Media release – 24/03/17

Ride digital wave to city’s future

Ride digital wave to city’s future by Martine Letts

Published in the Herald Sun Business

The opening in Melbourne last month of Chinese e-commerce giant Alibaba’s Australia-New Zealand HQ is great news for the city and a vote of confidence in the economy.

Alibaba’s move to Melbourne will help cement its reputation as Australia’s leading business hub for digital technology.

The Chinese e-commerce giant joins a slew of tech companies to make the city their home, including Zendesk, Slack, Square, Hired, Stripe and GoPro. Days later, the world's fourth biggest logistics company, CEVA Logistics, made Truganina its Australasian headquarters.

However, this is no time to rest on our laurels. We must intensify our efforts to ensure the “world’s most liveable city” becomes the Asia-Pacific headquarters for more major innovation-driven international companies.

As the traditional manufacturing industry winds down, Alibaba’s presence will foster innovation and drive the creation of highly skilled jobs.

Victoria’s tech industry now generates more than $34 billion in annual revenue and employs more than 91,000 people across the state. This number is primed to grow with demand for tech skills higher than ever before.

Melbourne accounts for more than 34 per cent of the nation’s technology and engineering graduates – this bodes well for the future. 

Alibaba will help local businesses share their products with billions of consumers around the world, including the world’s most sought after, the Chinese customer.

This is an opportunity for small and medium enterprises to leverage our “clean and green” reputation and “made in Australia” market advantage by capitalising on the growth of online sales in China and elsewhere in Southeast Asia.

With an estimated 688 million Chinese internet users spending more than $779 billion each year, Alibaba has the potential to become a global platform for Victoria’s network of SMEs.

That includes those operating in the services sector which, according to the Australian Bureau of Statistics, is the industry with the largest proportion of small businesses.

According to Sensis’ 2016 eBusiness report 34 per cent of SMEs used  e-commerce for the majority of their sales online, up three percentage points in the past year.

The growth potential companies such as Alibaba offer for SMEs that cannot afford their own marketing and distribution channels is significant …

Alibaba in turn benefits from being close to the source of premium Australian goods and services.

Alibaba’s memorandum of understanding with Melbourne–headquartered Australia Post should further trade opportunities for Australian businesses.

Melbourne has many other strengths which make it an attractive destination for investment.

The Port of Melbourne is the nation’s largest container port with exceptional connectivity to road and rail, low land side transport costs to and from its port and the largest number of break-bulk berths in Australia.

Melbourne Airport is a major air freight hub open for business around the clock. Its curfew-free status enables time-sensitive products to arrive in international markets the day after they leave Victoria. Soon retail giant Amazon will also be setting up its Australasian base, probably in Sydney. Forget the Melbourne-Sydney rivalry: two global retail platforms moving here is the beginning.

The Victorian Government has demonstrated its commitment to creating a supportive environment to attract businesses.

According to Crossborder Investment Monitor fDi Markets, Victoria ranks second in the Asia-Pacific for the number of greenfield software headquarters set up in the last six years, behind only Singapore and ahead of Hong Kong and Sydney.

Today we are competing with other cities in Asia-Pacific and beyond.

The disruption brought about by the  fourth industrial revolution transforms the way we work, live and do business.

Remember, the world’s largest taxi company, Uber, owns no cars; the world’s largest accommodation provider, Airbnb, owns no property and the world’s most valuable retailer, Alibaba, has no inventory.

The Committee for Melbourne’s newest flagship taskforce, MELBOURNE 4.0, aims to identify the right conditions to successfully ride the wave of the digital transformation of our economy.

We must work together to attract and keep the right people and businesses so we can continue to thrive.

Martine Letts is the Committee for Melbourne chief executive

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