Regional industry is uniquely placed to take advantage of new technology to help them do business outside Australia's capital cities, at the same time as reaping the economic benefits offered by exporting.
Although regional businesses currently export less (16% of sales) than the national average for manufacturing industry of almost 25%, there are steps that can be followed to boost exports.
That is the main finding of a case study of 10 businesses in the Hunter region of New South Wales.
Conducted by the Australian Industry Group (Ai Group), in conjunction with the Commonwealth Bank,
Voices from the Regions identifies the common factors for successful exporting as:
- a long-term commitment to exporting, articulated in business plans
- strategic links in overseas markets, particularly identification of the right partners
- appropriate planning assistance, and participation in local networks
- a focus on innovation and engineering skills and investments in marketing, including e-commerce.
Significantly, the 10 Hunter businesses view themselves as operating within the global manufacturing market rather than a regional industrial base. The three large firms and seven small-to-medium sized businesses see the export market as a crucial step to expansion for any business.
Says Alan Smith, managing director of United Goninan: "The domestic market only has a finite capacity, one that must increasingly be shared with competition from overseas."
Yet the study found obstacles to exporting remain, particularly for small-to-medium sized businesses. These obstacles include tariff and non-tariff barriers in target markets, lengthy product approval processes, and the lack of financial backing for exporting and R&D ventures by financial institutions.
The other part of the equation is import replacement: sourcing production inputs locally. The majority of businesses in the case study are attempting to increase local content by developing supplier relationships or adding value by producing the components themselves.
The major lesson from the
Voices from the Regions case study is that regional location is not a barrier to exporting, but rather provides businesses with many unique advantages in the marketplace.
All but one of the companies in the Hunter study are looking to increased sales to overseas markets for the future growth of their business. Those companies thriving in the Hunter are making decisions to exploit the opportunities provided by export markets.