NOT MADE IN BANGLADESH
The great success of overseas retailing juggernauts rolling out flagship stores in Australia have been hailed as a bright spot in an otherwise decimated Australian retail climate. Zahra, Top Shop and Gap have all received huge attention in the media for their Australian ventures. Most particularly the accolades of the business press. These mass market retailers have been widely praised for their fast fashion business models. We hear they are tapping in to Australia’s appetite for on-trend, disposable fashion. But are they giving dozy local retailers a shake up as we hear or will this new trend simply destroy the fundamentally delicate balance of small hard working independent retailers that are mostly hanging on to their life work for grim death through no fault of their own. It is always disheartening to see how many column inches are given over to lambast Australian retail for failing to adopt Northern Hemisphere best practices and as e-commerce laggards. The authors almost exclusively compare retail statistics without any critical analysis or understanding of the local environment and the unique factors that effected retailing in Australia. That however is an entire article on its own. One on which I could write screeds and probably will. For now back to the foreign corporate retail invasion.
These giant International retailers have a number of clear competitive advantages over local retailers, whether they are Dorothy’s Designer Dresses or David Jones. Operating globally provides these Companies economies of scale which can be used to bring products to Australia at the lowest price possible. Sounds reasonable but strip back that veil and those practices can quite easily be seen for what they really are and for the discomfort the underlying practices rightly should bring to our Western sensibilities.
Globalisation was once touted as the ultimate efficiency of the free market to find the natural advantage of each Country and ultimately bring about the geographical redistribution of labour, resources, equipment and capital where it will find its greatest efficiencies. Of course that highly theoretical model of perfect economics has little real credibility outside of university campuses. Much like the experimentation with Communism. Sounded great in theory but where has it actually been proved to work? Certainly not the rampantly capitalist China, Russia hung on for grim death, Cuba – you can’t fund an economy on the sale of cigars and, now really – that whacky North Korea – it’s not exactly a beacon of the Communist model now is it?. So Wikipedia it: Communism – nice theoretical model but it just doesn’t work.
So the real world is essentially based on Capitalism peppered here and there with social experimentation. In this world dedicated to gain and betterment Globalisation simply means large corporates have free licence to seek out the cheapest source of any product, service or resource they require and will leverage their economic power to exploit the most advantageous outcome for their bottom line. This may take the form of ignoring violations of human rights for a cheap source of labour, by-passing obstructive environmental law, legally side stepping the unpleasantness of tax regimes, or even enjoying the welcoming benevolence of Governments who will over subsidies foreign investment by potential employers. Of course the sheer size of some of these international corporates means the third world actively courts their business and will make considerable concessions in exchange for their financial patronage.
It’s not just the Third World that is prone to come under the spell of the Corporate Giant. We now read that the Government of the U.K. pays more to Amazon in Subsidies than the amount of tax the Company pays back to in that Country. Of course that is in part due to the elaborate cross boarder tax structures that allow that Company to legally pay very little tax at all anywhere in the world. Was this really what the voting public of the United Kingdom mandated David Cameron to do with the government coffers though?
As shocking as these practices may sound they continue because of the simply economic laws of supply and demand. Dubious corporate behaviour does not happen in a vacuum and for the most part it is not illegal. While there are consumers who are not just prepared to buy the resultant products but to queue in greedy anticipation for the latest release there remains strong economic motivation to perpetuate business models that are at complete odds with our personal ethics.
It is rather easy to collectively demand a higher standard of corporate conduct but are you prepared to make that vote with your wallet? Every purchasing decision we make has potentially profound consequences well beyond the effect on our household or personal budget. In Buddhist terms – if an illegally constructed factory collapses in Bangladesh and not one in the West hears it over the “ca-ching” of the cash register, did it really happen? Well not if it compromises the purchase of my gorgeous new Zahra blazer at $69.95. “Didn’t hear a thing”.
The appalling conditions of machinists in Mumbai are not likely to change while we, in countries like Australia, shop by price and ignore the “Made in………” lablelling. Factories will continue to collapse in Bangladesh if we turn our backs on our own Australian manufacturers. Small Australian Owned, Australian Made businesses will drift sideways or elect to do something more lucrative with their time and capital or just give up entirely without the ongoing support of our local shoppers.
Much of Australia’s nuvo poor is destined to come from the multidimensional pressures of unprecedented displacement brought about by globalisation. Will your job survive? Will your industry even exist in Australia in 5 years time? Not if it is in any way whatsoever related to making cars it won’t. But that is just the tip of the frenetic media iceberg. Rightly Hawke and Keating opened Australia up to the forces of the global economic winds but forget your future if someone in India can do your job cheaper and deliver service to an inbox overnight, a Pilipino is more adept than you at photo-shop, a young Serbian girl is better connected through social media to spread the word about your business that you ever will be able to or a Chinese factory can make an identical replica of your product delivered to your door in seven working days for half the price of your electricity bill. Into the Valley of death strode 10,000 men…. or 22 million men, women & children. Australia has drunkenly stumbled into the abyss of Globalisation while the effects go largely unnoticed by a population who are busily distracted booking their next holiday in Bali. “We stay at the same resort each year so we no longer use a travel agent. We book it all on-line”.
The future for Australia will not just be shaped by international competition and the roller coaster supply chain of iron ore to China. Technology is overtaking many traditional businesses which will go the way of the 1 hour Photo Shops (note – not the software – remember those quaint old 35mm rolls of film). How quickly will we forget which building the local Video Store used to be in. “Was it that shop next to that Fruit & Veg store near the lights?”. It only took a couple of years before the relevance of the name went the way of the Dodo. Somehow the DVD Store or the Blue Ray Store never took hold.
Technology and most particularly the internet will continue to bring a staggering array of options right to our fingertips. As Australians we love that. We have always been early adopters back from fax machines, VCR’s and mobile phones.
How many of the choices we make will enhance our constantly connected personal lives to the absolute detriment of Australian business and Australian jobs. We all grasp our wallet more tightly than ever before but we are also better informed and educated about our choices than at any other time. The only given is change and change is happening exponentially. Don’t lament the passing of your favourite local small businesses after they have gone because it might just disappear overnight. Choose to support them now so they can continue to serve you tomorrow. Get out from behind your screen and walk up to your local shopping strip. Buy Australian Made Australian Owned when the choice is there.