Beyond the myth of Asian exploitation

Carl Jung's theory of the collective unconscious, though not as fashionable as it once was, saw the boundary of the human 'self' as being a bit like a picket fence – we ooze out through the palings, and the collective unconscious oozes back in. Or something like that.

Australian national identity is similar. We've been oozing back and forth across regional borders for decades, developing businesses and trade ties that make thousands of Australians a bit Asian, and similar numbers of Asian nationals a bit Aussie.

And yet, for the second time in living memory, a Labor government has commissioned an extensive report to alert us to this fact. The Asian Century white paper, released in October, is a wake-up call to a business community that is largely awake.

This sudden enlightenment, 23 years after Ross Garnaut's major report, 'Australia and the Northeast Asian Ascendancy', will be a central theme in the federal election later this year (most likely in September or October).

Both major parties will be tripping over themselves to prove that they'll get us ready to exploit opportunities in Asia, while assuring voters that our cultural identity will remain intact. Who can forget the beer swilling Victa-lawn-mower-pushing norms we showcased to the world during the opening ceremony for the 2000 Sydney Olympics? (Okay, Victa was sold to the US-based Briggs and Stratton eight years later, but it's still as Aussie as Vegemite... err, owned by US food giant Kraft).

The debate must not be about Victa and Vegemite, however. A wave of bad news this week is a reminder that increasingly, Australians are uncompetitive with our near neighbours – 700 job losses at Boral, and 170 at Bluescope, are reminders that our economy is becoming less diversified over time. Houses and holes, as columnist David Llewellyn-Smith so succinctly put it, are what we're good at.

But that's where Jung comes in. While economists watch the tonnage of iron ore shipped to China each quarter, or which resources infrastructure project is planned, postponed, cancelled or mothballed, the SME sector is abuzz with new Asian connections. Innovative companies aren't 'Aussie companies' (the narrow definition of 'self') but smart regional players – a long-term trend described clearly by Ash Truscott on Business Spectator a few days ago (Nimble SMEs jump the corporates into Asia, 11 January).

That's the message both the Gillard and Abbott teams should be working on – that being in Asia is not just about BHP Billiton or ANZ Bank.

To the far-off Europeans, this is all pretty straightforward stuff. While there has been a degree of schadenfreude for Australians watching EU econonomies falter – aren't we rich and clever – the reality is that businesses in collapsed economies are forced to think more creatively about how their businesses must move fluidly over national boundaries.

The EU recently sent a trade delegation to Indonesia, for instance, with the express purpose of fostering better ties between SMEs. The Jakarta Post reports today "the EU will ... encourage Indonesian SMEs to improve their capacity to meet growing demand in the Indonesian domestic market, as well as overseas markets, including Europe," adding that the EU and Indonesia are "not in competition with each other but were complementary partners".

As Truscott points out, SME interactions across borders are now a lot more complex than the simple labour arbitrage of yore – he notes that "legal, accounting, engineering and design services will be supplied across national borders."

There is a risk that in the grab for the popular vote at federal election time, Labor and Coalition alike will frame the 'Asian Century' debate as 'them vs us'. But if there is a 'them' at all, it's not Asia competitors so much as the EU and American SME sectors that are already adept at moving across borders. Their Asian centuries began a long time ago.

AWU secretary Paul Howes yesterday called 2013 the "the making or breaking year for the future of Australian manufacturing". Sadly, it looks like the breaking will continue – The Wall Street Journal reports today that China's helping set up a new steel works in Iran.

We can't control that kind of development. But we can recognise where the business activity to replace lost steel industry jobs will take place. The Asian century debate that will heat up going into the next election should have SMEs, and their already extensive links to Asia, at its centre.