In recent years I have spent a lot of time addressing boardroom lunches and corporate roundtables about how changes in Australia’s international environment are likely to affect business. It is easy topic on which to engage people. There is a lot of interesting – and some frightening – stuff happening in the world.
Speaking at these events often left me wondering about how much my description of the big changes taking place in the world really shifted the way that people thought about their business. I suspect that, more often than not, it was a case of, “well that was interesting, now back to work”.
Of course, many Australian organisations have profited enormously from the major global economic changes of recent decades – what we often lump into the category of globalisation. But even those organisations that have adapted well to globalisation, will be challenged by some of the changes we are now witnessing.
Take China for example. For decades we marvelled at – and profited from – its enormous economic transformation. It was a change that lifted millions out of poverty and spread new wealth across the globe. But now China is changing again, and in less benign ways, as it translates its economic wealth into military power and a more assertive attitude.
Beijing is no longer hiding its strength and biding its time. For Australia this means that managing our relationship with China has become much trickier. We have to maintain our enormously profitable economic relationship with China, while at the same time being firm in defending our strategic and national security interests.
This also means that old division of labour between our national security community and our business community is no longer looking so neat. It is no longer possible for one to simply focus on keeping us safe while the other works on making us wealthy.
More than ever, government, business, universities and not-for-profits will need to be co-producers of our security and our prosperity. For example, the way that we manage foreign, and especially Chinese investment, in our telecommunication sector and other parts of our critical national infrastructure will require close cooperation between government and business to ensure that commercial opportunities are grasped without comprising our national security. This is harder than it sounds.
As public altercations between some business leaders and government over China policy has shown, these communities seem more likely to talk across each other than to each other. Overcoming this will mean thinking creatively about new forums and mechanism for these conversations to take place on a regular basis. Only a sustained interaction will build trust and overcome some of the cultural difference, particularly between business and the national security community. While you won’t always be able to reconcile the interests of these communities, just getting them to talk more regularly and share information more freely will create a stronger foundation for cooperation.
Dealing with a more assertive China is, however, just the first of several new challenges we face. Xenophobic nationalism and economic protectionism around the world threaten the massive and mostly positive increase in the free flow of goods, people and ideas that has been at the core of globalisation. These forces are also undermining the willingness and ability of countries to cooperate to tackle other existing big global problems such as climate change, irregular people movement, terrorism and cyber-crime.
For a university, for whom globalisation has delivered new students, or a medium-sized business for whom it has opened new markets, nationalism and protectionism are direct, and in some cases, existential, threats.
These and other changes mean that organisations will need to become more articulate and sophisticated participants in the national conversation on public and foreign policy. They will need to reshape their organisations and business models to make them more resilient and adaptable. And all of this will need to be thought through very carefully, even as some of the changes they are responding to are still playing out. If they aren’t already, businesses should be setting aside a little strategic thinking time to determine precisely which of these emerging global trends will influence their business and how they should be reshaping their strategy in response.
In recent years Australian organisations have been pretty good at adapting to and exploiting global transformation and new trends. But given what is happening in the world today, it is safe to assume that many will be learning once again that a changing world changes everything – and this time not always in positive or profitable ways.
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Written by Anthony Bubalo, Principal - Nous Group