Australia Government expert links football to trade

The Chief Economist of the Australian Trade Commission, Tim Harcourt, has calculated the impact of Australia's celebrated return to the FIFA World Cup finals this year. "The Socceroos reflect the cultural diversity of Australia and actually highlight the important links between soccer, ethnicity and exports," he told Asian Football Business Review. "Austrade/Sensis research shows that successive generations of immigrants have set up successful exporting businesses, as well as playing and following soccer. The research reveals that a small and medium sized exporter is more likely to have an overseas born owner than a locally born one," he said. But how does the World Cup impact on exports and investment?

Firstly, let’s take the World Cup finals itself. Given its recent woes, the German economy needs a shot in the arm, although we must remember that Germany is still the world’s third largest economy, its largest exporter and the engine room of European manufacturing exports. Will the World Cup make a difference? According to Deutsche Bank, the Cup will boost spending by 5 billion euros and attract at least a million visitors to the country. Does this have any implications for Australia? There are 2,507 Australian companies exporting to Germany, which is the second most important European destination for Australian exporters after the UK. According to Rebecca Baring, Austrade’s Trade Commissioner in Frankfurt, Australian exporters have made successful in-roads into the larger consumer markets: “Australian businesses are doing well in markets such as food and beverage, IT, advanced manufacturing and professional services. But we could do more in manufacturing as Australia has the potential to be a key a supplier of components in German manufacturing supply chains.” On the investment side too, many larger Australian corporates have established themselves in the German market. Well known high profile companies like Amchor, Brambles, Cochlear, Qantas and Fosters are all there and Macquarie Infrastructure is looking to expand its European presence in the German utilities sector. The World Cup may be an opportunity for more Australian businesses to think about Germany again.

Secondly, after the World Cup is over, there’s plenty more to look forward to. Economically speaking, perhaps a more significant development is the Socceroos’ entry into the Asian Football Confederation. Australian football’s recent success in joining the AFC provides Australia with a real chance to build some Australian-Asian sporting tradition and to generate spin-offs for trade and business in the region. According to the Lowy Institute’s Anthony Bubalo, AFC membership means that, for the first time, Australia will have a significant, on-going sporting relationship with a large number of Asian countries: “Between 2006 and 2009, the Australian national side will play at least 18 full competition home and away matches against other Asian sides. As well as matches, there’s sponsorship, media and TV rights, and of course, travel and tourism in the region. Australia has a real opportunity to economically benefit from its new footballing ties with Asia”.

Thirdly, there are the business spin-offs from sport itself. It has happened at the Sydney Olympics, the Rugby World Cup in 2003, and more recently at the Commonwealth Games. Schmoozing around sporting events can bring real business benefits. Business Club Australia, a sports business networking programme developed by Austrade for the Sydney Olympics, generated $1.2 billion in business deals at those games, around $425 million at the Rugby World Cup, and, even though its early days, $930,000 from the Melbourne Commonwealth Games.
Harcourt has concluded that Australian sporting expertise (and related expertise in event management) has become a ‘knowledge export’ on its own terms. "Moreover, the Beijing Olympics and London Olympics bids are leveraging skill and experience developed by Australia during Sydney 2000," he said.

See also: Australia takes Asia to five in 2006 World Cup finals (17 Nov 05)