Over the last four weeks I discussed some critical fundamentals to a flourishing city, including a vibrant lifestyle, buoyant economy, sustainable environment and fairness. This week I turn my focus to business growth, and what we have learnt about new market expansion and the role of market research since launching in 2004.

First published via my weekly LinkedIn newsletter with bonus content >

Australia is a small country with a high reliance on mining to ensure a luxurious trade surplus, yet independent analysis from Harvard Growth Lab illustrates we are slipping, unlike other comparative countries. We are reliant on our mining sector and comparatively underperforming on higher value complex export sectors.

Harvard Growth Lab has been tracking economic complexity, import / export and other data, across the world back to 1995. The Economic Complexity Index is a holistic measure of the productive capabilities of large economic systems, usually cities, regions, or countries.

From 1995 to 2021 the US moved from a ranking of 9th to 14th, and Australia moved from 55 to 93, China from 46 to 18, India from 60 to 42 and Japan remained in 1st position. According to the report …

“Australia is less complex than expected for its income level. As a result, its economy is projected to grow slowly.” (More >)

Australia’s exportation of minerals and other mining is continuing to grow while other sectors are flat to sluggish. Australia’s enviable trade surplus (exporting more than we import) is predominately from mining – Iron Ore, Coal, Petroleum Gas, Gold and Aluminium, with leading export markets China, Japan, South Korea, India and the United Kingdom. Without mining we’d be in a huge deficit.

The comparative countries noted above all have a greater prominence of ‘value-added’ exports from cars to medicine. Whereas Australia often re-imports value-added, higher priced, of our own raw exports from steel to refined petroleum.

It is interesting when comparing against other countries, less reliant on mining and low complexity exports, of the prominence of value added exports. Service exports are strong across the US, UK and India to name three examples. In a country proud of our cleverness Australia is less successful at exporting clever, more so lucky.

Without Australia’s mineral and mining exports we would, to coin a very Australian phrase, be ‘up shit creek without a paddle’ (NB: we actually imported this clever phrase from the US). Australia should be a net exporter of higher economic complexity products and services.  Hence the importance of technology, professional and other services. Doesn’t seem too clever otherwise for such a wealthy country.

Why didn’t we invest our golden soils better?

Over Square Holes’ close to two decades we have worked with many value-added businesses to grow interstate and overseas into global markets, from Australia to Africa, Asia, North and South America, Europe, and Oceania. Including measuring the market potential, prioritising market entry, pricing and brand and product refinement. Optimising new market entry prior to ramping sales. Reach out if you would like to discuss how we may be able to help.

Business growth, inspired by real people

Have a great Friday, and weekend,

Jason