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Saturday, 13 October 2012

International students can help Australia to prosper in the 'Asian Century'

Overseas students at an Australian university.
Asia is looming large economically and it seems that there's a certain level of fear in government and business circles that Australia might miss out on the opportunities the region can offer. A story that appeared this morning in the Business section of Fairfax websites points to a new study being prepared for the federal government by a team led by Ken Henry. Apparently “[Julia] Gillard announced the decision to commission [an] Asian century white paper on September 28 last year” and the study is due to be published “as early as this month”.

The Fairfax story has a lot of Asia experts here in Australia saying that we don't have enough people with knowledge about doing business in Asia, and this situation is hurting Australian companies financially because they are not able to do deals in the region. Looking more broadly, outside of this story, there have been some big news stories lately focusing on Asian investment in Australia that are certainly getting the attention of politicians and businesses. Just recently, a Chinese-controlled consortium purchased an enormous cotton growing property in southern Queensland called Cubbie Station. The property’s owners had been looking for a buyer for 3 years and couldn’t find an Australian company that wanted to buy it. Then this Chinese company stepped in and said, “We’ll take it.” A similar thing happened in 2010 when Singapore’s Wilmar International bought Australia’s biggest sugar producer, Sucrogen. No local buyer wanted it.

The question must be, “Why can these Asian companies make a profit out of assets that Australians show no interest in?” How is it that Wilmar can say, “We can make money out of Sucrogen even if Australian business people cannot”? Cubbie Station is the same. What is the reason that Asian business people are able to invest in big assets here, in Australia, while local business people just show no interest at all because they do not see the financial rewards that can derive from these assets? Is it because they have the expertise for doing business in Asia that many Australian companies do not have, or do not have enough of?

The answer, according to the Fairfax story, is "Yes".
In a national strategy paper released last month, Asialink listed language proficiency as just one of 11 ''critical capabilities'' linked to business success in and with Asia.
Others included the ability to adapt behaviour to Asian contexts, work with governments, gain work experience and form relationships.

It might sound basic, but Australian companies are yet to cotton on. Large groups, including ANZ, Rio Tinto and Leighton Holdings, describe attracting and retaining ''Asia-capable talent" as their ''single most pressing challenge''.

And while the lack of true Asia-focused talent has long been lamented, less attention has been afforded to the scarcity of depth in Asia-capability within the Australian public service, which is at the forefront of this country's Asian engagement and policy implementation.

''Australia's public service needs to lift its game in this respect,'' [Ken] Henry said.

It is a view echoed by Andrew MacIntyre, an Asia-Pacific expert at the Australian National University, who said more people were interested in Asia but a smaller proportion had deep knowledge.

''We are fortunate to have a number of people high up in the public service who have got really good Asia expertise,'' he said. ''The trouble is, there are not many of them, and it is not clear what is coming through the ranks behind them.''
Now the answer to this conundrum - it takes time to build capacity in terms of human resources - might be close at hand. According to the ABS, in 2010–11 there were 282,000 student visa applications lodged in Australia and while this is 23% less than the peak of 2008–09, it's still a lot of potential recruits coming through our education system. The problem that is perceived by the business community, however, is language proficiency. I wrote a story about international students back in 2010 and had the chance to talk with Dr Bob Birrell of Monash University about what employers expect from recruits. “At the university level it is not lack of familiarity with the labour market (especially for accountants) but rather lack of English language communication skills that is the problem,” he told me.
In a 2008 study, Dr Birrell and co-author Ernest Healy show that students from mainland China and Hong Kong have a particularly low level of English.

The study looks at how shortages of qualified jobseekers in the workforce cannot be filled by tertiary-educated international students who are vigorously recruited by universities.

It finds that some firms ask for proof of English-language proficiency on the basis of a far higher test result than is required for university admission.

For example, to apply for a job at Ernst & Young, a leading accounting firm, graduates must have minimum International English Language Testing System (IELTS) scores of 8 for listening, 8 for speaking, 7.5 for writing and 7.5 for reading.

The popular IELTS scores people in four bands, where a score of 9 indicates native competency.
Not only do universities require lower IELTS scores than this (the score required depends on the course you are applying for), but the federal government asks for a score of "four 7s" for people who want to use language proficiency as a credential when they are looking to acquire permanent residency in Australia. So business has the problem that they can't find enough people with the skills necessary to do business in Asia, and overseas students graduating from Australian universities - many of whom are Asian - have the problem that their English language skills might not be high enough to get them in the door of a local firm. Securing employment locally is important for many overseas graduates, because work experience - like language proficiency - counts towards getting PR.

But a lot of those young people from Asia who come to Australia are highly motivated. They also innately possess many of the Asia-centric business skills that Australian businesses need to grow as Asian countries develop their economies this century, the 'Asian Century'. As well as adopting measures that can instil knowledge of Asian customs, values, and interpersonal relationships in young Australian people, perhaps the government can work with the business community to find ways to leverage the already existing skills of the many overseas graduates coming out of Australian universities every year. In my mind that's a huge untapped resource. Helping those young people to improve their English language skills might be a better option for businesses, and some strategic investment now might allow them to prosper more energetically in future.

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