Michael Sainsbury
December 7, 2015

Hey PM, where’s the Asia plan?

Hey PM, where’s the Asia plan?

Shenzhen: the real tech powerhouse of China and a huge Australian opportunity missed in statement?

For the cool $1.1 billion promised by Team Turnbull for its rather breathlessly awaited Innovation Statement - after all it’s been front and centre of his economic utterances since the coup-de-grace –there was surprising little mention of the vast opportunities on Australia’s doorstep, in Asia.

This is even more surprising given Mr Turnbull’s relative China-savviness (and broader Asian experience) compared to all his predecessors since Gough Whitlam.

Despite the recent finalisation of the (overhyped) free trade agreement in the opening months of Mr Turnbull’s Prime Ministership, the Middle Kingdom received not one mention in the vast tracts of material issued as collateral with the Innovation Statement.

Or perhaps not, given Mr Turnbull’s recent comments to Chinese leader Xi Jinping that he could be risking conflict by his bellicose behaviour in the South China Sea.

These comments go against the widely-held perception that the PM and his foreign policy adviser (and possible new DFAT head) Frances Adamson are China doves, by folks in Australian diplomatic circles.

The centrepiece of the government’s new National Innovation & Science Agenda in relation to the rest of the world is a component called the “Global Innovation Strategy”.

Like the rest of the “Fact Sheets” that were provided, a good innovation for governments might be to move away from such documents, which have become largely full of government marketing jargon and comparatively free of facts.

There are a couple of stand-out examples of lack of detail.  Most notable is the absence of focus on the world’s largest market for everything – Asia. Here’s a Fun Fact: The middle class of North Asia alone is bigger than the entire population of the USA.

Another example is the ho-hum and vague talk of ‘Landing Pads’ for Australian technology businesses offshore.

It’s now clear that Mr Turnbull’s innovation boy-wonder Wyatt Roy, along with most of Australia’s ever-thinning press corps, has drunk the free Israel Kool-Aid on his multiple free trips to Tel Aviv and has spent next to no time in places like Shenzhen and Shanghai (China’s twin innovation powerhouses), or Singapore, Jakarta, Seoul, Tapei, Bangkok or Ho Chi Minh City.

One could go on.

The two ‘Landing Pads’ that were actually named – Silicon Valley (wow) and Tel Aviv (another wow) – were the ho-hum bits. The other three potential sites are still being evaluated, adding to that whiff of a last-minute cobbling together.

It’s disturbing that a government talking about acting quickly and being flexible – in dotcom speak this was often referred to as moving “at internet speed” – it couldn’t come up with three more destinations.

To this diarist, Singapore is a no-brainer, as InnovationAus.com has been chronicling since we launched.

It is the financial capital of Southeast Asia and its very wealthy government remains well ahead of its competitors in terms of providing funding and incentives, and its universities are the best in Southeast Asia – as well as being home to a number of excellent business schools.

The other is Shenzhen, being the real tech powerhouse of China and – despite Shanghai’s more obvious charms – is a place to do business and live. It is China’s Silicon Valley, and home to the country’s first truly global company in any sector, Huawei Technologies.

There is a healthy venture capital scene in Shenzhen and it is also home to the country’s startup listing board on its stock exchange. And it is only a short drive, train ride of ferry trip from China’s deal-making capital and only properly regulated (it’s all relative) share market in Hong Kong.

Home to a clutch of free trade zones, Shenzhen is like Silicon Valley in that it attracts entrepreneurs from all over the country due to its more market-oriented focus. It’s the only city in Guangdong where the lingua franca is Mandarin (Putonghua), rather than Cantonese – despite repeated efforts to gain the municipal status of Beijing.

And it seems that Germany will be the other landing-pad, a worthwhile addition as it is the country with a terrific track record at selling technology and innovation to China (and others in the region) without getting the push-back that US companies are now getting. A middle way to the Middle Kingdom, if you like.

But perhaps the most concerning news is that Austrade, Australia’s not particularly well regarded international trade bureaucracy (by business and diplomats alike) will be handed $11.2 million to create these landing pads.

“Through the Strategy, Austrade will receive $11.2 million in new funding to establish five Landing Pads and also develop a new annual in-bound innovation forum to foster collaboration and encourage international market experts, entrepreneurial talent and investors into Australia, Andrew ‘FTA’ Mr Robb announced in the hours after the Innovation Statement was released.

He then proceeded to say, as if he had just discovered how to split the atom, that a “focus on innovation will also be a key theme of Ministerial-led business missions”.

Well it’s about time and it has certainly been notably absent from Mr Robb’s past, bloated trade missions from which we rarely hear success stories. Perhaps there aren’t any?

The next Robb caravan was named as the forthcoming Australia-United States Business Week from 16-26 February 2016. Given that the USA is possibly the easiest place to do business on earth – especially for English speaking folks –  as well as being the technology world’s lowest hanging fruit, one wonders what on earth taxpayers are doing spending money in such junkets?

There are plenty of smart and worthwhile people in Austrade, but again, in this diarists experience watching it up close offshore for the past seven years, its good at glad-handing, but would not appear to have an innovative or technologically savvy bone in its body.

There’s a sniff of real world opportunities in Asia in the agricultural section of the Innovation package but again only really halfway there, talking about Asian demand for our food (not that they are allowed to buy big farms) but doesn’t follow through the line and talk about taking Australian agritech to the region. This is a sector that has real potential when linked up with the overdue boost for research.

The real challenge for those responsible for executing on this relatively vague ‘Asia-lite’ first pass at creating a national innovation strategy is to put a lot more meat on the bones.

And rather than talk endlessly about being better at global engagement - and then name Silicon Valley and Israel as the first points of contact - take a better look at our backyard that is seething with opportunity.

Still, on the evidence of this statement, it all looks a bit too hard.

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