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Doubling the number of ExportersThe task & the tools
Presentation by Frank Walsh
State Manager NSW/ACT
Australian Trade Commission
AFIF 2003 Annual Conference
Doubling the number of exporters
50,000 exporters by 2006/7. An increased from 25,000 in 2000/1. Why the challenge? Can it be achieved?
Exporters – Global Comparison
Currently 4% of Australian business export
- the same as the US – low by world standards
- Austria 68%
- Finland 58%
- Netherlands 57%
- UK 48%
- France 43%
- Spain 34%
- Canada 15%
Scope and challenge to increase – real benefits
Real benefits
Export revenue
Doubling the number by 2006 could general additional export revenue 5% - $40 billion over 5 years.
Economic benefits
Business benefits from economic growth – from exposure to international opportunities – efficiency gains through knowledge transfer.
Social benefits
Improve labour market outcomes for firms and workers.
One in five jobs in metropolitan areas – export related.
One in four jobs in regional areas – export related.
The key trends: a new generation of exporters
Small is beautiful
Knowledge is power
Generation X is becoming generation eXport
The regions are reviving
Internationalisation is opening up new opportunities for SMES
Source: ABS, Business Longitudinal Survey 1994/95-97/98
Micro and small businesses are growing in importance
Number of exporters
Exporter revenue
Growth in number of exporters and export revenue by size1,1994/95-97/98Average annual rate of change2, percent p.a.
11
9
4
-5
20
11
5
-1
Micro
Small
Large
Medium
Note 1: By employment (micro 1-4, small 5-19, medium 20-199, large 200+)Note 2: See definition in Appendix B
But knowledge-based exports are growing faster, especially in services
7.8
10.9
5.0
3.8
10.3
9.5
4.3
Source: Data supplied by ABS on DFAT, STARS database
Low-tech manufacturers
Medium-low-tech manufacturers
Medium-high-tech manufacturers
High-tech manufacturers
Knowledge-based services
Non-knowledge-based services
Primary
Average annual export revenue growth by industry, 1992-99Percent p.a.
Non-knowledge-based exports
Knowledge-based exports
However there is plenty of export action in many traditional sectors
Top-20 fastest growing export sectors, 1996-2000Average export growth, percent
Source: IBIS world.com 1996-2000 (sectors over $10 million in exports in 2000)
Non-knowledge-based exportsKnowledge-based exports
19.921.522.723.123.623.924.624.925.425.926.326.427.628.529.7
32.833.8
41.743.3
76.5Prefabricated building manufacturingInformation storage/retrieval services
Film and video productionNewspaper printing or publishing
Accounting servicesWine manufacturing
Motor vehicle manufacturingShipbuilding
Market research servicesMotor vehicle body manufacturing
Spirit manufacturingTobacco product manufacturing
Oil and gas extractionAquaculture
Finfish trawlingClay brick manufacturing
Automotive component manufacturingData processing services
Pulp, paper and paperboard manufacturingPlastic blow moulded product manufacturing
Growth in knowledge-based services exporters by age, 1994/95-97/98(Percent)
There is significant growth in young knowledge-based services exporters
Source: ABS, Business Longitudinal Survey 1994/95-97/98
27
1994/95
More than 20
Years in Business
40
25
917
25
55
4
1997/98
10-19
5-9
Less than 5
4,118 exporters 5,852 exporters100% =
Proportion and growth of exporters by location, 1994/95-1997/98
There is still a predominance of exporters in metro areas, but fastest growth in non-metro areas
Source: ABS, Business Longitudinal Survey 1994/95-97/98
20
80
Non-metro
Metro
Average annual growth in number of exporters Percent p.a.
Non-metro
Metro
Average annual growth in exporter revenuePercent p.a.
5.9
17.9
3.6
0.2
Proportion of exporters, 1997/98 Percent p.a.
Source: Yellow Pages business index, May 2001
Internationalisation is more than just exporting
Exporting
Importing
Acquiring license/franchise
Joint venture in Australia
Global Supply chain
Strategic alliance in Australia
Granting license/franchise
Inward investment
Joint venture overseas
Outward investment
Foreign aid procurement
Percentage of internationally active SMEs by type of activity, 2001
67
61
9
9
8
7
7
6
5
4
2
Source: Austrade based on ABS, Business Longitudinal Survey 1994/95-97/98
Around 2% of the non-exporters expressed an intention to export
Intenders
Intenders
Non-exporters 96%
Non-intenders
2%
98%
Note 1: Non exporters surveyed in 1994/95 who expressed their intention to export within the next 3 years.
Source: Austrade based on ABS, Business Longitudinal Survey 1994/95-97/98
While 50% of new exporters were accidentals 1
New exporters
Born globals25%
Accidentals50%
Successful intenders25%
Intenders
Non-exporters 96%
Non-intenders
22% success rate within 3 years
New exporters
20%
Start-ups
2%
98%
Note 1: Exporters in 1997/98 who did not export nor express the intention to export in any of the previous year of the survey.
A whole of government approach is in place
To support the development of a more extensive export culture.
To multiply networking activities and provide
opportunities to potential exporters to help them take their
first step as ‘accidental’ exporters.
To develop a partnership approach to identify potential
exporters and co-ordinate services to exporters to a higher degree.
Plus new partners and new programs.
New Exporter Development Program
A practical program of assistance for new exporters.
The program offers advice – counselling - education - and Specific Market Prospects Assessment for the clients products or service - in up to 3 markets - a report on prospects and recommendations – and up to 5 relevant market contacts
A practical program to expand AFIF clients export activities.
Target visits and activities
To stimulate client interest – Austrade is significantly increasing the number of Austrade post staff visiting Australia – 42 visits from mid May to end June.
To participate in seminars and events.
To meet with individual clients.
And we are active in the regions – not just the CBD.
New Partners
The New Exporter Development Program is delivered by partners under the TradeStart program.In New South Wales / ACT our partners include:
NSW Department of State & Regional Development Australian Business Ltd Australian Industry Group Australian Interactive Multimedia Industry Association Dubbo City Development Corporation Australian Institute of Export
They each have client targets and sales targets.
A Progress Report
ABS figures show an increased to 31,450 – an increased of 6,450 over the year.
New Exporter Development Program should sign up 2,400 this year.
Ambition aim is to get 600 to make a sale this year. We are tracking progress carefully. Can AFIF play a role?
AFIF – and new exporters
In order to help double the number of exporters, Austrade is partnering with organisations whose members have close contact with potential exporters and are in a position to encourage internationalisation. Scope for an Austrade-AFIF partnership may exist and would accord with AFIF objectives.
Austrade would offer professional development to enhance AFIF members’ skills in export advocacy, export readiness, market selection, and strategic market entry.
Members would then be in a position to offer export advice to their client base. Advice would be supported by appropriate processes and systems.
AFIF – new exporters
We can jointly work to turn occasional exporters into long term exporters, and assist AFIF members’ clients grow their international activities in a sustainable manner – generating repeat freight business for you.
The aim of doubling the number is ambitious but early signs are that real progress is being made. The challenge is to maintain and grow the momentum and programs and promotions will continue to be important components. Partnerships are being formed with appropriate professional service providers and Austrade would welcome further discussions.