Leveraging talent in people-to-people ecosystem to amplify trade growth

Ghian TjandaputraEngagement Coordinator

The Australia-Indonesia Centre

IABC ConferenceDenpasar, 5 November 2019

2

Bilateral trade volume has been growing slowly

Leveraging talent in people-to-people ecosystem to amplify trade growth / The challenge

Rank 2013 2018 5-year CAGR

1 China 143,645 214,860 8.39%2 Japan 71,045 85,776 3.84%3 United States 57,038 73,859 5.30%4 Republic of Korea 32,871 40,864 4.45%5 Singapore 27,328 32,223 3.35%6 India 15,684 30,461 14.20%7 New Zealand 22,437 29,255 5.45%8 United Kingdom 21,803 26,938 4.32%9 Thailand 20,110 25,714 5.04%10 Malaysia 18,577 24,061 5.31%11 Germany 17,299 23,261 6.10%12 Hong Kong (SAR of China) 16,502 17,823 1.55%13 Taiwan 12,473 17,665 7.21%14 Indonesia 15,441 17,570 2.62%15 Vietnam 8,122 14,568 12.40%

(Source: DFAT, July 2019)

Australia's top 15 trade partners 2018 (in $million)

3

Indonesia risks falling even further behind

Rank 2018 2023 2018 Rank

1 China 214,860 321,442 No change2 Japan 85,776 103,559 No change3 United States 73,859 95,619 No change4 India 40,864 59,166 Up 25 Republic of Korea 32,223 50,802 Down 16 New Zealand 30,461 38,144 Up 17 Singapore 29,255 37,994 Down 28 United Kingdom 26,938 33,282 No change9 Thailand 25,714 32,881 No change10 Germany 24,061 31,276 Up 111 Malaysia 23,261 31,165 Down 112 Vietnam 17,823 26,135 Up 213 Taiwan 17,665 25,020 No change14 Hong Kong (SAR of China) 17,823 20,363 Down 115 Indonesia 17,570 19,996 Down 1

Australia’s projected top 15 trade partners in 2023 based on 5-year CAGR (in $million)

Leveraging talent in people-to-people ecosystem to amplify trade growth / The challenge

4

Two approaches to amplify trade growth

Growing trade volume

Boost sustaining sectors

Mining

Agribusiness

Education and training

Tourism

Unlock new scalable sectors Digital platforms

Leveraging talent in people-to-people ecosystem to amplify trade growth / The solutions

5

Younger Indonesians key to escaping middle income trap

Total dependency ratio(ratio of population aged 0-14 and 65+ per 100 population 15-64)

(Source: UN World Population Prospects 2019)

“Indonesia needs to add58 million skilled workers by 2030 to become 7th largest economy.”

54.8

53.1

51.0

48.9

47.5 47.7 47.7

48.9

50.7

52.6

42.0

44.0

46.0

48.0

50.0

52.0

54.0

56.0

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045

Leveraging talent in people-to-people ecosystem to amplify trade growth / The case

Growing prosperity would lift trade with Australia Second-term Priority

6

Younger Australians are more likely to be open to doing business with Indonesians

All 18-34 Net differenceTrustworthy 22% agree, 33% disagree

(-11)27% agree, 26% disagree(+1)

+12

Fair 14% agree, 44% disagree(-30)

21% agree, 32% disagree(-11)

+19

Prosperous 16% agree, 37% disagree(-19)

20% agree, 31% disagree(-11)

+8

Strong economy 18% agree, 34% disagree(-16)

21% agree, 32% disagree(-11)

+5

Australian business people can be confident when conducting business with Indonesia

22% agree, 26% disagree(-4)

30% agree, 18% disagree(+12)

(Source: The Australia-Indonesia Centre Perceptions Report, 2016)

Leveraging talent in people-to-people ecosystem to amplify trade growth / The case

7

Leveraging Asia skills would boost revenue

“Australian businesses that always mention Asian language capabilities or experience in Asia in job advertisements earn, on average, 5 times more revenuefrom Asian markets than those that never mention these skills.”

• “Sophisticated knowledge and experience of Asian markets/environments

• Extensive experience operating in Asia

• Long-term trusted Asian relationships

• Ability to adapt behaviour to Asian cultural contexts

• Capacity to deal with government

• Useful level of language proficiency”

(Source: Asialink Business Activating Asia Report, 2019)

Asialink Business survey shows pathway to amplify trade growth.

Leveraging talent in people-to-people ecosystem to amplify trade growth / The case

8

Next steps to leverage talent of young peopleShort-term:

Engage people-to-people ecosystem in

key activities promoting trade

Medium-term:Create cohort of IA-CEPA champions

Long-term:Develop skills most in

demand by leading and growth sectors

Leveraging talent in people-to-people ecosystem to amplify trade growth / Next steps

9

Engage people-to-people ecosystem in key activities

How young people can amplify trade growth / Next steps

Ecosystem is significant and potential yet to fully captured

Australia Awards Indonesia

>9,500

NAILA>40 AIC

428

AIYA515

CAUSINDY181 New Colombo

Plan7,619

PPIA>700

BRIDGE756

ACICIS>3,000

AIYEP>1,300

Hamer47

10

Create cohort of IA-CEPA champions to translate benefits to communities

How young people can amplify trade growth / Next steps

“IA-CEPA also serves as a platform to improve economic relations through the establishment of a wide range of consultation mechanisms. These make IA-CEPA a ‘living agreement’.”

(Source: Perth USAsia Centre Report – A New Platform for Deepening Economic Ties, 2019)

Working Holiday visa

• 4,100-5,000 places in next 1-6 years

• e.g. Internships for visa holders

Economic Cooperation

Program• New framework to

support implementation

• e.g. Consultations in program design & delivery

Skills Exchange Project

• Reciprocal in-country 6-month work training experience

• e.g. Pre-departure, post-program engagement

Free Trade Agreement seminars

• Roadshow to promote FTAs

• e.g. Invite to panel to share Indonesia insights

11

Develop skills relevant to primary and growth sectors

How young people can amplify trade growth / Next steps

Australian education and training providers can partner with enterprises and startups to upskill their workers

Technical/Specialist

Industry 4.0 Critical

Leverage talent in people-to-people ecosystem

to grow bilateral trade and

translate benefits to communities

Ghian TjandaputraEngagement Coordinator

The Australia-Indonesia Centre

Ghian.Tjandaputra@australiaindonesiacentre.orghttps://www.linkedin.com/in/ghian/