24 February 2012
Submissions
Australia in the Asian Century Task Force
Department of the Prime Minister and Cabinet PO
PO Box 6500
Canberra ACT 2600
Dear Task Force,
Issues Paper on Australia in the Asian Century, released by the Department of the Prime Minister and Cabinet
Please find enclosed Diversity Council Australia's submission in response to the Government’s Issues Paper.
Diversity Council Australia (DCA) is the independent, non-profit workplace diversity advisor to more than 150 organisations – many of whom are among Australia’s largest and leading diversity employers.
DCA and its members welcome the discussion paper. DCA members have long recognised the benefits of pro-actively supporting cultural diversity in the workplace and society more generally. This commitment is driven by social and legal imperatives, as well as good business practice.
If you would like any further information in regards to DCA’s submission on this matter, please contact DCA Research Director, Jane O’Leary at
We look forward to contributing through proposed future consultations.
Yours sincerely,
Nareen Young
Chief Executive Officer
DCA Submission
Australia in the Asian Century
Issues Paper
24 February 2012Expert contributors:
Jane O’Leary, DCA Research Director
Jo Tilly, Consultant
Nareen Young, DCA CEO
Diversity Council Australia Limited
Level 25, 133 Castlereagh St, Sydney, NSW, 2000
Phone: 02 9035 2852
Materials contained in this document are the ÓCopyright of DCA Ltd, 2012.
If you wish to use any of the materials contained herein, please contact DCA Ltd at the address above for consent and direction on appropriate acknowledgment.
Contents
1. ABOUT DIVERSITY COUNCIL AUSTRALIA 1
2. CULTURAL DIVERSITY AND THE ASIAN CENTURY WHITE PAPER 1
2.1 The White Paper’s Terms of Reference 1
3. CULTURAL DIVERSITY IN AUSTRALIAN WORKPLACES 2
3.1 The State of Play 2
3.2 The Business Case for Workplace Cultural Diversity 2
3.3 DCA Research 4
4. CONSULTATION ON THE WHITE PAPER 5
5. STRATEGIES TO INCREASE BUSINESS ENGAGEMENT WITH ASIA 6
5.1 DCA Member Case Studies 7
6. SOCIAL DEVELOPMENTS IN ASIA 10
6.1 Migration 10
6.2 International Education 13
6.3. Tourism 14
7. EVOLVING ASIAN BUSINESS PRACTICE & INDUSTRIAL STRUCTURES 15
8. AUSTRALIAN ECONOMIC OPPORTUNITES AND CHALLENGES 16
9. HUMANITARIAN SUPPORT AND HUMAN RIGHTS 19
1. ABOUT DIVERSITY COUNCIL AUSTRALIA
Diversity Council Australia (DCA) provides diversity advice and strategy to over 150 organisations, many of whom are Australia’s biggest employers.
DCA’s mission is to work in partnership with our member organisations to:
· Lead public debate;
· Develop leading thinking, research and practice;
· Enable diversity management in a dynamic environment; and
· Drive business improvement through successful diversity programs.
Funded solely by member subscription and advisory services, our members are Australia’s leading diversity and strategically oriented businesses.
2. CULTURAL DIVERSITY AND THE ASIAN CENTURY WHITE PAPER
DCA’s key area of interest in relation to the White Paper is in assisting the Government and business sector to develop the workforce capability in Australian companies (and their off shore partners) to effectively capitalise on a diverse workforce.
To do this, Australia needs to effectively engage businesses about the benefits of a diverse workforce, promote strategies that businesses can use to best capitalise on their workforce, and develop a policy framework which allows businesses to get the maximum benefit from a globalised employment pool.
2.1 The White Paper’s Terms of Reference
DCA is of the view that the White Paper should focus on policy settings and strategies the Government can develop and support to maximize Australia’s potential to engage productively with our Asian neighbours. In particular, attention should be directed to a number of key areas including business engagement (trade, investment and business development), education, migration, tourism and human rights and humanitarian assistance.
The focus on business engagement should specifically consider ways to increase the capacity of businesses in Australia, in particular their workforce capabilities, to enable mutually beneficial relationships with governments and businesses in the region.
