Some Basic Cultural Differences Between Australia and other Countries (especially USA)


Australia is one of the wealthiest countries (per capita basis) in the world (Aaron Patrick 2019). This has been attributed to the success of its resource industries, ie mining (minerals, metals, gases, coal, etc), agriculture (wheat, meat, wool, cotton, etc), etc and more recently service industries like tourism and education. On the other hand, there is a lack of industrial, manufacturing, service, etc base that require agility and creativity. In fact, Australia has been referred to

"...little more than a quarry and a beach..."

Stephen Anthony as quoted by Aaron Patrick 2019

"...We're the opposite of economically agile. Our economy is too simple. And inch deep and a mile wide..."

Andrew Leunig as quoted by Aaron Patrick 2019

" long can Australia maintain a First World lifestyle with a Third World industrial structure..."

Roy Green as quoted by Aaron Patrick 2019

"...The Hausmann analysis polls identified countries that make complex products grow more quickly than those that don't. Harvard predicts the Australian economy will expand 2.2% a year for the next 10 years, placing it among the most sluggish of developed economies..."

Aaron Patrick 2019

Even though you can prosper by making a few essential products extremely efficiently, the narrow economies are exposed to an unexpected loss of one, like coal.

Australia needs to transform its huge basic-resource industries into the exporters of manufactured, value-added goods and services. The Covid-19 pandemic (starting in 2020) has further highlighted the need for this transformation.

In summary - Australia is different with its small population density, lack of arable land, small market size that is geographically disbursed, distance from world markets and high labour costs.

Some rationale for thinking why Australia can never compete against the tech giants of USA and China 

"...the nation's small size and talent pool, limited availability of venture capital, a cultural fear of failure and the lack of a burning platform are often cited as key reasons..." 

Yolanda Redrup et al, 2019 

In Australia, there is a strong tendency to follow overseas trends, especially USA management fads. Yet there are some important cultural differences which demonstrate that any "blind following" of what happens elsewhere is dangerous. Remember:

"...Australia now has one of the largest immigrant populations, relative to its overall population size......nearly 25 percent of Australians are foreign born ... If we consider both first and second generation Australians, the number rises to 44 percent..."

Tim Flannery, 2003

"... Walking around the streets of our big cities, most evident change is in the face of Australia. No comparable developed country has such a high percentage - 27% of its population was born outside its borders. For example, the United States is at 13%, Britain 11%, Canada 19.8%, France 5.8% and Germany 8.7%.

Fifty years ago about half of all migrants came from the British Isles and almost all from Europe, North America and New Zealand. Nowadays the largest source of migrants is from Asia - outnumbering those from Europe 3 to 1, with India and China providing a quarter of the new migrants over the past four years..."

Malcolm Turnbull, 2013

Australia was

"...One of the most protected, rigid, over-regulated and volatile economies in the OECD at the end of the 1970s and is now one of the most open, flexible and free..."

Malcolm Turnbull, 2013

- As a small exporting nation with relatively low rates of saving, Australia has always been reliant on foreign investment for economic development, especially in agriculture and mining. At different stages of Australia's history, finance (for both private and public investment) has come from the UK (all the time), USA (since 1945), EU (since 1945), Japan (1980s), China (2000s), etc

- Successive waves of immigration to Australia like Gold Rushes (1850s), European (post 1945), Asian (1960s), etc, have been very important in Australia's development

- Australia has successfully dodged the Asian crisis (1997), the tech wreck (2000) and the GFC or Great Recession (starting in 2008). What has also helped have been past reforms, including floating the dollar, opening the banking system, industrial relations reforms, etc which have helped Australia absorb the economic shock.

- Since the early 1990s, our GDP has doubled and per capita income has increased by around 50% (Turnbull, 2013). This is linked with the mining boom. However, our productivity grew faster before the mining boom.

"...The challenge for the future is how, in an increasingly competitive, volatile and unpredictable world, do we maintain an Australia with high wages, with a generous safety net, a society in which everyone has the realise their dreams......The keys to prosperity have not changed. Our greatest asset are not under the ground, but walking on top of it......The more uncertain the environment, the more valuable is flexibility, which gives you the ability to change direction quickly as circumstances change and to take advantage quickly as new opportunities arise..."

