AFG Venture Group Dispatches

Corporate advisory and consultancy in Australia, South East Asia and India.

WE CAN DO BETTER. COMMERCIAL ACCESS TO ASIA

August 29th, 2018

Glen Robinson B.Sc. [Tech] JP

Glen is a co-founder of Asean Focus Group [now AFG Venture Group], with Peter Church, which we formed in 1990 to provide advice and assistance to those organisations which wished to take a commercial presence in Asean.  We have been incredibly successful in actually being effective rather than accumulating publicity, and have a very presentable client list.  Additionally, we have worked with the Indonesian BKPM, Thai BOI, Malaysian MIDA and Myanmar MIC, and other investment agencies in relation to their inward investment policies and strategies. Throughout this process we have developed a deep network of colleagues in the region in both government and the private sectors.  We have restructured over recent years to form AFG Venture Group for a number of practical reasons.

 We have been heavily involved in the bi-lateral Councils of Indonesia, Thailand, Malaysia, Vietnam, Myanmar, Philippines, Timor Leste, India and have attended many of the Update Conferences which ANU conducted over the years, and have been impressed by the high quality of the academic understanding of many of the students

INTRODUCTION

This presentation is a follow up to the question “Can We Do Better? Australia’s Commercial Relationship with Asia” which explores and explodes the reasons which are often proposed for our reluctance to commercially engage with Asia.

This paper purports to look at the various resources we have in order to provide further information on the countries in the region, and support which can be provided to those organisations which are considering a commercial engagement

RESOURCES AVAILABLE FOR REGIONAL INFORMATION

Universities

Interestingly, within the community there is incredible knowledge and understanding, and this is no better exemplified than the work which the universities are undertaking. The Update Conferences conducted by ANU are a wonderful revelation of the work being carried out principally by research students undertaking quite deep, detailed work within the communities of the Asian region. The unfortunate fact is that the considerable knowledge and understanding is being generated by bright and committed youth of Australia, but the information and insights are not necessarily promulgated to the commercial sector, the economic commentators, nor the regulatory authorities as none of these sectors appear to attend the presentations.

Small Business People

Also there is a wealth of on-the-ground experience which has been gained by selected people in the commercial sector. While there is only a small number of the larger public companies in the region, there are many thousands of smaller Australian owned companies and smaller companies owned and operated by expatriate Australians. As an example there are 170 Australian public companies in Thailand [1], but anecdotally there are 1250 smaller companies which are owned and/or operated by expatriate Australians. A similar picture exists for other economies in the region. Additionally, the Business Councils or Chambers of Commerce are usually conducted by business people who are very conversant with the commercial realities and do their best to communicate that information to their members

Private Researchers

There are a significant number of economists, commentators, private researchers, and smaller advisory consultants in the region who are really immersed in the day to day culture and have a good understanding of the market in so far as the local consumers are concerned. This group can have a wealth of knowledge about the local consumption and tastes.   They may be relatively quiet, and many keep out of the mainstream and sometimes they are not easy to identify.

Regional Trade Offices

Another group with considerable expertise and which is often overlooked is of the representatives of the trade and investment sections of the regional countries. Almost every developing country has a representative office [3] and are seen as BOI, BKPM, MIDA, VTO and many more.

State Governments

The state governments in Australia are a source of advice and assistance for matters Asian. They have tended to be low profile but are a reliable source. In addition, many of the states have an export orientated facility which frequently supports and assists Austrade.

 Austrade

Probably the most relevant and talented group is Austrade. Australia’s trade and export promotional government department, with its offices in most of the major developed and developing countries globally, it is an invaluable source of information.

HOW TO USE THESE GROUPS?

With that significant cohort of disparate groups, each of which has a varying level of understanding or empathy within the region, it is difficult to understand our lack of commercial enmeshment, given that in each of the developing countries there is an almost indecent rush by other countries to invest in the region [2]. In several of the countries, there is the saying “it is too early to invest now, and in 12 months’ time it will be too late” such is the speed and scope of the inward investment.

 It may be that the various groups are not effectively communicating with each other and with the general community, and as a consequence, a lack of information or more likely misinformation, is the norm.

