Networking in Dunedin
Action Asia Business hosted members of the Otago Chamber of Commerce in Dunedin for the launch of the new Outlook 09 report and a discu
Action Asia Business hosted members of the Otago Chamber of Commerce in Dunedin for the launch of the new Outlook 09 report and a discussion on doing business with Asia.
With the repercussions of the global economic downturn in mind, we asked Mitchell Pham of Augen Software to share his experiences of successfully managing a New Zealand-based business that leverages off its resource base in Vietnam and has helped other New Zealand businesses to expand into Asian markets.
Asia:NZ’s business director James Penn pointed out that the current downturn can be a moment of opportunity for New Zealand exporters to develop their competencies and capabilities with regard to growing Asian markets.
With increasing demographic diversity comes a diversifying New Zealand workforce, and that is true in the case of Dunedin in particular, where the Asian population is predicted to increase by 50 percent by 2021 according to the Outlook 09 findings.
A practical implication of these changes for business relates to the skills that Asian migrants or Asians born in New Zealand bring to the New Zealand workforce. Asians tend to speak more languages than most other segments of the population – 61 percent speak a language other than English, and 14 percent speak more than three languages.
Asians as a group also tend to be highly educated. Looking at educational achievements, 25 percent of Asians hold a university degree qualification, compared with 17 percent of the Dunedin population as a whole.
Making use of multilingual skills and higher education qualifications will be an asset to local businesses in their efforts to build and maintain relationships with the Asian region: a strategy that is of unquestionable benefit to New Zealand’s export-driven economy.
Local businesses also benefit from the high number of Asian international students, attracted by the educational reputation of Otago. In 2007, 43 percent of the 2,546 international students enrolled at the University of Otago were from Asia. In addition to immediate benefits for the local economy, these students represent a pool of future contacts in Asia, with whom it is important to nurture lasting relationships for the future.
The importance of drawing benefit from connections with Asia was confirmed by comments from guests during the discussion.
Despite New Zealand’s excellent business environment for innovative start-up businesses, a concern for one local business with ties to Malaysia was the lack of readily available venture capital. With plenty of capital in Asia and Asian investors actively looking for opportunities to invest in innovative businesses, the firm is hoping to leverage off connections in its search for funding from Malaysian investors.
Large markets in Asia for New Zealand products and services cannot be ignored. Some Asian governments also have large amounts of capital earmarked as grants to start-ups that are registered in their countries.
The experience of many Dunedin-based companies present confirmed that collaboration is essential. Local businesses are looking for ways of making use of other New Zealand companies’ knowledge, experience, resources and presence in Asia to assist them in entering and growing business in Asian markets. Although some businesses are yet to enter Asian markets, they were encouraged by demonstration effects such as Mitchell Pham’s company’s expansion into Asian markets.
Collaborative business models involving innovative New Zealand design, further development and manufacturing in Asia, and the use of cost-effective manufacturing and distribution partners with the right channels to market, may well be a viable business model for many Dunedin-based companies. Many Asian businesses also have well developed distribution channels in the United States and Europe.
This networking event was a good opportunity to stress the strategic importance to the New Zealand economy of being part of the Asian region in this time of economic uncertainty. Asia is likely to prove more resilient, and its growth rates higher than those of other regions during the global economic downturn.
Therefore staying the course in Asia is imperative; relationships matter in Asia, and they matter more when times are tough. Building up Asia-relevant skills in human resources and fostering relationships in the Asian region will enable New Zealand companies to make the most of their innovative capabilities in the future.
For more information, contact James Penn at jpenn@asianz.org.nz
