and analyse quality teams required for them historical “ownership” of their whether to partner or not to succeed is not straight- keiretsu-affiliated investors, • Establish a brand based for forward due to Japan’s unique long-established “credibility” reliability of unique products business culture and bifurcated among culturally risk-adverse • Any decision to enter Japan recruitment market investors, as well as deep local must be based on long-term knowledge and influence. commitment Whether the new entrant chooses a local partnership, • Identify, attract and develop or to establish a distinctive quality leadership, IP, market niche, their long-term operational staff and establish commitment to investment in an appropriate cross-cultural people and sustainable support business culture (financial and governance) is the key to success.

CASE STUDY THE NEXT FRONTIERS: REPUBLIC OF KOREA AND VIET NAM

Republic of Korea The Australia-Korea Business This will require more critical Health and biotechnology: Given Council identifies new energy, minerals, which Australian exporters its strong and effective response to health and biotechnology, defence are well placed to capitalise on given the pandemic, Korea’s health and and financial services as the next our abundant supply. The Korean biotechnology sector has drawn high-potential sectors for bilateral Government’s Hydrogen Economy global plaudits. With close to 100 economic collaboration. Roadmap elevates hydrogen companies coming together in an energy as a major pillar of its energy exercise of collaborative innovation, Hydrogen: Australia has long been policyto power cars, trucks, trains Korea was among the first countries central to Korea’s energy security and homes. As Australia develops to develop COVID-19 testing kits – a through the supply of gas and its domestic hydrogen production, critical tool to fight the pandemic. coal exports. Home to the world’s Korea’s commitment to this exciting This collaborative spirit underpins leading battery manufacturers, new technology will help us build an the Korean Government’s Korea will continue to ramp up export industry valued in the billions Bio-Health Industry Innovation its production capacity to meet (refer to the AKBC Discussion Strategy which creates partnership domestic and global demand. Paper Mapping the Australia-Korea opportunities for Australian Hydrogen Intersections). companies in research, drug discovery and commercialisation.

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Defence: Building upon our Viet Nam proud history as one of the first responders to the Korean War, Viet Nam presents another Significant opportunities for our two nation’s defence ties are significant economic opportunity Australian businesses exist in set to further strengthen with for Australian businesses. The agriculture (beef, grains, cotton, Korea’s growing participation in new report A Path to Viet Nam: horticulture); processed food; the development of Australia’s Opportunities and Market services including education, sovereign defence industry Insights for Australian Business health, environment, ICT, mining capability. Hanwha Defence by Asia Society Australia and The equipment and technology; and Australia, which was recently Australian APEC Study Centre Industry 4.0. awarded LAND 8116 (the Self- at RMIT University, released in December 2020, is the first Australian businesses can Propelled Howitzer program), is leverage a thriving bilateral one of two companies shortlisted recent comprehensive study of the scope and potential of the ecosystem of relationships to forLand 400 Phase 3 – Land support their efforts in Viet Nam. Combat Vehicle System (Infantry Australia-Viet Nam business Fighting Vehicle). This $18.1- relationship. $27.1 billion dollar program is the Viet Nam is a perfect economic Australian Army’s largest ever partner for Australia, as both acquisition program and has the nations have complementary potential to cement Australian- economic systems and seek Korean defence relations. diversification of their trading Next steps Financial services: Australia’s partnerships, amidst a weakening • Finalise the country- superannuation system is the envy global economy and geopolitical sector strategies of the world. This is especially true tensions. as a priority for the amid COVID-19, where this vast The countries have elevated their ABAG agenda and in savings pool allows us to urgently government-to-government partnership with the deploy capital to revitalise the relationship to the highest Australian Government economy. There is no shortage of level creating a favourable prepare the execution opportunity for Australian fund environment for businesses plans in 2021. managers looking to partner in both nations to engage and with Korean pension funds and generate commercial outcomes. • Link the ABAG agenda insurance companies as we with the Australian embark on an infrastructure-led Viet Nam has a unique and Government’s Indonesia economic recovery. As the Korean fast-paced market and a vastly and Viet Nam economic Government tackles corporate different political system strategies . pension reforms – necessitated by requiring businesses to have a rapidly ageing population and the comprehensive, long-term and lowest birth rate amongst OECD tailored entry strategies, based countries – it has consistently on local knowledge, competitive looked to the Australian model. advantage and due diligence.

