By Grant Hall, Founder of League Cultural Diplomacy
The current federal Abbott–Turnbull Government in my home country of Australia are prone to botching up pretty much everything, and have caused a great deal of harm to the nation’s arts and cultural industries since they were elected in 2013.
The arts funding crisis they’ve created means that many arts organisations are assessing whether to continue with diminished capacities or even cease operations altogether. This is very distressing for those of us (a great many voters) who believe that the arts has an important role to play in building a vibrant, prosperous and secure society, where creativity is valued and people get along.
In the new reality of massive funding shortfalls and the prospect of closure becoming more of an imminent reality for numerous Aussie arts organisations there are many things which they can do to ensure their survival.
One suggestion I would like to offer is that arts organisations should consider doing what other businesses often do to survive or find success: go off-shore.
Competitive advantage is the key to business success and Aussie businesses have long looked overseas to gain it.
It’s achieved by increasing the willingness to pay for a product and reducing the costs of making that product whilst maintaining the desired quality.
When a business off-shores its operations, relocating itself away from its original country, it usually does so to gain competitive advantage.
Take for example my friend’s business, an Australian company that makes marble cutting equipment. With a population of about 20 million people, the market for marble cutting equipment in Australia is small, but my friend’s business is based in Vietnam where there are 90 million people with easier access to the lucrative Chinese and Indian markets that have a combined population approaching 3 billion. It’s much more efficient to operate such a business from Vietnam where costs are generally much lower across the board than in Australia and where the exporting of heavy equipment by land to India and China is less expensive than it is from Australia by air or sea.
Let’s say your Australian arts organisation did the same thing and relocated entirely to an Asian base. Your organisation would similarly benefit from the increased ability to access larger markets whilst greatly reducing costs. In other words, whether you’re performing artists, visual arts presenters or book publishers, you will find much bigger audiences for your products at a much lower cost to which you are accustomed in Australia.
Not only that, your artistic product will improve as a result of engaging with increased international competition, it will be simpler and less expensive to tour internationally, your global profile will be raised and you will be able to conduct transnational artistic and business collaborations with greater ease.
Even if complete relocation is out of the question for your organisation you can still access reduced costs through outsourcing or offshoring parts of your operations. For example, many small Australian businesses have assistants based in India, costing them less than a third of what it would to hire an assistant in their Australian office. The idea is to list each part of your business operations, work out which parts you can do more efficiently abroad, and then outsource or off-shore that area of work accordingly.
It’s not really as easy as it sounds, but there are intermediaries, like me, who can help you to do this and it’s not as expensive or as difficult as you may think. I’ve written more about this in International competitive advantage and the Australian wine industry, which also provides links to some good international strategies.
Through my work in the arts and from the many years I’ve spent living in Asia, I often hear many excuses about why Australian arts organisations shouldn’t bother trying to find success in Asia. Let me tell you that most of the so called “reasons” I’ve been given are a load of rubbish, or at least ten years out-of-date! These excuses are running thin, and it’s something that I wrote about in Australia-Vietnam relations. Building trade, social capital and security through culture in Asia.
Individual artists and writers have routinely and willingly relocated to places where they can afford to work on their creations and businesses across Australia outsource their work abroad as a matter of course, yet arts organisations rarely do.
I’m sympathetic to the reasons why this is the case; arts organisations are often community based and seek to improve the lives of Australians, and keeping jobs in Australia is seen to be an essential part of that. The idea of relocating abroad or offshoring jobs is uncomfortable for many in the arts industry, including myself, but in the current adapt or die environment that many Australian arts organisations find themselves in, doing so can present a path to survival, or even large scale international success.
I relocated my business, League Cultural Diplomacy (LCD) from Australia to Vietnam in 2014 and I have experience in outsourcing work abroad. If your arts organisation would like to find out more about how it can offshore some or all of its activities, please click here to arrange a 1 hour, complimentary consulting session.
Click here for more posts about the Australian arts industry or here for more posts about international business strategy.
photo credit: C-GHKR Air Canada Airbus A330-343 via photopin (license)
2 Comments Add yours
I’m interested to hear your thoughts on this but am not convinced these ideas are practical for the Australian Performing Arts. You have identified an important issue, that local labour costs are prohibitively expensive and the key reason that the Performing Arts need subsidy to exist. There is an old argument that remains true; there are no efficiencies to be found when performing a symphony or a play. If it took 3 hours and 20 people 100 years ago, it still takes 3 hours and the same number of bodies rehearsed to appear on stage. Of course the market forces efficiencies and the rise in solo performance is partly due to economic constraints but these shows tend to attract fewer people.
The ‘lets all move to Asia’ argument undermines a locally based cultural sector both in Australia but also in whichever Asian country you choose to land in. And chances are that exploiting the low costs there means you are relying on living and working conditions that are unacceptable by Australian standards. Furthermore this behaviour extends the arm of colonialism that Australia is still trying to reconcile itself with. We need to start thinking more creatively about how to value the Arts in Australia and readjust the local economy to reflect that value and artists leaving the country is unlikely to strengthen our culture.
Thanks for your thoughts which I agree with. These ideas certainly aren’t practical for all organisations, but what are organisations to do if they can’t access subsidy and only have a few months of cash reserves on hand?