The key message of these reports was that as the Australian economy had opened up to trade and investment, more and more small and medium sized enterprises (SMEs) were getting a slice of the action in new industries and in emerging markets around the world. The research showed how Austrade could tap into this new talent pool of new generation exporters whilst still maintaining our ties with the usual suspects at the top end of town.
And tap into it we did, working with more new exporters than ever before, and helping more exporters to become sustainable with international business at the core of their operations. We have also seen more companies move beyond traditional exporting and importing into new areas like franchising and licensing, joint ventures and strategic alliances and linking into global supply chains. As a result, a fledging surf wear company like Billabong, who a decade or so ago was a small player expanding just beyond its Australia’s surfing communities, now earns more overseas-based revenue than Westpac, who has been an established financial institution in Australia for over a century and a half.
As a result of this emphasis on SMEs, a new generation of Australian exporters are now on the scene. However, in the new round of Journey to Export and International Business research (‘the new testament’ if you like) a new dimension has been added. The new research shows that whilst size does matter but so does time. That is, the experience of the exporting company in their global ‘journey’ is as important as the size of the firm. In addition, how effectively Austrade helps these companies will depend on where in the life cycle we can touch them.
The Journey to Export and International Business research team has put together 3 segments based on the business lifecycle of the exporter.
The first is the New to Export segment. These are ‘the Rookies’ of the export game just as we have rookies or first year players in sport. They just need to get a start in their global business life. They are looking to Austrade to provide overseas opportunities and leads, to get market advice, and to get some first customers on their books. They need a client manager at Austrade, they need mentors and business advisors from the senior players, and most of all “show me the money” – they need access to capital.
One of Austrade’s key functions is to nurture their rookie list and to build the next generation. A good footy club always nurtures its young talent to ensure there are skilled players coming through and in many ways Austrade is no different. Just hanging around ‘the hall of famers’ and the experienced players will mean that we will lose touch with future ranks of export talent coming through.
The second is the Expanding Export segment. This group is known as the ‘Rising stars’. They are no longer rookies having found their sea legs, but are needed to grow and nurture their identified strengths and weaknesses. In sporting terms – whether it be football, cricket or netball – this cohort is known as the emerging leadership group and can make or break a team’s success. In export terms, they need access to growth capital, help in identifying new markets to expand to, advice on market entry and planning, and access to key customers (to supplement the ones they already picked up as rookies). They need access to key decision makers fast and can not waste time – or their recognised talent – on dud leads. A group like Billabong or Cochlear was probably in this category 10 years ago, but with some clever strategy and advice the rest is history.
The third is Exporting and Beyond segment. They are truly ‘Veterans’ or ‘Seasoned Players’. They have made it, they have the score on the board but want to widen and deepen the global penetration of their business. They have moved beyond traditional exporting and importing, and want to learn new techniques to establish a permanent in-market presence off shore. As a result the Seasoned players need a sophisticated service offering of access to in-market service providers, high market intelligence and business leads, help with identifying strategic partners, advice on brand positioning, market dynamics and key customers.
The Seasoned players can’t afford to muck around and they need access to high level decision makers in politics, business and government. This is where the ‘government badge’ of Austrade really can make a difference especially in countries that have strong government involvement in commercial life. For instance, if a major engineering consultancy is bidding on a major project in Western China, the influence that the Senior Trade Commissioner has back in Beijing can really matter. In developed countries too, a lot of business is defence, education, health and infrastructure, is government to government and Austrade has a major role to play. The Seasoned player knows that it is important to have access to people in high places and they expect the Austrade network to develop that sort of high level access that could not get operating on their own steam.
In many ways, there is a fourth segment – or at least an extension of the third - the truly international global business. These are in many ways in the ‘Hall of Fame’ of Australian global business players. The top 100 Australian global businesses featured in a special issue of The Diplomat earlier this year. Many of the names would be familiar to you all – BHP Billiton, Rio Tinto, Woodside, Macquarie Bank and the like - but also some unexpected mentions like the aforementioned Billabong, and companies who are very familiar to Austrade like Cochlear, Mincom and Servcorp. Many of these success stories also use the services of the Austrade network which will be helpful to SMEs wanting to access the global networks of their bigger corporate brothers and sisters. Not every rookie or rising star will make the final segment – nor would they want to – but having access to the Hall of Fame is important.
In ten years time, no doubt, some of the minnows in the first and second segments will be major players on the international business stage – just as companies like Billabong have over the past decade or so. But either way, Australia will have a new generation of exporters coming through to ensure that there’s plenty of dynamism, innovation and growth in our globally-focussed economy.
This was written by Tim Harcourt, the chief economist at Austrade.