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3 Learn to navigate a more complex China

China continues to be the The value of goods exports which While Australia cannot back single largest global economic are subject to these punitive trade down on principles, we also opportunity for Australia. The measures in 2020 alone is close to have no choice but to maintain country takes more exports than $20 billion. A further $28 billion in the relationship with China. Our Australia’s eight largest other services (education and tourism) democratic values are often markets, excluding Japan which is have been affected by the COVID- fundamentally at odds with China’s number two. Over the past decade, 19-induced travel restrictions (not and this affects the relationship 70% of the increase in our exports linked to China’s trade measures on a range of fronts from Asia’s has come from China alone. towards Australia). security architecture to human rights. Structural political, The Australian Government’s We are not alone in navigating a values and strategic differences 2017 Foreign Policy White Paper difficult relationship with China. with China will remain for the presented a base case scenario From Viet Nam to South Korea, foreseeable future. But ultimately showing China’s economy adding the great trading nations of Asia China will remain a large trading more new purchasing power than have had to negotiate complex partner and a major influence on the US, Japan, India and Indonesia relationships with China for the regional and global issues that combined in the period to 2030. centuries. We have much to learn matter most to Australia. The For many businesses China will from their experiences. challenge is to craft a cohesive, remain the single largest business national interests-based approach, opportunity, but the risks of doing We need to be principled in that we will continue to live and uphold bringing together our business, business with and in China have education, Commonwealth and increased dramatically. the values of the rule of law, human rights and civility to other nations. State government and community Australia’s relationship with China And we need to be realist in that stakeholders and balancing has deteriorated in 2020 and is our sovereignty and security economic, national security and in the worst state it has been in comes first and is shaped by our social considerations. the 50 years since diplomatic unique geography and strategic Diversification of Australia’s trade relationships were re-established circumstances. Navigating our partnerships must now be a in 1972. China has applied or hinted relationship with China requires key priority. But diversification at punitive trade measures against strategic patience, avoiding for Australia must mean China several Australian industries. overreaction and emotion, and rather than China or. So Formal or informal trade barriers maintaining long-established learning to navigate a more have been imposed on farm personal networks, and continuing complex relationship with China products including barley, wine, to be prepared to cooperate on is imperative and efforts to beef, seafood, timber, cotton and issues that benefit both countries. ensure both countries engage sugar. There have been less specific constructively must be a priority. warnings about services exports such as education and tourism.

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Education is a case in point. The Taskforce’s Australian There are many opportunities Universities, International Students for diversification after high and China Discussion Paper Next step dependence on Chinese students suggests the following strategy for and concerns about a decline in this vital sector: • As a part of the Asia their numbers. But there continues Business Action Group, to be a strong demand for overseas 1. Diversify the international to establish a group of study in China and delivering that student composition international education education can still be a point of 2. Sharpen the focus on the all- leaders to provide mutual interest in the bilateral round quality (quality in, quality ongoing advice to relationship. through and quality out) of the the ABAG , Australian Chinese student cohort governments and Australia’s international education university community on is our success story in Asia and the 3. Increase strategic partnerships international education main interface of our engagement with international institutions policies and strategies, with the region. Despite the with a focus on Asia. COVID-19 disruptions, it will 4. Leverage alumni networks remain a key part of Australia’s multifaceted relationship with 5. Accentuate the place of Asia, as well as a way to build intensive courses in the sector’s Australia’s knowledge of the international offerings region and project our soft power. Recommendations for the But Australia’s international Australian Government: education sector faces challenges from the pandemic which forced 1. Sponsor combined government, closure of international borders, business and education trade international competition, and missions to target countries changes to domestic education and foreign policy settings related 2. Expand special programs to to international education and support intensive inbound research amidst the deterioration student study visits of the relationship with China. 3. Host sector-wide events for Chief among these challenges international alumni is how Australia can maintain its position as a key global destination 4. Actively encourage employers to for Chinese higher education provide in-program placement students – by far the largest opportunities and on-shore international student cohort in post-study work opportunities Australian universities. for new international graduates 5. Sponsor offshore initiatives to Check the Taskforce’s assist new graduates to secure Discussion Paper Australian quality jobs in their home Universities, International country Students and China for our approach to international students in Australia, and especially from China, as the largest cohort.

