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NEW FOCUS NEEDED ON GOVERNMENT POLICY FOR INWARD INVESTMENT PROGRAMS

23 Jan 2002
The findings from independent think tank Australian Business Foundation's latest report, Friend or Foe Leveraging Foreign Multinationals in the Australian Economy, have implications for current Federal and State inward industry investment programs.

The findings from independent think tank Australian Business Foundation's latest report, Friend or Foe Leveraging Foreign Multinationals in the Australian Economy, have implications for current Federal and State inward industry investment programs.

"The report enables Government and business to better understand how multinationals interact with local firms, beyond the usual economic measures of direct investment and employment, highlighting how Australia can boost capabilities and global competitiveness," said Ms Narelle Kennedy, Chief Executive, Australian Business Foundation.

The report's author, Dr Lyndal Thorburn, believes government and business can leverage more from foreign multinationals than presently and must develop focused strategies to increase skills, create long term benefits and become global players.

"Industry policy must focus on expanding the number and significance of multinational centres of excellence to boost knowledge-intensive multinational activity, rather than regional headquarters which can be subject to arbitrary decisions concerning location," said Dr Thorburn.

Centres of excellence develop new products and services for the global firm, are much more significant and are more anchored in Australia as they emphasise technology development and draw on external services

"In order to attract long term investment, Australia's focus should be on promoting national business, cultural and other characteristics that offer real, sector-specific business benefits for incoming firms. Australia must move beyond promoting "natural" benefits such as Asian time zone or English language, as these do not provide cogent reasons for multinationals to locate in Australia rather than in Singapore or Hong Kong," said Dr Thorburn.

The study was conducted during the first half of 2001 and was based on interviews with 30 foreign multinationals and a written survey of 56 smaller suppliers who had both foreign multinational and Australian customers.

For further information contact:
The Australian Business Foundation on (02) 9458 7553 or www.abfoundation.com.au