For 200 years Australia has utilised foreign investment to develop its economic potential. However, as a mature economy, and with the end of the mining boom, outbound business investment will play an increasingly important role in the nation’s economic growth.
While there is considerable interest about inbound investment into Australia, the nature of the country’s outbound investment has received less attention. However, Australian businesses investment abroad can benefit these companies by exposing them to international markets, create high skilled jobs in Australia, integrate Australia in global value chains and increase the nation’s engagement with the region, contributing to economic growth.
With global economic growth increasingly being generated by developing economies, and the IMF describing the anaemic economic growth in the developed world as ‘the new mediocre,’ the importance of Asia’s economies has never been greater.
Internationalisation, through investment in offshore facilities, has received domestic criticism for shifting operational jobs out of Australia. However, such a shift could be vital for preserving remaining jobs and creating new roles in the domestic economy; and may also help companies to develop economies of scale or achieve logistics cost reductions.