Austrade to focus on emerging markets, rationalise North American and European networks
Export advisors have backed reforms to the Australian Trade Commission that will see the agency shift resources from Australia, North America and Europe and focus on emerging markets, as the agency seeks to beef up its international market and focus on export-ready companies.
The changes, announced by Trade Minister Craig Emmerson yesterday, will see Austrade rationalise staff numbers in North America and Europe and beef up its presence in Latin America, Africa, Central Asia and western China. The agency opened an office in Mongolia in February.
But in a move that has worried some experts, Austrade will also reduce its focus on directly helping domestic SMEs who are looking to start exporting, and instead increase the amount of information provided through online resources and increase referrals to other government agencies and private bodies (such as Enterprise Connect and the Australian Institute of Export) that already provide exporting help to SMEs.
Australian Industry Group chief executive Heather Ridout said that while Austrade's decision to shift its focus to Asia makes sense, the changes to its operations in Australia will affect SMEs.
"The new focus by Austrade on assisting export-ready businesses will require an adjustment from business as usual. Smaller firms in particular which had previously used Austrade as a one-stop-shop will need to seek assistance from other government agencies and the private sector at the front end of their export planning.
"This will require efforts to improve co-ordination across all government programs designed to assist Australian firms, in particular SMEs, in their export activities."
But Austrade chief executive Peter Grey told SmartCompany that the agency has to ensure that its limited resources are spent where businesses need the most help, and duplicating services already provided by the public and private sectors does not make sense.
"What we are saying is that rather than repeating that work for the sake of being a one-stop shop, it needs to concentrate on the areas where we provide the most value.
"Do you want another two people in Australia or do you want an extra person on the front line in China?"
Grey says that the review of operations was mainly driven by a need to modernise the agency and refocus an agency that had become "thinly stretched and not particularly well focused".
"In many respects we're operating as if we were 20 years ago, before the rise of China and India and before the internet even."
"Where we add the most value is overseas – the people on the ground in local markets with good connections."
And the local markets where Australian exporters need the most help, Grey argues, are not in North America or Europe.
"We can be useful to an exporter in London, but we can be a lot more useful to an exporter in India or Western China."
Institute of Export chief Ian Murray and export adviser Warren Cross from Export Insights are supportive of the change in focus.
"If you've got a company who is doing well, then normally they are pretty capable of working out a strategy in established market. So to help companies in established markets, where there are no language barriers, good communications and technology, hasn't been the greatest use of resources," Cross says.
"It's a question of getting as much bang for your buck as you can, so from that point of view it makes a lot of sense."
The emerging markets that Austrade will push into – particularly Africa, China and Mongolia – are dominated by mining, but Grey says this will not mean that the agency is concentrating on helping big miners who arguably need very little assistance.
"The lead is taken by mining companies, but if you look at what happens after that consultants, small engineering firms go in to provide support. The big mining companies tend to look after themselves."
However, Warren Cross argues the Government is not doing enough to support emerging exporters, particularly through its flagship Export Market Development Grant program.
He claims Labor has "effectively run [the scheme] into the ground" by increasing access to the program and not increasing funding, and worries that these cuts will hurt SME exporters.
"They need to focus more of their energies on companies that can help themselves and that's where the Export Market Development Grant comes in."
Murray also says the agency will need to tread carefully to ensure it gets the balance right between working with established exporters and not ignoring new businesses, particularly in areas such as technology.
Austrade plans to develop an International Readiness Indicator tool that will allow would-be exports to assess the capabilities and provide Austrade with information about where these companies may require further assistance before they start exporting.
Ian Murray – whose organisation is likely to provide training and advisory services under this model – says this will reduce duplication across the public and private sectors.
"The expertise is there, and they will be able to point people in the right direction. There is no point in the Government spending money where other people are doing the same thing and possibly doing it better."
The changes, announced by Trade Minister Craig Emmerson yesterday, will see Austrade rationalise staff numbers in North America and Europe and beef up its presence in Latin America, Africa, Central Asia and western China. The agency opened an office in Mongolia in February.
But in a move that has worried some experts, Austrade will also reduce its focus on directly helping domestic SMEs who are looking to start exporting, and instead increase the amount of information provided through online resources and increase referrals to other government agencies and private bodies (such as Enterprise Connect and the Australian Institute of Export) that already provide exporting help to SMEs.
Australian Industry Group chief executive Heather Ridout said that while Austrade's decision to shift its focus to Asia makes sense, the changes to its operations in Australia will affect SMEs.
"The new focus by Austrade on assisting export-ready businesses will require an adjustment from business as usual. Smaller firms in particular which had previously used Austrade as a one-stop-shop will need to seek assistance from other government agencies and the private sector at the front end of their export planning.
"This will require efforts to improve co-ordination across all government programs designed to assist Australian firms, in particular SMEs, in their export activities."
But Austrade chief executive Peter Grey told SmartCompany that the agency has to ensure that its limited resources are spent where businesses need the most help, and duplicating services already provided by the public and private sectors does not make sense.
"What we are saying is that rather than repeating that work for the sake of being a one-stop shop, it needs to concentrate on the areas where we provide the most value.
"Do you want another two people in Australia or do you want an extra person on the front line in China?"
Grey says that the review of operations was mainly driven by a need to modernise the agency and refocus an agency that had become "thinly stretched and not particularly well focused".
"In many respects we're operating as if we were 20 years ago, before the rise of China and India and before the internet even."
"Where we add the most value is overseas – the people on the ground in local markets with good connections."
And the local markets where Australian exporters need the most help, Grey argues, are not in North America or Europe.
"We can be useful to an exporter in London, but we can be a lot more useful to an exporter in India or Western China."
Institute of Export chief Ian Murray and export adviser Warren Cross from Export Insights are supportive of the change in focus.
"If you've got a company who is doing well, then normally they are pretty capable of working out a strategy in established market. So to help companies in established markets, where there are no language barriers, good communications and technology, hasn't been the greatest use of resources," Cross says.
"It's a question of getting as much bang for your buck as you can, so from that point of view it makes a lot of sense."
The emerging markets that Austrade will push into – particularly Africa, China and Mongolia – are dominated by mining, but Grey says this will not mean that the agency is concentrating on helping big miners who arguably need very little assistance.
"The lead is taken by mining companies, but if you look at what happens after that consultants, small engineering firms go in to provide support. The big mining companies tend to look after themselves."
However, Warren Cross argues the Government is not doing enough to support emerging exporters, particularly through its flagship Export Market Development Grant program.
He claims Labor has "effectively run [the scheme] into the ground" by increasing access to the program and not increasing funding, and worries that these cuts will hurt SME exporters.
"They need to focus more of their energies on companies that can help themselves and that's where the Export Market Development Grant comes in."
Murray also says the agency will need to tread carefully to ensure it gets the balance right between working with established exporters and not ignoring new businesses, particularly in areas such as technology.
Austrade plans to develop an International Readiness Indicator tool that will allow would-be exports to assess the capabilities and provide Austrade with information about where these companies may require further assistance before they start exporting.
Ian Murray – whose organisation is likely to provide training and advisory services under this model – says this will reduce duplication across the public and private sectors.
"The expertise is there, and they will be able to point people in the right direction. There is no point in the Government spending money where other people are doing the same thing and possibly doing it better."
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