The project to conceptualise all of Australia’s links with Asia and maximize these is an enormous task. DCA considers that it would be preferable to break the project into manageable elements which would provide the Government with guidance about some concrete measures it can take in the immediate term to better support Australia’s positive engagement with Asia. This may also limit the risk that the recommendations of the White Paper are too broad reaching and as a consequence sufficient community support cannot be gained to enable the Government to proceed with implementation.
Issues of regional security, defence, and regional political and strategic relationships would be best examined though another process.
3. CULTURAL DIVERSITY IN AUSTRALIAN WORKPLACES
3.1 The State of Play
According to the Australian Bureau of Statistics (ABS) 2009 data (released July 2010), the usual resident population of Australia was 22 million people. Of this population:
· 25% (or 5.8 million) were born overseas:
- U.K (1.2 million)
- N.Z (529,000)
- China (351,000)
- India (308,500)
- Italy (219,300);
· 41% have at least one parent who has born overseas;
· 16% speak a language other than English at home (the most common languages spoken at home, besides English, being Italian, Greek, Cantonese, Arabic, Vietnamese, Mandarin, Spanish, Tagalog [Filipino] and German); and
· 2.4% identify as being Indigenous Australians and 56,000 speak an Indigenous language.
Recent statistics have shown that Chinese is now the largest ethnic community in Australia, overtaking Italian since 2007. The Census has also shown that Chinese is now the second most used language in Australia, after English.
The language and cultural diversity of Australia's population is also strongly reflected in the workforce and small business ownership. According to the Australian Government Department of Immigration and Citizenship, in July 2010:
· 25% of Australia's workers were born overseas, with 15% coming from non-English speaking countries;
· 67% of the total migration in 2009-10 was for ‘skilled workers’;
· 29% of the total number of small businesses in Australia were owned/ operated by people who were born overseas (2006 Census); and
· 70% of Australia's workforce was employed by small and medium size enterprises (SMEs), with this sector generating the fastest growth rates in terms of employment, exports and innovation.
3.2 The Business Case for Workplace Cultural Diversity
DCA members have long recognised the benefits of pro-actively supporting culturally diverse workplaces. This commitment is driven by social and legal imperatives, as well as good business practice. In Australia, federal and state anti-discrimination laws prohibit employers from disadvantaging employees on the basis of their race or ethnicity. However, the business case for diversity is not simply one of risk management but of tapping into the talent pool of people who identify as culturally, linguistically or ethnically diverse.
The economic driver to capitalise on culture becomes ever more pressing in the face of a fundamental shift in global economic and strategic weight (back) from west to east. In 2010, Australian exports to Asia were worth more than $175 billion. The proportion of Australia’s total exports going to Asia has increased from 50% just five years ago to 63% last year. It now accounts for more than 13% of GDP.[1] China and India have increased their share of world gross domestic product (GDP) from one tenth in 1990 to one fifth in 2010, and this share is predicted to increase to one third of world GDP by 2030.[2] Trade in goods and services with China alone grew by 18.3% in 2009-10. Japan comes a close second and is also Australia’s preeminent investment partner, accounting for more than half of the net inward investment to Australia from Asia and around 15% of total inward investment.[3]
Australian businesses are well aware of the importance of the Asian market. Fifty six per cent of businesses surveyed in the recent AIG/Asialink business survey[4] with current dealings in or with Asia indicated that at least one of their Asian operations is ‘highly important’ or ‘extremely important’. Moreover, just on half of businesses surveyed plan to start or expand their businesses in Asia within 12 months.
In this operating context, Australian businesses with workforce profiles characterised by cultural diversity, intercultural capability, international experience and a global mindset are well positioned to ‘capitalise on culture’. Such a workforce has the capacity to generate the market insight and innovative business solutions that organisations urgently need to thrive and grow in complex regional and global operating environments. More specifically, it:
· Enables businesses to better understand and service the needs of increasingly culturally diverse client bases, both locally and regionally.
· Opens up business networks, assisting organisations to identify and enter new local, regional and international markets.
· Assists with the development of domestic niche marketing. Forty three per cent or 8.8 million consumers in the domestic market are either born overseas or have at least one parent born overseas.[5] Thus, Australian businesses that want to reach their 'whole' market and make their goods and services accessible to all potential buyers cannot afford to ignore such a critical mass of consumers or assume that the 'whole' market has homogenous tastes and preferences.
