Global Connections: Multinational Companies in Sydney
25 Feb 2009
The Australian Business Foundation today launched its latest research project, “Global Connections – a study of multinational companies in Sydney”, to examine Sydney’s importance to multinational companies.
The Australian Business Foundation report undertaken by Enright, Scott and Associates, analyses the role Sydney plays in the strategies, organisation and location decisions of multinational companies.“Sydney is the site of high value managerial activities for foreign multinationals in sales, marketing, customer service, but does not have significant production or research and development functions,” said Narelle Kennedy, Chief Executive of the Australian Business Foundation.
The research is based on an assessment of survey data from 85 multinational companies based in Sydney. The study investigated the importance of Sydney grouped into seven functions, namely: Corporate Coordination; Central Management Functions; Finance and Accounting; Sales, Marketing and Customer Service; Distributional Activities; Production Activities; and Research and Development.
“Foreign multinationals located in Sydney are generally self-sufficient and largely stand-alone, essentially local implementers, rather than regional or global innovators for their parent companies,” Ms Kennedy said.
“The study also suggests that the global economic crisis will affect the operations of multinationals with cutbacks in Sydney and the Asia-Pacific.
“Urgent action is needed to revitalise investment promotion initiatives and to ramp up connections and collaborations between Sydney operations of multinationals and local organisations.
“The report also found that the Sydney offices of multinationals generally have little control or autonomy over operations in the Asia Pacific region, but mostly they oversee Australia and New Zealand.
“Sydney offices of multinationals are only moderate contributors in terms of decision-making; knowledge generation and application; management and product and service development for their global multinational parent.
“Sydney offices are not seen as major independent contributors to the design or development of products, services or processes for use internationally. Instead, they tend to develop products and services for the local market.
“While self-sufficient in generating and using knowledge from operating locally, Sydney offices are not well ‘plugged in’ to knowledge sources elsewhere.
“The study found Sydney offices worked most closely with local industry organisations and associations, while fewer connections were reported with other Sydney-based entities.
“The least collaboration was reported with public research institutes and universities.
“There is a twin imperative for action from this study. Firstly, revitalise investment promotion initiatives so they better reflect and build on the activities and skills revealed as Sydney’s strengths with multinational companies. Secondly, and perhaps more importantly, Sydney’s multinationals need to be better plugged into local and international business and knowledge networks.
“There needs to be opportunities for greater engagement and collaborative activities between local organisations and the Sydney offices of multinationals, so that they are embedded more closely in a web of enterprise, bringing with it new global and regional connections for Sydney, particularly in these turbulent times.
“Few if any of the potential impacts of the present global economic crisis on multinational companies are likely to be positive for Sydney,” Ms Kennedy concluded.
For further information, contact:
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Clint McGilvray
Manager External Relations
Australian Business Foundation
Phone: +61 2 9458 7016
Mobile: +61 413 285 186
Fax: +61 2 9929 0193
Email: clint.mcgilvray@abfoundation.com.au
