Home | site-map | indonesia | indonesian-single-source-articles | asteroid-user-registration |
Roy Morgan OZ Panel Login | Mail Diary Panel Login | careers | contact-us |
|
||||
 |
 |
 |
|
  |
|
|
||||
           
|
||||
| NEWS : Papers : | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australia, the FTA and the Global Marketplace
What does all this mean for Australia?
These questions are part of my life for two reasons: Roy Morgan Research is expanding overseas; and our business is helping our clients make sense of their markets and identify opportunities. Let’s start with the stats. More Americans watch Australian Rules Football than do Australians.1 Over 8 million Americans (8,410,000) watch Australian Rules Football at least occasionally on television. This means Australian Rules Football is viewed by more Americans than Australians (6,701,000). More Democrats than Republicans watch Australian Rules, and yes, they are more likely to drink Foster’s. Some things are the same the world over — the trick is to know which ones. But seriously, why is Bill Gates one of the wealthiest and arguably the most powerful man in the world when Professor Carl Wood and Professor Alan Trounson, who created life (In Vitro Fertilisation), are for the most part unknown Australian scientists; and Fred Hollows, who restored sight to so many, a hero only in relatively narrow circles? The answer has nothing to do with the often quoted Australian excuse of the tyranny of distance, or with excessive minimum wages in this country, or with taxation, immigration, or any of the other usually cited excuses. The answer has more to do with Australia’s poor performance in marketing and commercialisation, which we believe is rooted partly in a lack of vision, and partly a lack of confidence to have a vision, articulate it, and then single-mindedly focus on achieving it. We can and should have vision in this country. This was once the richest country on earth; while it is acknowledged that it is still a wonderful place to live, we’ve been slipping down the comparative earnings and standard of living tables for decades. Our productivity in many areas is about half that of the USA, and our unemployment remains too high. Regardless of what our government statistics tell us, real unemployment is over 8%2. In both the USA and Australia 58% of the population aged 14 and over are employed. But more telling are the full-time employment rates, which are 42% in the USA and only 39% in Australia. We are under-funded for our ageing population’s retirement - and we are seeing beggars on our streets. Some argue that this situation has arisen ultimately because of increasing competition from developing economies. But this argument is not as persuasive as it initially appears. It is ultimately made on a zero-sum premise - that if country X increases its production of whatever, then country Y’s production must decrease. If we think about it, however, it becomes blindingly obvious that there are billions of people in this world who want more consumer goods, more travel, more education - more everything. The Free Trade Agreement gives Australia access to one big part of that market. In 1998 at The Melbourne Convention — Federation: Into The Future, Professor Les Holmes3 challenged Australia to have vision. He asked:
The real and only question is when? When will Australia take advantage of our innovation potential? With the FTA in sight, the time is right now. Not only are there more Americans than Australians watching Aussie Rules — there are more Americans than Australians doing, eating, drinking, buying and wanting almost everything. It is simply a very big market. Australia has always been dependent on many factors, such as:
Ever-improving technology and communication is increasing Australia’s efficiency in most industries. For instance, in mining and exploration new methods of surveying including satellite aerial photography, more sophisticated computer modelling of ore bodies, larger more cost-effective plants, new methods of extracting gold eg bugs etc. In primary production we have genetic engineering, sophisticated land management and farming techniques, and we are arguably world leaders in wine making technology, to the bewilderment of France and Germany. This kind of change, continuous improvement, has itself become almost a constant. Australia is a leader in many of these areas. However, it is in the area of the market — supply, demand, distribution and services — that everything is changing, that there are opportunities and threats in abundance. Over the last decade, demand for our minerals and primary produce, eg gold, copper, coal and meat etc, has consistently outstripped supply, and consequently, mining companies and primary producers have sensibly focussed their attention on production efficiencies, and in some instances, on quality. What about consumer markets? At the same time that the FTA opens up a large market, the market itself is getting tougher to penetrate; consumers everywhere are becoming more isolated, regionalised, more fragmented, more individualistic, more demanding, more informed, more stressed, more discriminating. In a nutshell, harder to get. Companies offering clever solutions will succeed. This is where Australia comes in. We are really good in this country at “clever solutions”. But we must never benchmark against World’s Best Practice — we must start by aiming to go beyond World’s Best Practice. We have a unique advantage in Australia; having never been as ideologically focused as the USA or Europe, our minds are less conditioned to think within certain channels.
