Issue No. 30 - August/September 2006
Right problems, but do we have the right answers?
by Penelope Herbert
In my view the role of any government, be it state, local or federal, is to create and encourage an environment under which business can prosper and export, but I have some reservations regarding the capability of the state to contribute to the goal.
Rowan is right on target in putting much emphasis on the need to diversify the export base. But who is ever going to do it? Historically the economic base of SA has been wine, cars, grains, minerals and metals. All of these remain key products today.
Rowan wisely points out that the export of services must play a key role. Diversifying SA's export base is an excellent aspiration for the State but a difficult one to achieve, particularly if the Government has a hands-off attitude to individual businesses. I have a suggestion here regarding the slowdown in motor vehicle exports. Iran is a market waiting to be tapped and there is no USA competition. I must point out this idea comes from Austrade's Senior Trade Commissioner in Dubai.
Economies of scale bring wonderful advantages to producers. In my constant calls on businesses I have found a very large number of aspirants seeking to go down the export path before they have even checked out opportunities down their own footpath.
Rather than looking overseas, economies of scale could often be achieved by selling a whole lot more here in Australia.
While I agree with Rowan's views on identifying market barriers and gathering market...