OVER the past few weeks the Business Council of Australia – the mouthpiece for the big end of town – has been “rattling the bars” over Australia’s apparent slide into branch office economy status.
OVER the past few weeks the Business Council of Australia – the mouthpiece for the big end of town – has been “rattling the bars” over Australia’s apparent slide into branch office economy status.
Their comments follow hard on the heals of talk of a brain drain of our best and brightest and the departure of a growing number of Australia’s corporates overseas.
These companies have responded to the call to globalise their operations and after establishing themselves offshore, having some success, find the balance of their income quickly shifts so the majority is earned elsewhere.
It doesn’t take long before the choice for senior management is to spend their lives living out of a suitcase or move. According to one report last year as many as 60 “Australian” companies now have their HQs overseas.
When the National Australia Bank raised the possibility of moving its head office to the UK, the government took the news seriously enough to ask Treasury to do the numbers on just what that might mean. The answer came back that well over $1 billion a year would be lost to the economy.
So what does this trend mean for WA?
And are any alarm bells sounding here?
In all the discussion about globalisation and the opening up of markets, this effect is referred to as “hollowing out”; gutted might be a better term for it.
It basically means the removal or downgrading of services by organisations (public and private) as they restructure in response to competitive pressures. There has been plenty of attention given to this happening in the bush but what about in Perth?
We would all know of examples over the last decade. One of Australia’s largest companies restructured its WA operations about five years ago scrapping its 17 most senior locally-based executives and replacing them with four.
It is a pattern that has been repeated in numerous companies around the city. It means the WA operation loses autonomy as responsibility is pulled back to head office and – far more importantly – the range of positions where people can gain managerial experience are being slashed.
A young WA woman who graduated from university here about five years ago and has recently returned said her contact book of friends from her campus days was now virtually useless as all but a handful had left town.
Just as it has long been the case that the smart and ambitious kids growing up in a country town would leave as soon as they had finished high school, the same pattern is beginning to develop in Perth once they have graduated from university.
In a global knowledge economy this pattern means we are losing our most valuable asset. Which is not to say that these young graduates should be discouraged from going - getting outside exp-erience and networks is invaluable – but what is there to encourage them back?
With all the emphasis that has been justifiably given to these issues in the bush, maybe it’s time to also look at what hollowing is happening in Perth and what it means.
If the boardrooms of Martin Place and Collins Street are starting to ask these questions, maybe it’s time to do the same here.
n Peter Morris is Principal of Telesis Communications, a technology strategy consultancy firm.
Their comments follow hard on the heals of talk of a brain drain of our best and brightest and the departure of a growing number of Australia’s corporates overseas.
These companies have responded to the call to globalise their operations and after establishing themselves offshore, having some success, find the balance of their income quickly shifts so the majority is earned elsewhere.
It doesn’t take long before the choice for senior management is to spend their lives living out of a suitcase or move. According to one report last year as many as 60 “Australian” companies now have their HQs overseas.
When the National Australia Bank raised the possibility of moving its head office to the UK, the government took the news seriously enough to ask Treasury to do the numbers on just what that might mean. The answer came back that well over $1 billion a year would be lost to the economy.
So what does this trend mean for WA?
And are any alarm bells sounding here?
In all the discussion about globalisation and the opening up of markets, this effect is referred to as “hollowing out”; gutted might be a better term for it.
It basically means the removal or downgrading of services by organisations (public and private) as they restructure in response to competitive pressures. There has been plenty of attention given to this happening in the bush but what about in Perth?
We would all know of examples over the last decade. One of Australia’s largest companies restructured its WA operations about five years ago scrapping its 17 most senior locally-based executives and replacing them with four.
It is a pattern that has been repeated in numerous companies around the city. It means the WA operation loses autonomy as responsibility is pulled back to head office and – far more importantly – the range of positions where people can gain managerial experience are being slashed.
A young WA woman who graduated from university here about five years ago and has recently returned said her contact book of friends from her campus days was now virtually useless as all but a handful had left town.
Just as it has long been the case that the smart and ambitious kids growing up in a country town would leave as soon as they had finished high school, the same pattern is beginning to develop in Perth once they have graduated from university.
In a global knowledge economy this pattern means we are losing our most valuable asset. Which is not to say that these young graduates should be discouraged from going - getting outside exp-erience and networks is invaluable – but what is there to encourage them back?
With all the emphasis that has been justifiably given to these issues in the bush, maybe it’s time to also look at what hollowing is happening in Perth and what it means.
If the boardrooms of Martin Place and Collins Street are starting to ask these questions, maybe it’s time to do the same here.
n Peter Morris is Principal of Telesis Communications, a technology strategy consultancy firm.
