Australian companies are perfectly positioned to capitalize on Southeast Asia's strong economic growth.
The Sydney I encountered when I arrived in Australia in 1981 had the air of a large provincial town about it. The shops seemed to be closed more often than they were open, and on weekends the city centre had the desolate feel of a ghost town.
Today I believe I reside in one of the great cities of the world. In the intervening years Sydney has done well to look out on the world and to embrace its opportunities. My view is that this is what the local ICT industry must do in the years ahead.
I mention this because the topic of offshoring continues to stir debate. Despite the evidence that offshoring has had little influence on the Australian ICT market, there are strong concerns that, unless arrested, it will eventually overwhelm the local industry. Perhaps there is another side to this coin; is it not possible that Australia is ideally placed to provide ICT services to the burgeoning economies of Southeast Asia?
A recent article by Ross Gittins in the Sydney Morning Herald offers some insight into the economic promise presented by Asia. According to Gittins, Asian economies accounted for more than 30 percent of world growth in the last 25 years. IDC's research highlights some of the ICT opportunity behind this. This year IDC forecasts that the Chinese, Indian and Malaysian markets will increase by 18 percent, 16 percent and 9 percent respectively. Even a relatively mature ICT market like South Korea is expected to grow by 7 percent in 2005. In contrast the outlook for Australia is 2 percent.
Yet I believe Australia is ideally placed to harness these opportunities in Asia. Above all, Australia is the logical base for any global organization wanting to set up a regional headquarters in Asia Pacific. The country possesses a well-educated workforce, a stable and robust political system, a mature and well-regulated investment market and a quality of life that ranks among the best in the world. These are all significant assets that differentiate Australia from rival regional locations. In ACT terms, Australia is a sophisticated user with a wealth of knowledge to draw upon.
However, Australia's real standout advantage is its escalating level of interaction with Asia - a trait which distinguishes us from many other Western countries. Gittins mentions that a quarter of our spending on overseas travel goes to Asia. Furthermore, more than 200,000 Asian students are enrolled in Australian schools and universities. These experiences help to forge cultural bonds that enhance trading relationships between countries in the region.
For my own part I can see this reflected in my working environment. IDC's Sydney office has 40 staff, but these comprise at least 14 different nationalities. The national office of the Australian Computer Society paints a similarly diverse picture. This interaction fuses an appreciation of cultural differences that helps build trust and empathy in working relationships. Australians see Asia as part of their community rather than some faraway, exotic place.
With their large populations and increasing prosperity, it is highly likely that in the next couple of decades India and China alone will have middle class consumer markets that outpace North America and Western Europe combined. The sales opportunities will be enormous, and the firms generating this business clearly will be in need of ICT functionality. Why can't Australians provide it? In the offshoring debate I agree with the saying: "If the world is our oyster then the Asia Pacific is Australia's pearl".
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