31/08/2012
If Australia is to extract maximum value from Asia's new found economic position, planning needs to happen now, Insurance Australia Group (IAG), Managing Director and CEO, Mike Wilkins told a CEDA audience in Brisbane.
"Australia needs a comprehensive approach to making the most of this opportunity and governments, business and the broader community need to work in unison to strengthen our Asian ties," he said.
"While the Asian economic power shift is long term, our window is only fleeting.
"The immaturity of Asia's markets and Australia's current economic strength are both ultimately transient, so the foundations of longer term co-operation need to be laid now - before it is too late.
"I consider Asia a once in a lifetime opportunity, and my greatest fear would be to have to confront the management and shareholders of IAG in future years and have them question why today's management squandered it."
Mr Wilkins said by the year 2020:
- Middle class consumption in Asia (excluding Japan) will increase 185 per cent to US$12 trillion;
- Asia will have more middle class consumers than the rest of the world combined; and
- Asset ownership in Asia will increase 203 per cent to almost US$100 trillion.
"The Asian Development Bank goes on to estimate by 2030 Asia's annual consumption will reach $32 trillion - almost half of all global consumption," he said.
"I would challenge anyone with a view that Asia doesn't represent opportunity for their business or industry.
"Only a few businesses and industries couldn't find a way to be excited by the economic revolution…right here on the door step of Australia."
The opportunity is particularly exciting for Queensland which is "positioned comfortably close to Asia in the north with a skilled workforce, good infrastructure and a can do attitude," he said.
Mr Wilkins said while the natural resources and mining industry has somewhat dominated conversations around the Asian century, "the fact is the Asian boom is not just for resource companies or large multinationals, SMEs (Small and medium enterprises) have a massive opportunity with the right support and strategy".
Since 1998 when IAG first went into Asia, we had a slow and steady strategy of boosting our Asian footprint, he said.
Today IAG operate in India, Thailand, China, Malaysia and Vietnam, with the Indonesian market on the horizon.
Based on his market experience Mr Wilkins outlined four crucial tips for any business looking for success in Asia:
- Boldness and belief;
- A sound model;
- Patience and long term planning; and
- An appreciation and respect of cultural differences.
Mr Wilkins also said the release of Asialink's report calling for the development of a National Centre for Asia Capabilities would help create an Australian workforce that is fully capable of capitalising on the Asian opportunity.
Download a copy of Mike's speech