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4 Reboot Asia literacy

The Taskforce believes that In its July 2020 report Winning The Taskforce’s Discussion Paper structural but practical and in Asia, Asialink Business found Reimagining Australia’s Asia achievable adjustments need that more than 90% of ASX200 Engagement Capability proposes to be made to our national Asia directors did not meet the four critical interventions to be capability policies. It is wrong competency requirements to led by government and business to conclude that the previous be considered “Asia-capable”. It to spotlight, secure, scale-up and attempts to develop Australia’s is clear as a starting point that strategise Australia’s long-term Asia literacy failed. They have all Australian businesses must Asia engagement capabilities: made incremental changes on invest far more in developing Asia which newer sets of policies and capabilities at the board and senior Spotlight: programs have been built. The executive levels. • Immediate action should be only failure was in our inability to taken to spotlight and secure achieve a national scale and impact The other dimension of Australia’s Asia literacy debate and policy- initiatives and models that have effectively and quickly – perhaps an proven success in enhancing overambitious task from the start. development is its fragmentation and the lack of collaboration Australia’s Asia engagement Asia is different and for many, it between educational institutions, to ensure they are sustained is uncomfortably so. Experience government, non-profit through the challenge of tells us that success will require organisations and business. There COVID-19 and scaled-up as businesses to work closely with is also an absence of clear advocacy key elements in the strategy government agencies to develop by the very top of Australian political for recovery. a deeper understanding of our and business leadership of the • Fund ongoing opportunities for neighbourhood – its cultures, importance of Asia competencies to teachers, especially in rural and politics, societies and economies. our prosperity. remote schools to participate If we don’t, companies are in BRIDGE “teacher-led” destined to make the same Asia engagement intercultural programs. mistakes as others before them capabilities and the outcomes will inevitably • Future-proof existing proven be the same. The Taskforce identified our overall models of in-country learning Asian engagement competencies with commitment to long as a critical national asset that term funding, and support for emerging blended and digital Check the Taskforce’s requires ongoing investment engagement models. This should Discussion Paper Reimagining by business, government and include the New Colombo Plan Australia’s Asia Engagement universities. While recognising for study and internships in Asia Capability and also Managing the efforts and achievements in for outgoing Australian students, Bribery and Corruption: A bringing Asia literacy to the fore and the Australia Awards for framework for Australian of national education policy and incoming Asian emerging leaders businesses for our thinking debates over past decades, it is to study in Australia. on policies and programs to clear that a new model is required enhance Asia engagement for ensuring Australia’s Asian and risk management engagement capabilities are fit competencies in Australia. for a more competitive external landscape and the challenges that lie ahead.

