Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, to the Young Presidents' Organisation International Conference for the Asia Pacific Region, Cairns, 21 August 1997.

Introduction

It is a great pleasure to be here in Cairns, and to have the opportunity to address this distinguished audience - the Young Presidents Organisation Area Conference for 1997.

The Cairns region is a particularly dynamic and exciting part of Australia with a well deserved reputation for hospitality and excellence in service. You could not have chosen a more attractive location for this conference.

I want to speak briefly about the leadership challenges of the global economy, the prospects in the Asia Pacific region, and the critical links between technological change, innovation and export performance. I want, in particular, to give you an Australian perspective on these developments as we look ahead to the 21st Century.

The Young Presidents' Organisation - CEOs of the World Unite !

I understand that YPO members from all over our region and beyond are attending this conference - from as far afield as Saudi Arabia and as a close to home as New Zealand.

The YPO is a unique, talented and valuable organisation, if its membership criteria is any guide. Those invited to be members must hold the CEO position of a company employing more than 50 people, with a turnover of more than US $ 8 million.

More than that, the invitee must have attained the position of CEO before turning 40 years of age, must join the YPO before turning 45 and then must `hang up their boots' when they turn 50.

The YPO has an Australian membership of over 220 CEOs, with a combined turnover of 24 billion and some 90,000 employees. CEOs from a wide slice of Australian corporate and business life are YPO members.

The Global Economy - Leadership Challenges

I notice that the Conference theme this year is "The Great Barriers" - particularly how these barriers can be navigated successfully in our personal and professional lives.

That is a very appropriate theme because the challenges and barriers we face - whether in the public or private sectors - are as much regional and global as they are national.

Many of the CEOs from Australian businesses that are taking part in this conference are already active participants in international markets. You know from your own experiences the challenges of participating in the global market place and the opportunities that are waiting to be found and exploited.

The `facts of global economic life' are easily summarised, but their implications for individual countries and companies are less easy to chart. Production processes are becoming integrated among many countries. Globalisation is one of the main reasons why the trade effort is becoming much more complex and more challenging.

Competition is intensifying, national boundaries are becoming less relevant in global trade, and industries are no longer dependent on domestic markets to nurture them. The boundary between domestic policy and international policy is blurred, if not completely lost.

This all-encompassing drive towards internationalisation and globally integrated production is relentless. If anything, it will gain even more momentum in the future, not less - that much is certain. The choice for Australia is the extent to which we participate in a wealth- generation process of global proportions, and harness its potential, not whether we participate.

Improved competitiveness at home and better market access abroad will be critical if we are to continue to be successful in building exports and jobs for Australia. I know that many of our friends and neighbours in the region have similar strategies.

This means that the qualities needed for successful leadership in the Government and business sectors are not all that different - long range vision combined with a sensible and pragmatic approach to problem-solving that aims for tangible results - whether for customers, shareholders or taxpayers.

Excellent Prospects in the Asia Pacific

That leads me to the fastest growing region in the world - the Asia Pacific. Regional growth may have slowed a fraction in recent times - and national currency adjustments are in the headlines - but the Asia Pacific can still boast very impressive economic performance.

World Bank predictions have East Asian economies growing at over 7 per cent a year to the year 2004. That's two and half times faster than the rest of the world. By 2020, four of the world's ten largest economies will be in Asia.

These changes have raised important questions about the sustainability of growth and political stability, as well as resource, environmental, population growth and demography issues.

Asian demand for infrastructure capital could average US$ 150 billion annually during the next decade, almost twice the capital flows into Asia in peak years to date.

An ever increasing part of Australia's income is gained through trade with Asia. That is why the Government is improving the well-being and prosperity of all Australians by raising Australia's per capita income through increased trade.

Of course, Asia is a region not only of immense opportunity, but of ferocious competition. This means that Australia must continue to respond to the changing market structure in the region - that is the best way to make our market share even greater.

Australians have many resources, both natural and human, to capitalise on. In addition, our proximity to Asia gives us a comparative advantage over more distant trading nations.

But that is not enough. We have to become better than our competitors at developing and producing what Asia requires. I am also convinced that government and business can do better at working together to improve Australia's share of the Asian market.

Trade, Innovation and Export Performance

It is no coincidence that the Asia Pacific is at the cutting edge of technological change and innovation.

I am convinced that the way of the future is the wave of open, wealth-generating economies that draw their prosperity, first and foremost, from the economic strength and trading prowess of the regions in which they live and trade.

Technological change is one of the most powerful factors driving market development and the more esoteric world of ideas. The technological revolution provides massive opportunities in all areas of activities. The challenge will be how we can use the opportunities it presents to advance our national well-being.

Technological change and innovation determine the development of international trade by opening up borders that would otherwise remain closed. While tariffs are still an important impediment to the expansion of our exports, market access is no longer only about border protection. Investment, market presence, movement of professional people and the protection of ideas have become crucial for the expansion of international trade.

Technology is also driving major changes in the economic, political and social environment. A major task for us as a nation is to adapt quickly and maximise the returns from trade in a rapidly changing technological environment.

One recent technological development shows clearly how the productive forces sweeping across regional economies can be harnessed for the benefit of all countries.

The Internet increasingly offers a two-way communication that overcomes traditional barriers to successful trade. It transcends barriers of time, is economical, accelerates communication, and it enables customers to seek out suppliers world wide. While it is difficult at this stage to see the Internet reducing the need for person to person links, it does provide greater scope for facilitating these links.

A US research company, Forrester Research, recently estimated that the current $518 million of goods and services sold on the Internet will reach $7 billion in transactions by the year 2000.

Australia is the fourth largest user of the Internet for business communications in the world. It has 8 per cent penetration, pipped only by the US with 9 per cent, and Finland and Sweden where more than 10 per cent use the Net for business communications and information.

Though it is not widely appreciated, I believe that Australians understand well the vital link between trade and innovation, and how this will underpin our export performance more and more.

Indeed, the Australian tradition of innovation and inventiveness is well-established and extends across the full range of human endeavour. But this is not a fact that is well known outside Australia, and especially not amongst Australia's major trading partners in Asia.

Australia is still widely perceived as an economy based on agriculture and mining, and this can sometimes hinder our ability to gain acceptance as a world class supplier of sophisticated and high technology goods and services.

We are working hard to change that, and to foster a more durable export culture in Australia. The government is building our exporting capacity because greater exports means more jobs for Australians. It is a task we are tackling on two fronts.

First, we are getting our economic fundamentals right to ensure Australian firms are competitive on the international stage. Second, we are protecting and defending Australia's economic and trade interests through our integrated trade policies which address market access issues in a number of forums.

We have demonstrated our capacity for competitiveness in the export of minerals and primary products. We are making great strides in improving our manufacturing export base. Our services exports are growing very rapidly, and they in particular offer scope for adding value and promoting employment.

Conclusion

In conclusion, as this century draws to a close, the forces that will shape our future are readily apparent. Economic globalisation, technological advances and the impact of trade liberalisation are fundamentally altering how we - Governments and industry - do business throughout the world.

Integrally linked to this is the rise in the global economic importance of the Asia Pacific region. It has emerged as an immensely significant and influential market with a great appetite for consumer goods, capital equipment, financing and infrastructure.

One of the rare qualities that distinguishes a true leader from a run-of-the-mill lieutenant is the ability to set the major priorities, find the necessary resources for the job and make the difficult strategic decisions that can only be made at the top.

In that spirit, I encourage you to make an early executive decision to enjoy some of the delights that the Cairns region has to offer, in addition, of course, to your more formal conference deliberations.