Can Australian business tap into the Asian digital economy?
It might surprise Australians to know that one of their nearest Asian neighbours is moving into the ranks of a big world economy. Indonesia is predicted to become the world’s 4th most powerful economy by 2050.
What kind of Indonesia this will produce is hard to predict, as the shape of Indonesia’s democracy is still working itself out. However the nation is part of a regional shift when it comes to the way business is delivered.
The nation’s growth is part of the shift in capital to Asia, including South-East Asia, and an uptake of digital solutions. That presents new challenges, and new opportunities, for an Australia that remains unsure of how to be a part of the massive changes taking place.
This is the message from people who have been closely watching the shift taking place in the region, and was keenly discussed at a panel about Asia’s digital technology and where Australia fits in.
PwC’s Head of Asia Practice, Andrew Parker, talked about the technological improvements in the region.
“I can tell you it is changing fast. It’s like breathtakingly quickly. And I think one of the big mistakes that Australian businesses make is to assume that we, because we’ve got one hundred years of doing things the way that we do, are leading the world and know everything … our companies are in real danger of being cleaned up.”
Indonesia’s President Joko Widodo often speaks of the challenge ahead, which includes building much-needed infrastructure. What a country like Indonesia has on its side is a population of 250 million that is essentially young and this group is willing, and able, to use digital technology in their business ideas.
President Jokowi, as he is popularly known, told a gathering of the nation’s young entrepreneurs that they were a key part of the nation’s projected growth, especially in their uptake of services and digital technology.
A business of the future that has overseas aspirations needs to understand where it can fit into this, says Andrew Parker.
“If we’re going to have global industries, if those industries are not in Asia, I don’t think you can say that we’re a global company or a global country even if we’re not in Asia.”
Efforts are being made to connect more of Indonesia’s young entrepreneurs with counterparts in Australia. For instance, Fintech Australia has set up a visiting program. On a more personal level, an Indonesian VC is keen to get Australian start-ups into his co-working space to share ideas; and to live and work and see for themselves just what is happening. That would put Australians at least next to the Indonesians, Koreans and Japanese all working on the “next thing”.
It also means a shift in thinking, so that Indonesia is seen as a destination, rather than Europe or the US, for Australian businesses to learn about market trends and digital accessibility.
The Chief Executive of Austrade, Stephanie Fahey, says this kind of engagement is vital to Australia’s own economic growth.
“For Austrade to remain relevant we’ve got to change as fast as our clients are changing. We need to be able to ensure that they get into global markets and global value chains and they need to digitise their business.”
According to Andrew Parker, Australia has been protected by regulations, and the fact it is surrounded by an ocean.
“In a digital world that ocean doesn’t mean anything.”