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Secure: Strategise: The key findings of the paper: • Recognise that today’s Asia • Establish a strategic national 1. Bribery and corruption (B&C) engagement capabilities include network to champion Australia’s is illegal in all markets in Asia continuing commitment to Asia engagement capabilities for and in Australia traditional Asian language and long-term influence and impact. cultural programs but also 2. Australian businesses can be • Support ongoing collaborative demand broader emphasis highly successful in Asia with dialogue to share experiences, on the skills and capabilities well-structured frameworks to advocate change, and role required to navigate the manage B&C risks model the skills and capabilities complexities of our dynamic required for deeper, more 3. B&C risk management must be world. We must be able to effective, long term engagement an integral part of any market build expertise and develop in Asia. And young voices should entry strategy with pre -market capabilities on multiple fronts. be brought to the table. entry research and due • Business plays a critical role diligence particularly important Importantly, Asia literacy should in highlighting the value and be directly linked to business, significance of deep Asian 4. Establish a comprehensive B&C education and employment language and cultural studies risk management framework outcomes for Australia. The New expertise and should invest that evolves and is live in the Colombo Plan is a vital Government in building and maintaining business at all levels program that supports this idea Australia’s Asia expertise by and one that requires greater 5. Ensure Asian experience building stronger collaborations business support. and B&C expertise is within with Australia’s Asia-focussed reach through targeted hires universities, institutions and and trusted advisors and research centres along the way. Risk Management Capabilities: Bribery and consultants • Develop and disseminate an 6. Stakeholder mapping is Asia-ready predeparture training Corruption critical to understand and program for all Australian tertiary In the course of our research, manage vitally important in- students that take up outbound the overwhelming majority of market relationships scholarships to the region. Australian companies identified bribery and corruption as a Scale-up: 7. B&C must involve a whole significant risk and impediment to of company approach from • Invest in targeted efforts Australian business performance the Board cascaded down to recognise, mobilise and in Asia. In response, the Taskforce through the company and its showcase the wealth of Asia Discussion Paper Managing business partners capability, talent and leadership Bribery and Corruption: A potential that exists already, framework for Australian 8. Market-relevant training, especially amongst Australians businesses was developed delivered in local languages and with Asian heritage. to provide practical guidance reflecting in-market conditions to Australian businesses and significantly enhances B&C • Identify and showcase models the Australian Government on risk management of success, to engage business managing this category of risks. in the leadership challenge 9. Monitoring, audits and of building Asia engagement Most importantly, the paper transparent processes capabilities at home demonstrates that it is possible for will ensure B&C issues are Australian companies to reconcile identified, escalated and value and values. However, managed appropriately doing so requires a keen eye and considerable skill. 10. Australian Government agencies can do more to support Australian businesses to understand and deal with B&C issues

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Next steps

• Use the content of the Taskforce papers Managing Bribery and Corruption: A framework for Australian businessesand What successful companies do well to design a learning module for a national education and mentorship program for Australian business seeking to enter Asia. • Establish a program of Asia Business Champions (led by the Business Council of Australia and Asia Society Australia), inspired by the successful model of Male Champions of Change program to promote the importance of Asia competencies nationally. As a part of the Asia Business Action Group,establish a group of Asia capable leaders and a knowledge hub on best practices and policies in developing Asia literacy. This would provide continuing advice to the Asia Business Action Group, Australian governments and education sector.

5 Champion our rich Asia talent

The richness of Australia is not just Asian-Australian Business: Businesses should in our minerals and resources, but community develop talent management the diversity and dynamism of our plans and adjust strategies, people. The Taskforce believes that Government: The Australian policies and procedures Australia has a unique talent and Government should collaborate across all human capital areas leadership pool - Asian-Australian on criteria to require non-public (recruitment, retention, and and diaspora communities - that sector employers and companies promotion) to enable greater is chronically under-engaged in with 100 or more employees to participation of Asian- Australians our pursuit of greater economic define, collect, disclose and report and Asian diaspora members in engagement with the region. data on cultural diversity. leadership of their organisations; The Taskforce Discussion Paper collect, monitor and report Professional and industry A Forgotten Advantage: Enabling data on progress of such plans bodies: Professional and industry Australia’s Asian-Australian and and strategies; and involve bodies should elevate Asia Diaspora Communities proposes boards and management in capabilities to be a part of formal a suite of recommendations to their implementation and professional accreditation and business and government on how communication. development programs; develop to engage more effectively and leadership networks (similar to the inclusively our Asian-Australian and Champions of Change for gender diaspora communities and talent: diversity) to share best practices, policies and experiences in cultural diversity.

