The Australian Trade Commission has announced it will shift its focus to emerging markets by removing some of its resources from North America and Europe.
According to Trade Minister Craig Emmerson, Austrade is keen to beef up its presence in places like Latin America, Africa, Central Asia and western China.
An agency review reveals Austrade staff are involved in around four times as much successful trade to places like India and Korea than to the US and Britain.
Emmerson said the agency’s expertise is proving to be more valuable in emerging markets, a sentiment also felt by Austrade chief executive Peter Grey.
According to Grey, exporters are more satisfied by on-ground market assistance rather than more general promotional activities.
“We can be useful to an exporter in London, but we can be a lot more useful to an exporter in India or western China,” he says.
Austrade plans to halve its locations in North America and Europe and refocus remaining offices on investment promotion and education exports.
It will also shift more of its staff out of Australia to frontline offices, and reduce the number of seminars and trade missions that it conducts.
The agency plans to cut back on its partnerships with other institutions for trade promotion activities in order to focus on more direct market expansion strategies.
It will also use the internet to provide more introductory advice to new exporters so that trade commissioners can concentrate on companies with better prospects of significant exports.
Australian Industry Group chief executive Heather Ridout says while Austrade’s decision to shift its focus to Asia makes sense, the changes to its operations in Australia will affect SMEs.
“The new focus by Austrade on assisting export-ready businesses will require an adjustment from business as usual,” she says.
“Smaller firms in particular, which had previously used Austrade as a one-stop-shop, will need to seek assistance from other government agencies and the private sector at the front end of their export planning.”
“This will require efforts to improve co-ordination across all government programs designed to assist Australian firms, in particular SMEs, in their export activities.”
While the changes could dampen the aspirations of companies looking to crack the American market, local tech experts say the reliance on places like Silicon Valley is gradually weaning.
Mick Liubinskas, co-founder of tech seed fund Pollenizer, says many Australian companies are choosing to venture to the US much later or not at all.
“The old model was to test your idea in Australia and then get it to the US as soon as possible… But a lot of Australian start-ups are now avoiding the US because it is so competitive,” he says.
Similarly, veteran tech entrepreneur Matt Barrie says the beauty of being web-based is being able to go global without having to relocate somewhere like Silicon Valley.