The Eltham Rotary Club was regaled with a solid Crikey rave last night about corporate Australia’s woeful record and one thing that emerged was the differences between Australia and England when it comes to business and sport.
Sure, the Poms won the Rugby World Cup and might even trouble us in the forthcoming Ashes tour but generally we have been kicking their butts on the sporting field for the last 15 years, whether its at the Olympics, cricket, rugby, tennis or anything else you care to name that’s played outside the pub.
However, the same can’t be said for business as the Poms leave us for dead when it comes to building strong companies that compete successfully on the world stage.
The following sums up our problem. Australia doesn’t have a global pharmaceutical, energy and telco company to speak of whereas the Poms have Glaxo Smithkline, BP and Vodafone which are each worth more than $200 billion and together almost equal the entire value of the Australian listed company sector.
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And what about all the other sectors where Australia should but doesn’t have prosperous companies? As the world’s biggest island, where is our shipping company? The Brits have got P&O.
As a country of travellers with a huge tourism industry, where is our globally known hotel brand? The Poms have got Interncontinental, the world’s biggest hotel company with 3,500 different hotels either owned, leased or managed.
What about fast moving consumer goods? Save for wine and street wear, we don’t do well in this sector whereas the Poms have got British American Tobacco with a market capitalisation of $55 billion, Unilever worth $65 billion and Cadbury Schweppes worth $25 billion.
The really weird thing is that we export CEO talent such as Jac Nasser (Ford), Douglas Daft (Coke), Geoff Bible (Philip Morris), Charlie Bell (McDonald’s), Philip Bowman (Allied Domecq), Rod Eddington (BA) and Doug Flynn (Rentokil).
That list is as impressive as Australia’s record on the global sporting stage, but why can’t our companies do likewise? Here are some of the reasons thrown up by Crikey and last night’s audience of Rotarians:
Union power: the dead hand of inflexible labour markets prevents the creation of great global companies;
Leisure focus: as a nation our priority is on sport and leisure (no one gambles as much per capita as we do);
Punitive taxes: with close to the highest personal tax rates in the world, no wonder one million Australians work offshore;
Lack of entrepreneurial culture: since the 1980s, entrepreneurialism has had a bad name and too many Australians are risk-averse and just happy to keep working for the man;
Proximity to markets: we just don’t have the scale and proximity to markets to create national champions.
Have you got any other thoughts on why our companies, save for the likes of News Corp, Westfield and CSL, have not cut it on the global stage? Email [email protected] and let’s have a good debate.