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Talent pool: Business and Check the Taskforce’s government should co-invest and Discussion Paper A Forgotten co-develop a national program Next step Advantage: Enabling Australia’s to nurture the top 100 emerging Asian-Australian and Diaspora Australian leaders with experience • As a part of the Asia Communities for our thinking in Asia, to build a future leadership Business Action Group on Asian-Australian and talent pool for our engagement to establish a group and diaspora leadership, talent with the region. knowledge hub of Asian- and contribution to Australia’s Australian and diaspora engagement with the region. Mentoring: Establish a partnership community leaders to and mentoring program to share provide ongoing advice Australian diaspora’s knowledge of to the ABAG , Australian Asia with leaders and professionals governments and with no experience in Asian and business community. international environments. Australian diaspora community Diaspora identity: The Policy would replace the description The paper also recommends expatriate for overseas based the development of an Australia Australians with diaspora to diaspora policy to develop a foster greater affinity, identity and vision for a more connected connection with Australia. global Australian community and recognise the important Success stories: The Policy contribution they make while should include active promotion abroard and upon their return of initiatives such as the Advance home with valuable new skills. The Awards by Advance.org and the elements of such policy would be: launching of a national campaign showcasing success stories of the Government: The Australian Australian diaspora and explaining Government should aim to why the country needs to better be a global leader in diaspora leverage it. engagement and empowerment. Leadership: An Australia Diaspora Empowerment: The diaspora Council should be created and should be supported and co- led by the Department empowered to contribute more of Foreign Affairs and Trade, substantially to the development of Austrade, and Advance.org, with Australia. a membership comprising key Better data: Develop more industry and internationally and accurate and comprehensive regionally-focus civil society bodies data on the size, location and in Australia and abroad. demographic profile of our New communities: Connect diaspora abroard and those who with new diaspora communities have returned home. overseas and support further research to better understand ongoing changes to Australian communities overseas.

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RECOMMENDATIONS

1 To be successful in Asia, Australia needs a greater collaboration and shared leadership of Australian business, government and academia and a sharp focus on measuring outcomes. We need to tell our story well through a national brand. We should combine our capabilities in a unified and sustained push to achieve economic and social outcomes in the region. These outcomes should not only benefit Australia but help our neighbours Team Australia achieve their development goals.

Australia has led the world in its health response to COVID-19. This puts 2 us in a strong position to leverage this success in Asia. We have continued as a reliable supplier of high-quality products and services in contrast to disruptions felt by our competitors. Our success also sends a credible message to future international students, highly skilled migrants and innovative Asian businesses looking to establish themselves abroad that Play to Australia is one of the safest and highest quality places to live and work, our strength with institutions and a business culture that puts people and health first.

3 Australian business is adjusting to greater friction in the relationship with our largest trading partner. We are hardly alone. From Viet Nam to South Korea to Japan, the great trading nations of Asia have had to negotiate complex relationships with China for centuries. Navigating our relationship with China requires strategic patience, avoiding overreaction and panic, Learn to navigate a maintaining long-established personal networks, and continuing to focus on more complex China the positives.

4 Maintaining, growing and diversifying Australian businesses in our region requires a workforce that is literate in Asian languages and cultures. Traditional Asian language programs on offer in our higher education institutions are diminishing. If we are to embrace the trade opportunities offered by Australia’s expanding network of trade agreements with Asian Reboot Asia literacy nations, we need to urgently reverse this trend.

5 Australia’s decades long immigration program and multicultural policies have given us an active, entrepreneurial Asian-Australian diaspora which makes up 12% of Australia’s population. More than 70,000 scholarships and grants have been awarded under the New Colombo Plan for Australian students to study in Asia. Australia has a rich Australian diaspora with deep Champion our Asian experience. It is one of our greatest competitive advantages. rich Asia talent

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Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 1 1 Australia should set itself a target to increase exports as a percentage of GDP from the current level of 29% to 35% percent by 2030 backed up by a comprehensive set of strategies to achieve this goal. This should include commitments from larger businesses to bringing Australian SMEs into their supply chains as they grow offshore. 2 Business and government should establish a small agile national business advisory group that works with the Federal Government and Austrade on international trade and investment promotion and facilitation. The advisory group would provide ‘hands-on’ focussed business inputs to Austrade and to the delivery of joint activities in Australia and Asia. 3 The Federal Government should continue work on a new national brand. Australian businesses should use the brand wherever possible. Government should consider strategic partnerships with the major Australian businesses, regions and sectors closely associated with Australia’s brand. They could include Qantas, the tourism, agriculture and education sectors, Sydney and Great Barrier Reef. 4 Australia should consider developing a model of government-business coordination for market entry, similar in intent to the Japan and Singapore models where businesses align with government objectives, utilise the strengths of their countries’ diplomatic networks and finance their plans through coordinated activities of the commercial banks and export credit agencies. 5 The Federal Government should strengthen Austrade by enabling a more market- responsive outcomes focussed business model, strengthened digital capabilities, greater connections with businesses through appointments of staff with Asian business experience and seeking ongoing feedback from business on Austrade’s performance and strategy. KPIs should be aligned with these objectives. Austrade could establish a panel of Asia experienced executives who can act as mentors to businesses looking to expand in Asia.