Malcolm Turnbull, 2013

Furthermore, Australia's population is one of the most diverse (ethnic/cultural/racial, etc) in the world:

- more than 140 different groups (non-Indigenous) are represented plus over 250 Indigenous tribal groups and languages in Australia (many of languages are now extinct)

- around 24% were born overseas

- around 15% were born in non-English speaking countries of Europe and Asia

- about 5% of the population is Asian-born

- about 45% of the population comes from families that arrived after 1945

- about 25% of Australian-born residents have at least one overseas-born parent

By contrast, 20% of the US population is of Afro-American descent and 20% are of Latino descent.

One reason for Australia being one of the most successful "multi-cultural" countries in the world is that our national identity is not identified by reference to common race, ethnicity, religion or cultural background. Instead

"...Our common national identity is defined by a common commitment to Australian civic values of democracy, the rule of law, respect for rights of individual men and women, a healthy scepticism for authority and a deep intuitive sense of a fair go. There is no individual component in our civic value unique to Australia. But the combination is distinctly Australian - for example, we are much less deferential than the British, more caring, with a stronger safety net than the Americans......we have a lot less "middle-class welfare" than most OECD countries......and those values are accessible to everybody because at their core is a live-and-let-live respect for others. Our approach respects cultural diversity by seeking civic immigration of which English language and a national curriculum are key elements, rather than cultural assimilation in which migrants are expected to cease to be themselves. This diversity has immensely enriched Australia......making us not simply heirs to the culture of our forebears but to those of our neighbours......the right formula for success - civic integration coupled with a respect for and ideally curiosity in all the cultures of our people..."

Malcolm Turnbull, 2013

On the other hand, Indigenous journalist Stan Grant (2016) has argued that the Australian dream was rooted in racism (Joanne Gray, 2016). This is most obvious shown by the wrongs done to Australia's Indigenous population

Over the last several decades, Australia has changed from the cultural cringe image (embarrassed to be an Australian and with an inferiority complex in regard to Britain and USA) to being more self-assured; factors behind this include

- breaking down of White Australia policy
- opening of the domestic economy to international market forces like floating the Australian dollar, reducing protection for local manufacturers, etc
- liberating our thinking from the narrow Anglo-centric prism
- tertiary education became a major export industry
- China emerged as our most important trading partner
- cultural changes linked with migrant intakes, globalisation, Internet, digitalisation, etc
greater international mobility with more Australians working overseas and more Europeans and Asians working in Australia on a temporary basis
Some of the legacy of the past still remain such as mateship, egalitarianism, volunteerism & healthy disdain for authority. These were established in earlier times when people lived in adversity, ie surviving a harsh bush environment. For the last 2 generations we have lived in affluence but still hang on to these values. These are shown by the century old tradition of a basic wage, low cost health care like Medicare, "free" public education, volunteering for community services/sporting events, negative attitude to politicians and people in authority, etc
At the same time, like most Western countries, Australia is not sure where it is heading. Factors influencing this uncertainty are the violent Muslim extremists causing insecurity, negative impacts of the GFC continues, end of the China-driven commodities boom, impacts of technological changes re globalisation, digitalisation, social media, etc

Do not overlook some Australian success stories, eg

- Michael Chaney's success at Wesfarmers, ie if you invested $8,000 when he become CEO in late 1980s and re-invested all dividends, etc, this investment would have been worth $1 million when he left in mid 2000s. It is of interest to note that Wesfarmers started as a rural co-operative; initially it purchased Bunnings for its timber, not hardware. It sold the timber interest once the hardware boomed.

- Westfield under Frank Lowry, ie if you invested $1,000 in Westfield Development in 1960 at its listing and re-invested all dividends, etc, this investment would be worth around $170 million in 2010. A similar investment in the All Ordinaries Index, in contrast, would be worth $165,000.

NB These 2 stories provide better results than Jack Welch's performance at GE, ie invest $US 10,000 in the mid 1980s when he became CEO and it would be worth over $US 300,000 when he retired in early 2000s.