It becomes obvious that a major effort is needed to

  • Develop a means to project reliable information to the general business community
  • Ensure that the positive message about off-shore commercial activities is generated
  • Develop a cross fertilisation of information across groups
  • Ensure that correct and reliable information is disseminated
  • Make greater use of the university resources in 2-way information dissemination
  • Target the mid-small companies to export and invest in the off-shore markets

A project such as this is not a single project, it is an ongoing change of mindset, and as such will probably consist of a range of activities.

It is convenient and somewhat coincidental that the White Paper on Australia’s Foreign Policy will [or perhaps should] generate activity some of which will relate to commercial contact with the Asian region, and may well overlap the activities foreshadowed in these notes.

There are other groups undertaking exploratory training or introductory sessions and the most visible of these is Asialink, but it also includes the Business Councils, Chambers of Commerce, and several of the government agencies. These groups play an important part in dissemination of information, but it is clearly not sufficient to overcome the reluctance to engage commercially, and hence the requirement for the provision of additional focussed and targeted projects.

It is logical that Austrade should be the architect and project manager, but because what is being proposed is so divergent from current government policy, it is difficult to see it occurring in the short term as it would probably require a change in government policy, something which will not happen quickly, but that should not be a deterrent to attempt it.

Therefore, the specific activities to be undertaken are discussed in the following paragraphs

SPECIFIC ACTIVITIES

Update Forum.

The Update Forums presently conducted by ANU could be restructured to attract a broader audience. Perhaps with the first day for research specific presentation and the second day presentations still with an academic bent but with a more commercial angle to draw attention to the implications and the opportunities

Additional Update-like forums could be taken to the commercial centres, away from Canberra, targeted to the SME, possibly using the Chambers of Commerce and Business Councils to assist in accessing the business community. It may be advantageous to conduct these as a series with a slightly different theme, e.g. Asean, northern Asia [China, Japan, Korea], Southern [India, Pakistan, Bangladesh].

At the forum, presenters would include both academics, commentators and business people. Care must be taken to ensure corporate and commentators know their business from practical experience, and the academic speakers subject should have a practical aspect if at all possible. These would be at least 1 full day, but also could run over 2 days, and incorporate a formal dinner with a knowledgeable speaker.

Exploratory Seminars.

A series of seminars of probably 2-3 hours’ duration, providing high-level introductory information on a specific topic such as specific technology or country target. Once again these could be conducted in conjunction with a university, but the content would be of a much more basic level. These have been extremely useful and popular in the past.

Regional Seminars.

A series of regional specific topic. Very similar to the exploratory seminars, however they are to be conducted in regional centres. Once again, the content would be of a much more basic level.

SME Seminars.

The SME seminars are the same as the Exploratory and Regional seminars but are pitched to the SMEs, which probably require a slightly different theme. A subject which would be of interest is the government support and assistance which can be provided from home base.

Business Missions

Business missions are a useful means of introducing a potential investor or exporter to a specific market. They are time consuming to arrange, and are really for the business person who has almost made the decision to enter that market, not really for the “tyre kicker”. Although they may be seen as a prelude to an investment decision

Seminars for the Journalists.

Very difficult to arrange, but if persisted may begin to get through to them, as they could be a very useful means of gaining favourable and/or positive material published. The Thai BOI conducted a seminar in Bangkok to launch their new investment policy [2017] and over 70 foreign journalists participated, 4 of which came from Australia.

Sell the Message

One of the peripheral but important aspects is to promulgate the message that off-shore investment is to the advantage of the individual company as well as to the economy of Australia. The current perception is that it is detrimental to Australia’s interests, and that is why it is important to enlist the skills and reporting ability of the journalists to get this message out. Other media should be used for the same purpose

NEXT STEPS

It is clear that a lead must be taken by a senior group which has credibility, geographic coverage and resources. The organisers should be Austrade, and in conjunction with AFG, and it would be incumbent on those organisers to enlist the aid and support of the other organisations.

We should recognise it would be a longer term process, AFG could begin the process through discussions and presentations to the various parties which are targeted to become contributors.

Further comments and discussions with: –

Glen Robinson, AFG Venture Group,

EMail; glen.robinson@afgventuregroup.com

Tel: +61 412 229 664

26 July 2018