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Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 1 6 The onshore and offshore service delivery model for Austrade must be able to support the different needs of various customer segments from SMEs through to larger businesses. Consideration should be given to providing highly skilled and business experienced ‘concierge’ services (with a focus on SMEs) going into high-potential markets in Asia, which combines information assistance, grants (through targeted Export Development Grants), finance (through Export Finance Australia) and a consulting service to qualified businesses to help accelerate market entry and/or growth. 7 The Federal Government should use the National Cabinet and the National Foundation for Australia-China Relations to seek a cohesive, national interests-based approach to the relationship with China which brings together and balances economic and national security considerations. There should be a strong business representation in this forum. 8 The Federal Government, in collaboration with the BCA, Australian Industry Group and the bi-lateral business councils, should elevate and resource high level leadership forums modelled on the Australia-New Zealand Leadership Forum for priority markets including China, India and Indonesia as the premier bilateral track two policy and business forums. Each forum should be headed by a senior business leader. 9 The Federal Government should consider establishing a role of National Talent Commissioner to coordinate government and business policies and programs to use more effectively Asia capable professionals in our Asian-Australian community, diaspora and international alumni networks in economic engagement with Asia. 10 Business and government should adopt cultural diversity strategies and Asia- upskilling programs for their Boards and executive teams, using lessons and experiences in recent years in the promotion of gender diversity.

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Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 2 11 The Federal Government should accelerate the development, regulatory approval and implementation of “a single window” - a secure digital interface between government and industry to meet all international trade regulatory requirements, which will significantly improve the Australian international trade environment and integrated interaction between government and business. 12 Develop a model for regular, targeted, high- impact offshore trade and investment events and missions supported by digital and online campaigns in the priority Asian markets which bring together carefully pre-qualified businesses in strategic sectors and Federal and State government resources. These should be headed by a senior business leader with experience in the target country and supported by senior Federal Government officials. Outcomes should be measured. 13 The models used to establish the National COVID-19 Coordination Commission and the Freight Co-ordinator-General should become a normal part of our approach to solving identified problems or barriers. The Freight Co-ordinator General role could be extended, for example, to address longer term concerns about freight capacity/cost and the logistics networks needed to support our food and agricultural industries. 14 A senior business executive should be appointed to lead the development of plans to build approaches to new markets (eg: Indonesia) for industries where Australia has comparative or competitive advantage (eg: healthcare) working in tandem with the Australian Government.

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Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 2 15 Business and the Federal Government must work together to organise a high-level trade mission to China, as soon as international travel restrictions are lifted. 16 Business and government should work together to elevate the role of the Asian- Australian community, diaspora and international alumni networks in advancing Australia’s economic and soft-power objectives. 17 Business and government should pursue more robust and regular engagement on national security issues (particularly, critical infrastructure, foreign interference, cybersecurity and economic coercion). Business should invest in board and executive capabilities in geopolitical risk, cybersecurity, foreign interference and economic coercion; maintain regular dialogue – including through major industry bodies and think- tanks with the national security community; and undertake specialised training. National security agencies should operationalise regular outreach to business community, invest in their business and economic capabilities, including through establishment of senior business outreach roles and active business liaison offices in state capitals.

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Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 3 18 The Federal Government should expedite the implementation of recently introduced changes to Australia’s foreign investment review framework, to speed up approvals, so that Australia’s profile as one of the world’s most attractive investment destinations is maintained. A national brand roll-out should be used as an opportunity to promote Australia as an attractive investment destination. 19 Export Finance Australia, working in tandem with commercial banks, should continue to seek opportunities to enhance its role in assisting businesses, especially SMEs, to reach global markets. Australia could draw on examples from successful programs in other jurisdictions. 20 Business benefits from the global rules-based trading system which underpins our free trade agreements.The Federal Government should continue to build on our multilateral, regional and bilateral free trade agenda, including pursuing reform of the World Trade Organization, expanding our trade agreement network and upgrading existing bilateral FTAs. It should work toward entry into force of the Regional Comprehensive Economic Partnership and expanding membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. 21 The Federal Government should continue to work in partnership with like-minded nations, lead the global and regional agenda on digital trade standards and governance, drawing on the early success of the Australia-Singapore Digital Economy Agreement.