Recent politic scene in Australia is unique, ie with its 5  Prime Ministers in from 2010 to  2015, Australia has been referred to as the country of "democratic coups". It is a similar experience with CEOs, ie Australia changes its CEOs 2.5 times the global average; around 25% of CEOs of companies on the ASX have less than 1 year of tenure. With Australian economy  dominated by the "boom and bust" sectors, like agriculture and mining, there is a tendency to blame the person rather than circumstances.

Also, Australia has a preference for hiring from outside, ie over 50% of new CEOs are hired from outside, rather than promoted from within. Again this is dramatically different from the rest of the world. There is a strong argument for developing insiders who know the culture & want to work in the organisation. This lack of developing leaders internally and the overseas brain drain means that Australia is not well equipped with global leaders.
Australian organisations are facing increased competition for talent from the emerging economies overseas. This is further exacerbated in Australia with the ageing population, pending retirement of many senior managers and a lack of succession planning, ie not training future managers

Contrasts between Americans and Australians

. Australian are more self-deprecating and reserved than Americans. For example, Australians are more likely to initially tell you what is going wrong and/or could be done better; while the Americans will initially focus on what they are doing well

In Australia you have business activity statement (BAS), goods and services tax (GST). This results in a much more regular relationship between accountants and business than in the USA. Also, owing to the litigious nature of the USA, the accounting industry there is far more conservative about moving away from the safe world of compliance to providing value-added business advice.

- Australians' social values are more egalitarian. They are a hybrid between the USA (class system based on wealth and fame) and UK (more hierarchical class system based on history and family background)

· Different dialects of English, ie American v. Australian. Words can have different connations in different context: rubber is a condom in America while it refers to a eraser. Other examples include Americans

- like to "double dip", eg tunafish, sodapop, tinfoil, etc

- "Hamburger" refers to "mincemeat" while "burger" is "rissole"

- "broil" means "grill"

- "grill" means "barbecue"

- "barbecue" is about "ribs and sauce"; with "biscuit" being a savoury side of those ribs

- "cookies" are "biscuits"

- "drugstore" is a "pharmacist"

- news agencies don't exist; newspapers sit in randomly-placed boxes

- "doctors for ladies issues" are referred to as "O.B.G.Y.N"

- "freemium" refers to "dotcoms"

- "healthful" refers to "vitamin-infused water"

- "verbiage" refers to desirable wording rather than excess blather

- "active recovery" is a "warm down"

- "office hygiene" involves those practices that are necessary for smooth daily operations bit but not sufficient to actually progress anything

- "reaching out" refers to storytelling

- "purchasing" refers to buying

- never say or refer to somebody as "dear"

- "trash" rather than "garbage"

Australia is one of the most urbanized countries in the world with around 61% of its population living in its 5 biggest cities; compared with 22% in the USA and 17% in Britain

Even though both USA and Australian citizens espouse individualism as an important part of their respective cultures, the USA is stronger in this element, eg the admiration for the superstar in the USA contrasts markedly with the 'tall poppy syndrome' in Australia. The "tall poppy syndrome" refers to the situation where if one rises above the "pack", there is an attempt to pull that person back to the "pack".

Australians are more self-deprecating and reserved than Americans. For example, Australians are more likely to initially tell you what is going wrong and/or could be done better; while the Americans will initially focus on what they are doing well

Differences in percentage of workforce engaged in "core creative" activities (architects, designers, filmmakers, artists, authors, etc. - Australia (5.5%), while UK (8%) and USA (7.5%)

Being innovative is not part of the culture of Australian organisations, ie this is part of our cultural cringe. Some of the reasons for this are

- lack of incentive from government,

- lack of size of our markets hinders

- lack of funding (government, corporate, etc)

- tall poppy syndrome, ie innovators are not rewarded

Furthermore, the number are against us, ie

"to end up with 10 success stories you need 1,000 new companies ... We only have 1,500 tech start-ups across all Australia"

Alan Noble as quoted by Patrick Durkin, 2013

(sources: David James, 2002; Tim Flannery, 2003; Wayne Mansfield, 2003; Margaret Helman, 2002; Edgar Schein, 2004; Dierdre Macken, 2006a; Robert Harley, 2010; Malcolm Turnbull, 2013; Kevin Rudd, 2013; Patrick Durkin, 2013; Joanne Gray, 2013; Andrew Cornell, 2013; Sally Dominguez, 2014)


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