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Where does Australia’s future growth lie?

Where does Australia’s future growth lie?

Michael Eidel  ●   08 September 2016

Technology will be a key enabler for more of Australia’s fast-growing small businesses to participate in international trade.

In its most optimistic scenario, the World Trade Organisation (WTO) estimates that by 2035 continued technological progress in trade could boost GDP by 9% in developed markets (1). This is a tremendous opportunity to diversify Australia’s economy and to take fast-growing start-ups into new markets, transforming them into medium-sized business.

We collaborate with leading international fintech, trade, payments and regulators to understand disruptive technologies and megatrends in trade and supply chain for the benefit of our clients. Lisa McAuley, CEO of the Export Council of Australia (ECA), was one of the panellists at our Emerging Digital Futures in Trade client event in July. We identified several areas where global trade and supply chain are overdue for a technology-powered makeover and discussed four key developments that signalled changes afoot in Australia and globally.

Single-window portal

Companies moving goods to and from Australia may have to go back and forth between different agencies several times to process permits and clear goods. Hence the ECA is driving the campaign for a single window electronic platform to facilitate all the border clearance procedures and processes in one portal. The objective is to cut red tape and facilitate trade in a more efficient and cost-effective way.

The project is in its early days. There are several feasibility studies underway, including one looking at international best practice and another to build a business case domestically and investigate how an Australian portal might look.

The single window could go beyond the original concept of border clearance, by linking government, industry and the private sector to support several other processes.

Non-tariff barriers

There is much discussion in Europe about the efforts underway around the world to better understand and address non-tariff barriers. These are barriers applied by countries, other than tariffs, that can restrict imports. Examples include customs documentation, licence requirements, technical regulations, standards and testing requirements.

The United Nations, WTO and International Trade Centre are finalising a new online platform, ePing, that provides businesses and governments with up-to-date information on regulations in export markets, including product requirements and standards. Businesses that sign up receive notifications via email for their specific export markets and/or products.

To try to capture more information about the non-tariff barriers that Australian businesses encounter and address these barriers, the ECA has created an online form as part of the first step towards creating a more comprehensive tool for companies and service providers to report their specific issues. It is hoped this online tool is up and running by the end of the year. For now, companies can use the online form on the ECA’s website so that the ECA can filter the information through to the relevant government contact.

Disrupting the freight marketplace

Another part of the supply chain ripe for disruption is freight forwarding. Cargohound, an online freight marketplace that connects exporters and importers with reliable freight forwarders, cuts the time, cost and risk of shipping goods internationally in a bid to make the industry more competitive.

Shipping is particularly an issue for smaller companies with orders that aren’t big enough to fill a container. If only there was an app for freight, enabling companies to collaborate to consolidate their shipping consignments.

The problem is most acute in regional Australia due to the high cost of moving goods to ports. It makes sense for companies to work with their local business community to facilitate that movement to port, save costs and consolidate shipments.

The importance of SMEs

Australia needs to trade more, diversity its export base and help build the capacity of small and medium sized enterprises (SMEs) to expand internationally. The growth of SMEs is becoming an increasingly important driver of economic growth. According to McAuley, encouraging small businesses to become medium-sized businesses by taking them into new markets is where the future growth of Australia lies. 

For more information on how we can help your business, or to speak to one of our Trade Finance specialists click here.

Michael Eidel
Michael Eidel

Executive General Manager of Cash-flow and Transaction Services

Michael Eidel is Executive General Manager of Cash-flow and Transaction Services. His role is to lead the Group’s portfolio of working capital solutions for business and institutional clients. He’s also an executive sponsor for Commonwealth Bank’s innovation initiatives, including blockchain.

1 https://www.wto.org/english/res_e/booksp_e/wtr13-2b_e.pdf page 96 or page 53 of 68. Updated 28 August 2014.