A Second Chance | 31 S6: RECOMMENDATIONS

Recommendations Team Play to our Learn to Reboot Champion Australia strength navigate a Asia our rich more complex literacy Asia talent relationship with China

Priority 3 22 The Australian Government should continue to support the New Colombo Plan (NCP). Business should commit to providing 30 internships to returning NCP scholars each year and increase connectivity with the NCP alumni network. The Australia Awards which provide scholarships and short courses to emerging leaders from developing countries should be continued. 23 The Federal Government should conduct a baseline review of Australia’s trade and investment position compared with our competitors in Asia (for example New Zealand, Canada, Japan), taking into account market access outcomes delivered by FTAs and other policies and mechanisms, such as export financing, trade promotion, and information access. This should include a clear identification of market access gaps across goods and services sectors relative to that of our competitors. 24 Business and government should engage the Asian-Australian community, diaspora and international student alumni networks in Asia in our trade and investment agenda in Asia through recruitment and career programs, board appointments, mentorship, leadership and education programs.

A Second Chance | 32 About the Asia Taskforce

In October 2019, the Business Council of Australia and Asia Society Australia together with knowledge partners PwC Australia and the University of Sydney Business School formed the Asia Taskforce of senior leaders from the business, education and government sectors to examine how Australian companies and organisations can increase their presence and position in Asia to ensure our continued prosperity and deliver progress for future generations.

While the Taskforce members and contributors have provided input into the Final Report, the views expressed do not necessarily reflect the views of any individual or the organisations they represent.

Leadership Mark van Dyck, Regional Managing Director, Compass Group Asia Pacific (Taskforce Chairman) Tim Beresford, Acting Chief Executive Officer, Austrade Dig Howitt, Chief Executive Officer, Cochlear Philipp Ivanov, Chief Executive Officer, Asia Society Australia Andrew Parker, Partner and Asia Practice Leader, PwC Australia Jennifer Westacott AO, Chief Executive, Business Council of Australia Gregory Whitwell, Dean and Professor, The University of Sydney Business School

Steering Committee and Special Advisors Justin Breheny, Chairman, Nuchev Bruce Cooper, Chief Executive Partner, Clayton Utz Swati Dave, Chief Executive Officer, Export Finance Group Sir Rod Eddington AO, Chairman, JP Morgan Asia Pacific Advisory Board Stuart Fuller, Chairman, Asia Society Australia Andrew Gauci, Managing Director and Head of Japan, Lendlease Adam Handley, Partner and China Markets Leader, MinterEllison Debra Hazelton, Chair, AMP Limited Christopher Langman, Deputy Secretary, Trade, Investment and Business Engagement Group, Department of Foreign Affairs and Trade Richard Maude, Executive Director (Policy) and Senior Fellow, Asia Society Policy Institute Bob Seidler AM, Senior Regional Executive Asia Pacific, Hitachi Ltd Vikram Singh, Country Head (A&NZ), Tata Consultancy Services

Warwick Smith AO, Chair, Trade and Investment; Global Engagement Group, Business Council of Australia

Taskforce Secretariat Sung Lee, Director, Asia Practice, PwC Australia (Head of Secretariat) Ted Burgell, Senior Policy Adviser, Business Council of Australia Lizzie Rae, Project Manager, Compass Group Asia Pacific Thomas Soem, Executive Director (Sydney), Asia Society Australia

Editor Greg Earl, Editor, Briefing Monthly and Disruptive Asia, Asia Society Australia

