Australia is a proudly multicultural nation, home to more than 4 million Australians of Asian descent. This diversity has enriched the nation’s culture, economy, and global connections. While multiculturalism is an asset, it’s not a substitute for building the comprehensive Asia literacy needed to engage deeply and effectively with the region.

Asia is evolving rapidly – economically, politically, and culturally – and Australia’s current capacity to stay competitive in this dynamic landscape is falling short. Without meaningful progress, Australia risks missing out on the full benefits of deeper regional engagement.

Australia’s cultural diversity has a history of overcoming short-term challenges to prove its long-term contribution to economic prosperity and social cohesion. Yet, as Foreign Minister Penny Wong pointed out in a recent speech, the growth of Australia’s Asian diaspora – encompassing 1.4 million South Asians, 1.1 million Southeast Asians, and 1.6 million from North Asia – has not translated into sufficient improvements in Asia literacy across the country.

Migration strengthens cultural ties and offers unique insights, but this alone doesn’t guarantee the skills necessary to navigate Asia’s complexities. Language proficiency, often seen as a proxy for broader Asia literacy, declines across generations. Data from the Australian Bureau of Statistics shows that fewer second-generation Australians speak their heritage language at home, underscoring the challenge of maintaining Asia-related competencies.

The sooner Australia’s business community prioritises building Asia capabilities – through a deeper understanding of Asian languages, cultures, and economic trends – the sooner they will realise the benefits of sustainable growth and expanded opportunities in the region.

While migration may help bridge the Asia literacy gap, it is not a comprehensive solution, and Australia risks losing valuable time as Asia surges ahead. Moreover, recent arrivals to Australia do not parachute into positions of influence within government or business, where their insights could shape more informed approaches. The 2024 Board Diversity Index shows that only 6.6% of ASX300 Directors come from non-European backgrounds despite comprising 33% of the population, exposing a persistent and systemic underrepresentation.

Australia’s future lies in deeper economic and strategic engagement with Asia, making Asia literacy more critical than ever. As Prime Minister Anthony Albanese highlighted at the 2023 ASEAN Summit in Jakarta, “Southeast Asia’s fast-growing economies present a major opportunity for Australian business, but we haven’t kept pace with their exponential growth.”

The government’s most recent strategy relating to Asia – the Southeast Asia Economic Strategy to 2040 authored by Special Envoy Nicholas Moore, highlights four key areas to unlock commercial opportunities between Australia and Southeast Asia. At the top of this list is to “Raise awareness to address a lack of knowledge of markets, sectors, and declining regional literacy.”

Despite Asia’s growing importance, Australian businesses risk falling behind more Asia-literate competitors as regional markets evolve and innovate. The value of Asia literacy is in unlocking deeper, sustainable market access and positioning Australian companies to capitalise on the next wave of growth in the region.

More broadly, regional neighbours such as China, Japan, South Korea, and India – now leaders in technology, innovation, and services – are outpacing Australia’s progress. To close this gap, Australia must reinvigorate its efforts to expand Asia literacy and be more informed and attuned to the entire region than ever before.

Many Australians still view Asia as an underdeveloped region, overlooking its rapid transformation into a technology, innovation, and services leader. In recent years, businesses have at least acknowledged the importance of managing political risk related to Asia, particularly as its economic influence expands. As Asia becomes more integral to global supply chains, trade, and investment, the political stability of countries in the region, along with shifts in policies, trade regulations, and geopolitical tensions, increasingly impact business operations, not just those exporting or operating within the region.

A concerted effort must be made to develop targeted Asia-focused skills to capitalise on Australia’s proximity to Asia. Education remains fundamental in schools and universities, but bringing the corporate sector to the table is critical. While the government can take steps on the policy front, businesses must also lead. The sooner Australia’s business community prioritises building Asia capabilities – through a deeper understanding of Asian languages, cultures, and economic trends – the sooner they will realise the benefits of sustainable growth and expanded opportunities in the region.

Demand for these skills will eventually grow as the economic benefits of having Asia-literate leaders and staff become undeniable through better trade relationships, expanded market access, and stronger regional partnerships. However, waiting for the market to catch up will leave Australia at a disadvantage. Until then, there is a market gap that needs to be bridged now.

Programs such as the New Colombo Plan have made notable contributions, offering students opportunities to live and work in Asia. However, as the program undergoes reform, it is clear that the challenge extends beyond simply producing more Asia-capable graduates. There’s a growing recognition that demand-side efforts are essential to enhance how employers value and utilise these skills in the workforce.

Asia literacy is essential for sustaining Australia’s long-term prosperity and competitiveness. A proactive approach – focused on both supply and demand – will ensure the country seizes the opportunities Asia offers before they pass by.

Multiculturalism is a powerful asset, but it’s not a solution for the nation’s Asia literacy aspirations. Without a timely, holistic approach, Australia risks falling behind despite being ideally positioned in a region that will define the 21st century.