• home
  •  

    Australia: Doubling SME Exporters

     

     
     
    © International Trade Centre, International Trade Forum - Issue 2/2002

    Australia is embarking on an ambitious plan to double the number of Australian exporters by 2006 and to increase community support for international trade by raising awareness of the benefits of trade and investment.

    Australia plans to double the number of Australian exporters by 2006 - a goal it believes is important for the country to remain competitive in the global marketplace.

    The Australian Trade Commission (Austrade), which helps Australian firms reduce the time, cost and risk involved in doing business overseas, is a leader in this effort. The national TPO has set new corporate strategic directions that will entail new tools, services and systems, and a realignment of existing programmes.

    Caveat on good news

    While Australia's economy is in good shape, it agrees with the theme of the Beijing Conference, that countries are operating in a turbulent new business environment.

    Australia shares ITC's view that successful TPOs will be those that view trade promotion in terms of export capacity development and not simply market development.

    Australian exporters are making rapid progress, with some surprising indivi-dual export success stories. For example, Australia sells pasta to Italy, sand and camels to the Middle East, and sake to Japan.

    Few "heavy lifters"

    While Australia's recent export performance has been outstanding, the nation's success has in fact been achieved by a small group of companies.

    Austrade research shows that only 25,000 Australian businesses export - just 4% of the firms in the country, a proportion slightly ahead of the United States, but below Canada, Spain and Norway.

    Clearly, in Australia's case, a rather modest number of high-achieving exporters are doing a lot of "heavy lifting" for the rest of the national economy.

    Potential exists

    The positive conclusions are that the potential of Australia's export sector is enormous, and that Australia stands to reap considerable gain if it can turn more companies into exporters, turn occasional exporters into regular exporters and support the growth of "born globals" - those companies that need to trade internationally to survive.

    Stagnation or only modest growth in the number of exporters has the potential of leading to lost opportunities to internationalize the Australian economy further and consequently increase national wealth and jobs. By doubling the number of exporters by 2006, the Australian Government would generate an estimated US$ 8 billion a year in extra trade revenue for Australia.

    Coordinated approach

    Although it has asked Austrade to be a leader in this effort, the Australian Government acknowledges that there must be a "whole-of-government" approach - a crucial point given that Australia is a federation of states and territories.

    The Government formalized its target of doubling exporter numbers in April 2002, when the Australian Commonwealth reached a historic agreement with state and territory governments. The agreement singles out five specific areas for enhanced cooperation to:

    • strengthen local communities' understanding of the benefits of trade;
    • increase the growth rate for new SME exporters;
    • focus on high-potential export growth sectors, such as knowledge-based industries;
    • promote equitable access to export facilitation services in regional Australia; and
    • improve coordination with providers of export services from the private sector.


    The Government is also enlisting the assistance of industry associations and the private sector to provide more support to companies which have the potential to export but have yet to do so.

    Training Austrade staff

    Against the backdrop of the new challenge to double the number of exporters, Austrade is continuing to develop its people and levels of service to assist its existing clients. One of the key lessons learned over the past few years is that no matter how good the tools are, trade facilitation requires judgement and well-trained "Austraders".

    The main vehicle for its people development initiatives is the recently established Austrade Institute - a virtual study campus and Australia's first corporate "university" operating in the government sector. The Austrade Institute provides education and training for every phase of an Austrader's career, from induction to highly specialized trade facilitation skills.

    Building public awareness

    Research by Austrade over the past few years has revealed that the level of community awareness and understanding in Australia about the benefits of trade could be improved.

    For instance, in 2001:

    • while 73% of Australians believe exports make a major economic contribution to Australia, only 34% believe exports make a major contribution to their personal standard of living;
    • about two-thirds of the population underestimate the number of jobs (one in five) generated by exporters; and
    • fewer than 15% feel well informed about trade issues.


    These findings question whether people, in light of such grass-roots attitudes, can be encouraged to start up export-based companies, pursue export-focused studies and careers, or encourage others in the community to expand their business overseas. Recent anti-globalization sentiment has exacerbated this situation. Such attitudes foster the view that countries are net losers from engagement in the global economy and that they should retreat to protectionist castles and pull up the drawbridge to the outside world.

    The Australian Government is keen to foster balanced public discussion about globalization and trade policy. But it also believes there is a need to conduct debate on a firm foundation of facts, not perceptions.

    Austrade and its partner, the Department of Foreign Affairs and Trade, last year started a comprehensive public awareness programme to address the apparent blind spot concerning the value of trade.

    "Exporting for the Future"

    The "Exporting for the Future" campaign puts before the Australian people the facts about how trade and investment make a difference to their personal standard of living. The key points are simple and compelling:

    • Exports account for about 20% of Australia's gross domestic product (GDP).
    • One in every five Australian jobs depends on exports.
    • One in every four jobs in rural and regional Australia relies on exports.
    • Exporters generally pay their staff more, provide better training and healthier workplaces than non-exporters.
    • Ninety-six cents of every dollar of output from foreign direct investment stays in Australia.
    • Exposure to global competition spurs innovation, productivity, adaptability and many other important traits.


    The "Exporting for the Future" programme includes teaching materials for secondary school students; brochures summarizing trade benefits; and radio advertisements publicizing trade-related events and local export success stories.

    The programme also includes presentations targeted to the non-exporter community at public events, involving chambers of commerce, business councils and industry associations; schools and universities; and agricultural shows and field days.

    Promoting investment

    Austrade wants to foster not only exports, but also inward and outward investment.

    Among Australian firms, foreign direct investment is an increasingly popular method of entering foreign markets. The Australian Government is implementing a number of measures to improve performance in this area, and Austrade, like many other TPOs, will be doing more work on investment over the coming few years.




    Austrade

    • Mandate: Contribute to community wealth by helping more Australians succeed in export and international business.
    • Institutional positioning: Statutory authority within the Foreign Affairs and Trade portfolio; reports to the Minister for Trade.
    • Founded: 1986.
    • Location: Sydney; with representatives in 109 locations in Australia and in 60 countries overseas.
    • Funding: National budget and charges for services.
    • Staff: approximately 1,000.
    • Of interest: Works in partnership with Commonwealth and State government departments and private sector service providers to improve access to export assistance services for SMEs in regional and rural Australia through a network of 34 TradeStart offices.


    Contact:
    Austrade Head Office,
    Level 24 Aon Tower, 201 Kent Street, Sydney 2000, Australia
    Tel.: +61 2 9390 2000
    Fax: +61 2 93902024
    E-mail: info@austrade.gov.au
    Web site: http://www.austrade.gov.au

    Peter O'Byrne is Managing Director of the Australian Trade Commission. He can be reached at managing.director@austrade.gov.au.


search
UNCTAD WTO