One of Asia’s largest banks, HSBC, is the latest group to have belled the cat on the often sleepy Australian business community’s appreciation of the vast opportunities in Southeast Asia.
The key message of the report – jointly authored by the bank and the Australian Export Council – was that while some Australian businesses have enjoyed a competitive advantage over rivals by harnessing opportunities offered by the Association of South East Asian Nations (ASEAN), more can be done to deepen trade links to leverage Australia’s position in the region.
“Following decades of consistent economic growth and increased connectivity across the region, the ASEAN market is on course to become the world’s fourth largest economy by 2050,” HSBC Australia chief executive Tony Cripps noted.
“Supported by new trade agreements and initiatives such as China’s Belt and Road Initiative, ASEAN will continue to carve its powerful economic identity alongside neighboring China and India.”
And perhaps no industry has more to gain in ASEAN than the technology and innovation sectors.
ASEAN, with a collective GDP of US$2.5 trillion, a population exceeding 600 million, and a strategic location at the crossroads of Australia, China and India, is a US$100 billion trading market for Australia, the report said.
And it’s also worth noting, once more, that if free trade agreements are indeed the great panacea that the Turnbull Government believes them to be (of course, they are not) then Australia has long standing FTA’s with Singapore, Thailand and Malaysia – and is working towards a deal with Indonesia, the regions largest economy and country with the biggest population.
But hidden away is the Australia-New Zealand-ASEAN FTA.
This agreement offers rules of origin to assist Australian companies in tapping regional supply chains, as well as legal protection for Australian investments in the region, the report noted.
“Despite its benefits, AANZFTA is the second-least understood trade agreement by Australian businesses, according to Australia’s International Business Survey (AIBS) results.
And, on average, across all sectors, 50 per cent of Australian businesses responding to AIBS did not understand how – or even if – AANZFTA applies to their business.
HSBC’s wake up call – and how many does Australia need – is underscored by continuing action the region, largely driven by government’s whose commitment to technology and innovation leave Australia’s in the dust.
There is real understanding everywhere in Southeast Asia – and indeed across the whole Asia Pacific region – of both the benefits technology can bring to developing nations, and how a successful technology sector can be real competitive advantage.
In the relatively fat, lazy and rich Australia, the expediency just does not seem to be there, despite the Prime Minister’s admirable efforts in at least elevating the public conversation.
The latest in a long list of examples was last week’s launch of StartUp Thailand and Digital Thailand 2016 by the Prime Minister General Prayuth Chan-ocha, a bloke who does appear to be to overly tech savvy.
Say what you like about a military junta, but the military is always ahead of the technology curve and understands the advantages that better tech can give a country.
The launch was on the island of Phuket, ironically enough one of Australia’s favorite holiday – and more recently retirement – destination.
The government said it had seen Phuket’s potential for development as a Smart City – although in reality it is a string of towns.
The island province has been chosen as a digital super-cluster for economic development, along with Chiang Mai, according to permanent-secretary of the new Ministry of Digital Economy and Society, Songporn Komolsuradej.
Plans are to develop IT infrastructure and networks in Phuket including building a network of high-speed broadband internet and increasing the free Wi-Fi hots spots available 1,000, , Ms Songporn added.
Still, right now Thailand startup sector is small.
Last year’s investment in startups was valued at a modest US$32 million (1.1 billion baht), with most investment concentrated on e-commerce.
But Ms Songporn said government policy was to target the creation of at least 10,000 new start-ups in 2018.
And so to Singapore, Australia’s largest trading partner in ASEAN and the region’s acknowledged tech hub.
Singapore recently announced it will hold a FinTech fest in November, underscoring the city-state’s deep and well-developed financial market.
The HSBC report said this make scale easier to achieve for Australian companies looking to overcome the restrictive size of our domestic market, while “its investment attraction schemes offer advantageous incentives to lure foreign businesses to the city-state.
“Singapore has leveraged these strengths to overtake Hong Kong as Asia’s leading financial services hub in 2016. It now trails just London and New York globally, and is ranked far ahead of Kuala Lumpur (36th globally) and Bangkok (47th) among ASEAN financial centres,” the HSBC report said
The Inaugural Fintech Festival will span four days and bunch of generally huge venues.
Oh wait, wasn’t Sydney going to be the FinTech capital of Asia?