How does Australia measure up on its Asia capabilities?

Media releases

For Australian businesses, one of the biggest impediments to realising business and investment opportunities in the Asian region is a lack of understanding about Asia capabilities – in particular which capabilities are critical to business success and how prevalent they are in the workforce. In ground breaking research, Diversity Council Australia (DCA) has now surveyed a nationally representative sample of more than 2,000 Australian workers to generate the first ever National Scorecard of Australia’s Workforce Asia Capability.

‘Asia capability’ (A-Cap) is defined as individuals’ ability to interact effectively in Asian countries and cultures, and with people from Asian cultural backgrounds, to achieve work goals. The findings released in DCA’s report, Leading in the Asian Century: A National Scorecard of Australia’s Workforce Asia Capability, reveal there is significant scope to better cultivate workforce Asia capability in Australian organisations.

Key findings include:

  • There is a strong business case for fostering workforce A-Cap. Seven out of Australia’s top ten export markets are in Asia, and constitute 66% of our total export market. More than 50% of the world’s population lives in Asia and its consumer demand is worth US$10 trillion annually, similar to the U.S.
  • But a third of workers have low A-Cap. While one in ten (10.8%) of all Australian workers have excellent Asia capability, one third (34.7%) have none or very little. Close to two-thirds of workers have no or very little working knowledge of how to effectively manage in Asian business contexts. Overall, our workforce scores three out of five for Asia capability.
  • Senior executives & managers are more likely to have higher A-Cap. Australian senior executives and managers are more likely to have excellent Asia capability than non-managers (13.9% of managerial workers versus 10.3% of non-managerial workers).
  • Asia capable talent is available. A-Cap is considerably higher in some groups – in particular the 16.7% of Australian workers who have an Asian cultural identity, the 15.9% who have lived and worked in Asia and the 20.9% who can read, write and/or speak an Asian language (at least basic proficiency level).
  • Fluency in Asian languages is low. Only 5.1% of workers are fluent in one or more Asian languages (i.e. can comfortably discuss and write about highly complex issues with colleagues/clients in an Asian language).
  • Having business interests in Asia doesn’t guarantee A-Cap. Workers in organisations with Asian business interests are less likely to have excellent Asia capability (16.4%) compared with workers in an organisation with an Asian head office (29.8%).
  • There is too much talk and not enough action. While a fifth of workers said their organisations valued the A-Cap of their workforce (19.1% strongly agreed), fewer said their organisation was likely to effectively use these capabilities (12.6%).

Lisa Annese, DCA’s CEO said the research reveals important findings for Australian business.

“There is little doubt that Asia presents enormous opportunities for Australian organisations. But what’s been less clear is how well equipped we are to grasp these opportunities. Through this research, we can now see how and what we need to do to cultivate workforce Asia capability in organisations. The good news is that the solution is already available to us – if we focus on existing Asian-identifying talent, as well as better recognising and rewarding workers who have lived and worked in Asia, and those who have Asian language proficiency,” said Lisa.

Norton Rose Fullbright

Wayne Spanner, Managing Partner in Australia, Norton Rose Fulbright said realising the opportunities coming out of the Asian Century is one of the most important discussions for individuals, businesses and governments in Australia.

“Norton Rose Fulbright is a global legal practice with offices throughout the Asian region, so having a linguistically and culturally diverse workforce in Australia is incredibly important to us. This report provides the blueprint for what more Australian organisations can do to maximise our geographical proximity to Asia and the unique relationships we have as a result of it. It is a crucial part of our national conversation about Asia capabilities, a conversation that is only set to continue as the links between Australia and the region continue to grow,” said Wayne.

Telstra

Andrew Penn, CEO, Telstra said for many Australian companies, the key issue is no longer the risk of doing business in Asia, it is the risk of not doing business there.

“It is critically important Australian companies develop the capabilities to succeed in the region. Among many others, those capabilities include the adoption of a global orientation, embracing new technological capabilities and improving the Asia-literacy of their people. Telstra has operated across Asia for more than 60 years and we continue to invest in and build our capabilities across the region. We continue to learn through our operations in Asia and are pleased to be able to support this important work to inform the views of the business community,” said Andrew.

About the research

Leading in the Asian Century: A National Scorecard of Australia’s Workforce Asia Capability is a partnership research initiative between Diversity Council Australia (‘DCA’), Norton Rose Fulbright, Telstra, and the CIMIC Group, supported by Asialink Business.

Through a rigorous process, DCA identified seven key Asia capability (A-Cap) Domains that were associated with Asia capability, in particular those associated with positive organisational outcomes: Cultural Intelligence; Asian Cultural Knowledge; Asian Cultural Experience; Asian Language Proficiency; Asian Social Capital; Asian People Management Lens; (Asian) Multicultural Identity. DCA commissioned Colmar Brunton to conduct a nationally representative on-line survey of 2,000 Australian workers against these criteria.

'Asia' is defined broadly to include North East Asia (China, Japan etc.), South East Asia (Indonesia, Malaysia, Philippines etc.) and South Asia (India, Pakistan etc.).