The global market is a very parochial place. There are pitfalls for the unwary, and opportunities for those in the know, but three things are crucial for any successful market development process:
Of particular relevance here is the insight of Andrew Grove, President and CEO of Intel, in his book “Only the Paranoid Survive”4. He says “There are moments in any business when massive change occurs, when all the rules of business shift fast, furiously and forever”. He calls such moments “strategic inflection points”. Such a strategic inflection point he warned could be set off by almost anything:
In 1996 when Grove wrote of these things it was clear that we in Australia had all those and more. Since then, in the space of eight years we have experienced even more change than ever before. The rise and fall of the dot.com is part of our living memory and experience, the War in Iraq and Afghanistan, terrorism and security fears, and corporate collapses have all taken their toll on each nation’s psyche. Many industries and countries have seen their fundamental way of operating, and their reason for being in business, called into question — and against this backdrop the FTA. Today, more than ever before Australia must create and develop its own market. We can no longer rely on overseas customers, or intermediaries to create and drive demand for our products and services. They have their own priorities and problems. And I would argue they are no better placed than we are to deal with uncertain and tough times. In fact, I would argue the words “If I can make it there I’ll make it anywhere” from the song New York New York, would be more appropriately sung about Australia. The world, or at least the developed world, has entered a new era. This new era is one which will be defined by globalisation, technology and communication, elimination of traditional boundaries, and a strategic focus on the global market place. Grove pointed out that, managed wrongly, a strategic inflection point can mean the end of the game. Managed right, it can turn into a powerful force. Clearly, those of us who are still here all want to manage it right. If we agree that Australia must develop its own market, then the question is where to begin, and then what is the appropriate role for the Government. In reality there are many places to begin. Yes, Australia does have more to offer than football, Foster’s, booze buses and compulsory seat belts. The following are just three examples, there are many more. Marketing gold -to increase the value of the Gold Industry to Australia One ring sells at $25; and another ring with a similar level of design but in gold sells at $1,550. There is clearly a large increase in price due to the ring being “gold”, but the actual value of the gold (in terms of dollars to the gold industry) is a minor part of the increase in price. If the gold industry in Australia is to flourish within this changing world it will need to take charge of its distribution channels and increase the share of the total value of the gold jewellery market that goes to the Australian gold producers. The opportunity exists today to do just that by marketing and selling gold jewellery over the Internet. - BUT only if Australia does it first i.e. takes the lead and takes ownership of the market. Australia, as a large gold producer, has much to gain by getting it right, and much to lose by getting it wrong. Information Australia is blessed with good information. We have the world’s best single source database — for understanding customers, marketing, advertising, and media buying — Roy Morgan Single Source. We have shown that we know more about some areas of the USA than those spending US dollars in their own country. Today when it costs less to telephone interview throughout the United States from Melbourne, Australia (even with the high dollar) than it does from a central point within the US, the opportunity exists to make Australia the global hub of marketing intelligence. We are way out front in the thinking, design and implementation of this concept of global market intelligence today. The real challenge is to find a way to keep the intellectual property, the value, and the jobs in Australia. Education - our children, our future, and a valuable industry for Australia We all value education (yet it is still seen as a cost). The opportunity exists to make education Australia’s business - and a very powerful, and lucrative business it will be. As we move forward it is difficult to avoid wondering where our future lies, and what kind of world our children will inherit. In increasingly complex times as these the collective cognitive power of a nation’s people will have a great deal to do with determining its success. This means there will be a vibrant market for whoever corners the market. One initiative comes to mind here for Australia: Distance learning — There is no question that Australia has the intellectual capacity to develop an excellent system of education — one which would facilitate everyone being able to reach their potential. It is just the economics of such a venture that beats us. However, if we consider our market for such an endeavour to be worldwide, then the economics of the business become extremely attractive. Global communications means that if we get the product right and we commercialise it intelligently there is indeed a world market. These ideas all have one thing in common — they are all about new ways of thinking. Perhaps the tyranny of distance has advantaged us in allowing us to think outside the square — let’s now think outside the island. As Charles Handy says in his book5 — The New Alchemists — about how visionary people make something out of nothing.
The challenge for each of us who seek to lead is to find the facts and look for the alchemy, think like an alchemist. The challenge for Government, in its widest sense, is to create an environment in which these kinds of Australian creations can be brought to fruition. 1 Roy Morgan Single Source USA 2 Roy Morgan Unemployment Estimate December 2003 Quarter. 3 Professor Leslie Holmes, University of Melbourne, paper “Australia, Globalisation and The Third Way”, presented at The Melbourne Convention — Federation: into the Future, March 3, 1998. 4 A Grove “Only the Paranoid Survive” 1996, Currency, a division of Bantam Doubleday Dell Publishing Group, Inc. 5 Charles Handy and Elizabeth Handy, 2000, “The New Alchemists” Hutchinson Publishing Finding No. 20040401 is taken from Computer Report No. 1 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
© 2007 Roy Morgan Research. All Rights Reserved |
