Cultural understanding barrier to Australia's Asian expansion: study

Australian companies looking to capitalize on the recently signed free trade agreements need to do their homework as new research from the University of Sydney ( USYD) reveals the country's poor knowledge of Asia's various business culture is hindering growth.

A survey of over 1,200 businesses, released on Tuesday, found over 80 percent of Australian businesses active in foreign markets are hoping to expand into new countries in the next two years, with strong growth prospects and a weak Aussie dollar making a number of countries an attractive option for expansion, study co- author USYD Professor Sid Gray told local media.

However, participants identified India, Indonesia and China as the most difficult to do so sighting differences in language, culture and business practices as the most significant barriers to further international business development.

"If you go into Japan or China, you need to understand how to develop relationships there," Gray said. "With them, it takes a lot longer to build those relationships so you've got to work at that. You can't just fly in and fly out and expect to do business - - it's a longer term process."

"The companies who tend to be successful have invested the time and effort into learning about their potential markets and business partners."

This research follows warnings from senior business leaders at the Boao Forum for Asia (BFA) conference in Sydney in July that Australia will be hindered in economic growth if it did not address a lack of education and cultural understanding of the Asian region.

Price Waterhouse Coopers Deals and Asia Practice Leader Andrew Parker told delegates at the BFA conference that his clients who are delivering services across national boarders are requiring global insights, however, those services must be delivered in a locally sensitive way.

"That really then speaks to the issue of talent, where do you get that talent, how do you train that talent, what kind of talent do you need," Parker said.

"Diversity is such an important issue... (Australia) is behind on our language capability, language studies in our schools... and we need to do something about that."

It is not necessarily a government issue, but a business decision to entice Australia's younger generations to undertake the required education to guarantee a career, Parker added. Endi