Next generation Asian-Australian businesses, which are working beyond the traditional diaspora-based business model, could help drive new global links in the Asia Pacific markets, according to a new research report launched today by the University of Sydney Business School and Commonwealth Bank of Australia (CBA) at CommBank Stadium.
The Asian Business in Australia Research Report, found Australia’s business links with Asia are expanding in new ways. Traditionally driven by the resources sector, Australia’s business links with Asia are diversifying into new industries, such as professional, scientific, and technical services and wholesale trade, and transferring market knowledge and technologies from advanced Asian markets, such as South Korea, Japan and China.
“A new generation of Asian-Australian entrepreneurs are looking for opportunities in their ancestral countries and pioneering transnational collaboration in areas such as manufacturing, digitalisation and e-commerce,” said the report’s author Dr Wei Li, from the University of Sydney Business School. “The cliché of migrant entrepreneurs as outsiders with low formal qualifications and poor language skills has given way to generational change.”
Co-author of the research, Professor Hans Hendrischke, from the University of Sydney Business School said: “Our case studies outline the breadth of Asian-Australian business ecosystems that combine migrant and diaspora-based traditions with connectivity, digitalization and new modes of collaboration across opening regional borders. These business networks and ecosystems provide passageways and opportunities for Australian businesses in Asia.”
Mark Couter, CBA Executive General Manager Commercial Banking, said: “We are delighted to be showcasing the new generation of Australian-Asian entrepreneurs and their innovative and tech-leading businesses.”
“CBA is committed to being the most trusted and respected business bank of choice for the Asian business community in Australia and businesses with Asia linkages. We are always ready to do business with the Asian business community and want to help them flourish.”
Highly educated
The Asian-Australian businesses surveyed were found to be culturally integrated, and have staff who are highly educated with mainstream professional work experience. The businesses have moved away from the traditional diaspora-based business model and goods imports and exports.
Nearly one-third of the sample were younger than 40 years old, and another third were in their 40s, and all surveyed entrepreneurs have at least one local or overseas tertiary qualification. It was notable that most had gained corporate work experience in professional or managerial positions before starting their own business.
Asian partners
The study found younger Asian-Australian businesses operate in mainstream markets and pursue business in new industries and across local, national, and regional borders.
“More than their parents, this new generation of entrepreneurs are intermediaries between Australia and regional economies,” Dr Li said. “Their unique competitive advantage lies in transnational business ecosystems in Asia, supported by a mixture of family, business, and social networks. They can help Australian businesses diversify their products, services, suppliers, technologies, and markets.”
Seventy-four per cent of Asian-Australian businesses responded that they interact with the members of their family networks for business purposes on a weekly basis.
The survey found the key reasons to cultivate ties with Asian regions were to reduce costs, to access resources, to enter new geographic markets, and to access innovation.
Stronger links
The report found Australia is more deeply integrated into Asian value chains than into North American or European value chains in value-added terms.
“Our business links with Asia are driven by the more complex Asia-Pacific manufacturing value chains but is also expanding into new industries,” said Dr Li. “These value chains in the Asia-Pacific region are stepping stones for Australian exports into global markets.”
About the report
The research was funded by Commonwealth Bank Australia and The University of Sydney Business School Industry Partnership Grants.
An online national survey was conducted to learn about the characteristics of Asian-Australian businesses in Australia and understand how they expected to come out of the COVID-19 pandemic.
For the survey, Asian-Australian businesses were defined as entities registered with ASIC and ARO, and founded or owned by people of Asian heritage (for example, Chinese, Malaysian, Korean, Indian or Vietnamese).
The survey was promoted nationally with the help of local Asian-Australian business chambers, industry associations, social media platforms, and CBAs commercial business banking network. Seventy-two people responded and completed the survey.
In terms of business size, 37 percent registered annual revenue below AUD two million, 31 percent between AUD two million and ten million, and 32 percent above AUD ten million. The majority of respondents (69 percent) employ fewer than 20 people, and 19 percent employ between 20 and 49 people.
More than 46 percent of the companies had existed for less than 10 years, 33 percent between 10 and 20 years, and 21 percent more than 20 years.
