Sunday, December 20, 2015

Australia must make better use of our Asian connections if we want to prosper


The National Innovation and Science Agenda was recently announced to great fanfare. There will doubtless be ongoing forensic analysis of the proposals and, later, ruthless in-depth political scrutiny and argument about the outcomes. With relatively minor exceptions, at this stage, the proposals seem realistic and well aligned, although, of course, interested parties are already saying they should have been allocated more funding.

Having said that, the implicit conceptualisation of innovation in the announcement has quite a narrow focus around digital technology and science-based research, and there is a lack of clarity with respect to the more practical aspects of commercialisation, marketing, distribution and sales. It is possible the glare and glitz associated with buzz words such as landing pads, incubators, start-ups, eco-systems, coding, cyber security, and Silicon Valley, not to mention the instantaneous global "vibe" of this whole area, has at least temporarily blinded the leaders of the innovation blitz to very local opportunities. Although not nearly as exciting, there might be less need to travel to Los Angeles or Tel Aviv than at first appears to be the case, especially where solutions in the commercialisation arena are sought.

Before further developing this theme, it is useful to briefly consider the fundamental drivers of the current situation. Clearly, the aim of the Turnbull administration is to translate the Australian economy into one that increasingly creates and exports innovative goods and services, because courtesy of declining commodity prices, the previously successful model of exporting bulk quantities of natural resources is beginning to creak at the seams. A cultural transformation has been called for, where private enterprise becomes enthusiastic about funding research and development initiated by scientists, engineers and technologists based in universities and public institutions, as well as independent ICT start-ups, and where innovators and researchers discover a new facility and enthusiasm for collaboration with the wider business and investment communities.

Unfortunately, there is an underlying antipathy that characterises relationships between government, academia and various levels of the private enterprise sector in Australia. This, arguably, has its origins in and around colonial and post-colonial-era philosophical and class differences between workers, university academics, and business, farming, government and political elites, even if all of this tension is well camouflaged by egalitarian mythology, rhetoric and contemporary techno-babble. In fact, these underlying cultural conditions, no matter how undesirable and unpalatable, have been hundreds of years in the making and are deeply ingrained in the Australian institutional psyche. This is unlikely to change much as a result of alterations to government allocation of research funding, other financial or taxation incentives or official encouragements. Although by no means impossible, real collaboration between universities, government agencies and the private sector in Australia will always have its special difficulties.

Cultural and historical legacies are also likely to be at least partly responsible for academic, business, government and political elites who talk up Australian business and innovation opportunities in Asia and then – high-level ministerial or whirlwind trade missions excepted – board flights for the US, Britain, Europe or Israel, or indeed anywhere but Asia. Providing striking evidence of this well-established and unfortunate tendency, the 2014 PricewaterhouseCoopers report Leaving Us Behind noted that Australian firms have invested more in tiny New Zealand than in all of the ASEAN nations combined.

In this context, it is disappointing, if not especially surprising, that no direct linkages have been made between the innovation push and Chinese, Indian, Indonesian, Japanese, Korean, Vietnamese and other significant Asian cultural sub-groups within Australian multicultural society. In fact, there is great opportunity here, because these sub-groups are naturally networked right across Asia and leveraging their wealth, their connections and business acumen in the context of research and innovation directions, commercialisation, distribution, marketing and sales of new goods and services is an obvious strategy, especially given that it is in these general areas that Australian innovation initiatives have so often been found wanting.

Illustrating the scale of this potential, there are about 40 million overseas Chinese (people of Chinese birth or descent but resident in other countries) scattered across many different nations around the globe (New World Encyclopedia). In our region, the overseas Chinese have been tagged the "Jews of Asia" because, despite their immigrant origins, they dominate  south-east Asia's economies, business sectors and stock markets. Overseas Chinese, not only from  south-east Asia but from around the world, have invested and continue to invest many billions of dollars directly into China, often into their ancestral regions, cities and towns, where they have deep linguistic, cultural, clan and familial connections. 

According to 2011 Australian Bureau of Statistics census data, Australia hosts about 866,000 people of Chinese descent and this number will be considerably larger when the results of the 2016 census are known. The potential for building connections and business investment, and marketing, distribution and sales of Australian innovative goods and services into expanding Asian and Chinese markets is obvious.

With the objective of identifying and accessing business opportunities in the world's fastest-growing economies, Australian universities, other relevant public institutions and private-sector innovation and research hubs should conscientiously explore and promote links with significant Asian-Australian ethnic communities, especially Chinese communities. The universities, in particular, have the public profile and resources to successfully undertake this task on behalf of the nation. More generally, innovators and researchers need to step outside a mindset defined by the idea of selling goods and services to Asia, towards a mindset that acknowledges the value of reaching out to Asian ethnic communities and leveraging their cultural and linguistic heritage, market knowledge, networks and business expertise, thereby maximising the commercial development and export potential of Australian innovation.

Dr Richard Grainger is a former head of Curtin University School of Management. His academic training was in Asian studies, marketing and international management and he has travelled, lived and worked throughout Asia.

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