By Ross B. Taylor
It was ironic. On the day that Toyota announced that its  Australian manufacturing plants would close in 2017, Indonesia announced that  its car and components industries are now ‘threatening’ to replace Thailand as  the biggest manufacturer in the region with Toyota and GMH committing to  increase their investment in our northern neighbour’s car  industry.
Yet even five years ago, and still today, if you were to ask most  Australians – including business people – to recall some words that they  associate with Indonesia the answer is almost stereotyped: Bali holidays, asylum  seekers and Schapelle Corby.
Ask a business person in Northern Asia, Singapore or Hong Kong and  the words to describe our next door neighbour would probably be different:  Opportunity; huge emerging middle class, partnerships in industry. Spot the  difference?
Indonesia is just one of the nations in our region that not only  have the ‘economies-of-scale’ to develop successful car and automotive  components industries but they also have the location, labour, and distribution  networks to access external markets.
What these countries didn’t have is what we, in Australia, are  very good at: Design, planning, technological development, creative marketing,  and component design and production plant development; the list goes  on.
In developing partnerships in countries such as Indonesia, most of  the ‘intellectual’ work could be done in Australia using internet technology,  whilst the low-skilled work could be undertaken in the partner’s country,  resulting in a win-win for both countries. Australia then builds increased work  opportunities in the skilled area of car manufacturing in a partnership  arrangement rather than trying to compete with these low cost Asian nations at  the assembly level.
Australian SME’s have already made this model work. Here are two  examples:
Fifteen years ago a company manufacturing display cabinets for  shops and cafes was finding it difficult with such a small market in WA. By  transferring their manufacturing to Indonesia in a partnership with a  well-respected local company, they were able to not only expand their operations  to include exports to some 25 countries, but were able to retain the highly  skilled areas of their business in Perth. Sure, WA lost some low-skilled jobs  initially due to the move to Indonesia, but then over the next ten years, as the  business doubled in size, the demand for design, technical and administrative  staff increased significantly.
 
And just ten years ago another Australian company who manufactures  (high labour) fishing equipment also found it was unable to compete with  countries such as China and was losing market share despite its good reputation  and ‘Brand Australia’ respect.
The company established a business in Indonesia, on an island near  Singapore. Today the company employs almost 100 staff and exports to over 30  countries. Initially this move to Indonesia caused pain for the employees and  company as it was Australian’s who were losing their jobs. But like their  ‘display cabinet’ friends, the company found itself increasing its skilled  workforce including designers, creative specialists, marketing, advertising, and  administration staff here in Australia. More skilled jobs for our country as  their market share and volumes ‘exploded’ from its now competitive cost base.  Another win-win of doing business in a Global  Village.
Our manufacturing industries, and also our agricultural sector,  are ideally placed to develop partnerships that use a combination of our highly  skilled workforce with our neighbours’ cheap labour, location,  economies-of-scale and access to markets to create highly successful businesses  as we enter the Asian Century.
Australia is a smart, clever country but our dogma and ‘navel  gazing’ has cost us dearly in terms of accessing opportunities in our region.  Indonesia will add 80 million people to the ranks of ‘middle class’ in the next  twenty-five years, with a population approaching 300 million. These people will  want to drive cars, need better towns (town planning), better health and  education and they will want to eat better and fresher food.  
Yet people such as former Labor leader Mark Latham wrote recently  in The Australian Financial Review,  “Indonesia is only a two-bit player..and  should be kept at arm’s length”. It is this type of ignorant and  ill-informed comment that harms our national psychic and inhibits us from  engaging in partnerships within our fast-growing region. And we now pay the  terrible price for such small thinking.
So as the 2,500 workers from Toyota, and the thousands of people  employed in the components industry, head-off to Centrelink to seek a new start  in life, we should look to countries such as Indonesia that offer enormous  opportunities for those who are far-sighted.
In the meantime, at least there is one consolation to ease the  pain we all currently feel on behalf of our automotive workers:  
At least we stopped the  boats.
Ross is the President and founder of the Indonesia Institute.