Local ICT companies look to Asia
- 25 June, 2008 12:27
The Australian Trade Commission, Austrade, is claiming economic and ICT growth in South-East Asia and China are opening up a raft of opportunities for Australian technology providers.
The organisation recently helped more than 60 Australian ICT companies to showcase their wares in Singapore at the CommunicAsia 2008 tradeshow. For the first time, it also worked with 11 Australian companies to participate in China's CISI information services fair. These include inventory management systems developer, Micronet Systems Australia; Commercial software provider, Uniware; and Intelliguard, which provides technology to protect organisations from denial-of-service attacks.
According to Austrade's national industry manager for ICT, Peter Harrison, Australia's ICT exports to ASEAN countries increased by almost 15 per cent to $415 million during 2006-2007. He also pointed to figures from the World Information technology and Services Alliances, which found that Asia-Pacific countries spent $US877 billion on ICT last year.
"For a long time we've been pushing ASEAN as a destination. Typically, Australian companies have wanted to go to the UK and the US because they think it's less challenging than Asia," Singapore-based trade commissioner, Cheryl Stanilewicz, said. "But companies that do come to Asia find tremendous opportunities. And it's the same time zone, it's cheaper to visit and unlike the US, the interest in doing business with Australian companies is very strong."
Stanilewicz highlighted Indonesia, the Philippines, Malaysia, Singapore, Thailand and Vietnam as key growth areas. Technologies in demand range from 3G installation and e-security to enterprise software and vertical market application, bioinformatics and digital content.
"We see a lot of opportunity around e-health, wireless applications, education, manufacturing and logistics, particularly in places like Singapore which is focused on being a knowledge economy," she said. "In Singapore, the push is a combination of government and private sector - if they want to stay ahead of the game, they need the telecoms and IT infrastructure to drive innovation, so they are providing incentives to get companies to set up here.
"Even in places like Vietnam the government is determined to build ICT infrastructure and has tax rebates aligned to this. While in Indonesia they're looking for cost-effective telecoms, and banking and finance is also strong."
With double-digit annual growth, China is also calling out for ICT support, according to Beijing-based senior trade commissioner, Phil Ingram.
"The explosion in the early days was infrastructure such as telecommunications and PC and servers, so the industry was focused on the hardware side," he said. "We're now entering a new stage and going upstream to more value-added ICT such as software and systems. The opportunities are just starting for Australian companies in China as compared to places like Korea and Japan where there are more established ICT industries for hardware and software."
Ingram said Austrade was working with companies providing business software for accounting, back office work flow, call centres, hospitality and services industries. Other vertical market hotspots in China where Australians have shown strong innovation and signifi cant skills included mining, health and the environment, he said.
Australian technology companies participating in the recent Austrade tradeshows said the size and scope of the Asian region was irresistible. Micronet Systems Australia is taking its first steps into China after establishing business in A/NZ, South Africa and several South Pacific islands.
Director, Drew Arthur, admitted language was the biggest challenge but said translation services were broadly available.
He claimed China's Internet infrastructure was better than that in many other countries Micronet works in.
"We are used to these types of challenges in a small business environment - it's just part of the game," he said. Micronet is now working on developing multilingual versions of its software products.
"There's plenty of opportunity to employ people in China without necessarily partnering - we've not decided our strategy yet," Arthur said.
Text messaging software provider, Red Oxygen, has 14 staff and sells product locally as well as in Europe and the US. CEO, Tom Sheahan, said the US and Europe are easier places to navigate than Asia - China because of the language challenges and India because of cultural differences. But the size of the Asian markets was a major draw card.
"There's 16 billion phones in China, India has 600-700 million. And there are no Blackberrys - Asian corporates are using text messages to communicate," Sheahan said. "IBM is now helping us sell our software in India and China and we've just landed a deal with an operator in India."
Mobile payments developer, Mint Wireless, is looking to leverage existing partnerships with Optus/SingTel as well as Microsoft to grow its Asian presence, initially in Singapore.
"The CommunicAsia show has been a resounding success for us... it's opened up my eyes. The people in this region are fast movers and their adoption of technology much quicker compared to Western economies," CEO, Alex Teoh, said.
Ingram and Stanilewicz agreed language barriers made it difficult for Australian companies to break into Asia but claimed partnering was one way to overcome difficulties.
"The most successful companies are the most persistent and those that come prepared with examples of who they have worked with previously," Stanilewicz said. "It's about building relationships and being here for the long haul.
"We still have to work hard to brand Australian ICT in the region and overcome the perception of Australia as a producer of food, commodities and education."
Ingram admitted there were also valid concerns around intellectual property but said these shouldn't be a "deal breaker" for companies that undertook due diligence and paid attention to IP protection.