A Second Chance | 33 Contributors Edward Aspinall, Professor and Former President, Asian Studies Association of Australia Chris Bartlett, Partner, Strategy&, PwC Australia Tamerlaine Beasley, Managing Director, Beasley Intercultural Anthony Bishop, President, APAC, Cochlear Catherine Brenner, Non-Executive Director Caitlin Byrne, Professor and Director, Griffith Asia Institute, Griffith University Penny Burtt, Group Chief Executive Officer, Asialink, University of Melbourne Inca Camilla, Senior Associate, Economics and Policy Advisory, PwC Indonesia Chris Cartmell, Counsel, Tiang and Partners (associated with PwC Legal International Pte Ltd) Georgia Dawson, Senior Partner, Freshfields Bruckhaus Deringer Emma Daly, Senior Manager, PwC Australia Glyn Davis AO, Distinguished Professor, Crawford School of Public Policy, Australian National University Joanna Donagan, Director, Global Initiatives, Monash University Rory Donohue, Manager, Risk and Forensics Consulting, PwC Australia Nicholas Farrelly, Professor and Head of School, Social Sciences, University of Tasmania Helen Fletcher-Kennedy, Chief Operating Officer, Australia-Indonesia Centre Liz Griffin, Executive Director, Australia-Korea Business Council Sam Hallinan, Incoming Chief Executive Officer, Schroders Australia Jason Hayes, Partner and Leader, PwC Asia Pacific Japan Practice, PwC Australia Robert Herdiyanto, Manager, Economics and Policy Advisory, PwC Indonesia David Hill, Emeritus Professor of Southeast Asian Studies, Murdoch University Craig Keary, Former Managing Director, Asia Pacific, AMP Capital Ian Kemish AM, Strategic Adviser, Newcrest Mining Abid Khan, Deputy Vice Chancellor and Vice President (Global Engagement), Monash University Huong Le Thu, Senior Analyst, Australian Strategic Policy Institute Jieh-Yung Lo, Director, Centre for Asian-Australian Leadership, Australian National University Karen Loon, Former Partner and Asia Pacific Diversity Leader, PwC Singapore Andrew Macintosh, Partner, Control Risks Singapore Maria MacNamara, Former Chief Executive Officer, Advance.org Tuanh Nguyen, Director, Legal, PwC Australia Peter Osborne, Chairman Asia Pacific, Seed Health (Former Managing Director, Asia, Blackmores) Gordon Perchthold, Associate Professor of Strategic Management (Practice), Singapore Management University Lara Peake, General Counsel, Asia Pacific, Compass Group Raihan Pradhana, Associate, Economics and Policy Advisory, PwC Indonesia David Ray, Former Advisor, PwC Indonesia Chris Sargent, Former General Counsel, QBE Asia Pacific Eugene Sebastian, Executive Director, Australia-Indonesia Centre Zac Segal, Student Ambassador, The University of Sydney Business School John Shields, Professor and Academic Director International, The University of Sydney Business School Craig Usmar, Head of Business Relationships, Japan, AMP Capital Jessica Wong-Saunderson, Director, Tax, PwC Australia Jasminah Woodhouse, Advisor, Economics and Policy Advisory, PwC Indonesia

This report and other publications by the Taskforce can be found at: https://asiasociety.org/australia/asia-business-taskforce

A Second Chance | 34 ASIA TASKFORCE PUBLICATIONS July - December 2020

A SECOND CHANCE SPOTLIGHT, SECURE, MANAGING BRIBERY & Getting Asia right for SCALE-UP & STRATEGISE CORRUPTION Australia in a Reimagining Australia’s A framework for post COVID-19 world Asia Engagement Capability Australian businesses

A FORGOTTEN AUSTRALIAN UNIVERSITIES, INVESTING IN ADVANTAGE INTERNATIONAL STUDENTS AND CHINA INDONESIAN HEALTHCARE Enabling Australia’s Asian-Australian Taking Stock and Opportunities for and Diaspora Communities Taking the High Road Australian businesses

INSIGHTS, OUTREACH THE RIGHT PRODUCT, WHAT SUCCESSFUL AND BROKERING SOLD THE RIGHT WAY COMPANIES DO WELL Taking Australia’s healthcare Opportunities for Australian Case studies of Australian innovation advantage to Indonesia businesses in the Japanese Financial businesses in Asia Services industry

www.bca.com.au www.asiasociety.org/australia www.pwc.com.au/asia-practice www.sydney.edu.au/business

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