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.