A workforce characterised by cultural diversity, intercultural capability and international experience can also assist organisations to widen their customer reach and enter new and/or increase market share in overseas markets. Asian countries are key markets for Australian businesses. Australia’s top ten trading partners in 2011 were China, Japan, the Republic of Korea, India, the United States, New Zealand, the United Kingdom, Taiwan, Singapore and Thailand.[6] Over the past five years Australia’s exports to Asia in particular have grown rapidly. In 2006 China, India, Indonesia, Japan, Malaysia, the Republic of Korea, Singapore, Taiwan, Thailand and Vietnam took one-half of Australia’s exports; by 2010 it was nearly two-thirds. In absolute terms, these exports totalled $175 billion in real terms in 2010. Notably, in the five years to 2010 the value of exports of goods and services to the above countries grew by over 10% per year in real terms. This is nearly two and a half times faster than the rate of Australia’s global export growth in real terms over the same period.[7]
While commodity exports remain strong, accounting for a very significant 56% of all exports, the manufacturing and services are important markets accounting for 24.4% and 19.6% of Australian exports respectively[8]. With the structure of our exports shifting over time from overwhelmingly primary products to more value-added and highly manufactured products and services, exporters will increasingly require more detailed information about target markets and their cultures for sophisticated market testing, tailoring of products and more extensive after sales services to allow them to maintain and/or increase their market share.
If Australian organisations are to leverage fully the business opportunities of culturally diverse local, regional and global markets, it is simply not enough to proceed with business as usual - as the Prime Minister has pointed out.[9] Australian employers will need to re-imagine and reconfigure the way they manage talent – they will need to genuinely value cultural diversity and the inter-cultural capabilities this can bring, and source people from culturally diverse local, as well as regional and global settings.
3.3 DCA Research
DCA works in partnership with members to conduct diversity research projects, which lead public debate, foster innovative thinking, research and practice, and generate evidence-based guidance on workplace diversity for the Australian context.
In 2011, DCA initiated a series of industry research projects that aim to inspire Australian businesses to value cultural diversity and the inter-cultural capabilities this can bring. The first of these projects, entitled Capitalising on Culture: A Study of Cultural Diversity amongst Australian Senior Executives and their Immediate Pipeline, is reported on in detail below. Other cultural diversity-related projects investigating the ‘Bamboo Ceiling’ in corporate Australia and cultural diversity on Australian Boards are due to be rolled out in 2012-2013.
Capitalising on Culture: A Study of Cultural Diversity amongst Australian Senior Executives and their Immediate Pipeline[10] is a partnership research initiative between DCA and its members Deloitte Touche Tohmatsu, ANZ, Mallesons Stephen Jaques and Goldman Sachs. The project was conceived in recognition that the first critical step in assisting Australian organisations to effectively ‘capitalise on culture’ is enabling them to measure the degree and breadth of culturally diverse talent in their workforce. Australia has a well established methodology for quantifying some elements of workplace diversity – specifically gender diversity via the Equal Opportunity for Women in the Workplace Agency’s (EOWA) Women in Leadership Census. However until DCA’s initiative there has been no appropriate methodology developed for ‘counting culture’ which is considerably more complex.
In this landmark research project released in December 2011, DCA worked in partnership with our sponsors and relevant experts in industry and academia to develop a first-of-its-kind survey tool for measuring cultural diversity. This survey was used to capture the culturally diverse profile of senior leadership groups in five DCA member organisations 2012. The five participating organisations were DCA members in the professional services and financial services sectors that have a high level of engagement around cultural diversity. These organisations included the ‘Big 4’ accounting and business services firms (i.e. Deloitte, Ernst & Young, KPMG, PwC) and ANZ. The online survey was administered to all Australian senior executives and their direct reports (5762 staff) in these five organisations.
DCA and corporate sponsors will release a follow-up report in mid 2012, which will focus on whether and how the cultural background of Australian senior executives and pipeline executives affects their employment experiences (e.g. employment opportunities, inclusion, bias, stereotyping, identity safety, flexibility). This will enable us to identify actions Australian organisations can take to better attract, manage and retain a high performing culturally diverse workforce.
4. CONSULTATION ON THE WHITE PAPER
DCA notes that the Issues Paper is the first step in public consultation about the White Paper. We believe that effective community engagement is crucial to the success of this project.