jimbo_d

There's $100bn coming in this year alone let alone the next decade. Aus will do just fine with the majority of industry becoming centered around mining and gas

slapphead_otool

True, I always felt that I couldn't fail in mine, because the university wanted my money.

But - in Defence of MBAs

1. The cost of my MBA was staggering - in my case $30,0000 in the mid 90s, plus 18 months without salary. To do the same AGSM MBA today costs $70,0000. That cost alone tends to motivate you.

2. Although the work wasn't hard, there was a huge amount of it. The workload was massive and relentless. People didn't fail, they gave up

3. The entry criteria to my course was pretty strict. They demanded good undergrad degrees, and minimum periods of work experience. even then they rejected 3 out of 4 qualified applicants at the interview stage. I have no idea why they accepted me. Maybe out of pity...

4. An MBA is just a pack of concepts and philosophies. They show you how others have resolved problems, then they give you case studies and see how you would handle it. Which is why it's hard to fail. There is no right answer.

The real problem is that anyone and everyone now offers an MBA, and there are different types of MBA.

I did mine at the Australain Graduate School of Management, which at the time was ranked 20th best business school in the world. I could have done it at a number of cheap private schools or third rate universities. I wanted the best I could afford.

There are also big differences in a full MBA and the cut down Micky mouse "executive MBA" which is a cheap short course. Of course people holding EMBAs "forget" the E bit when they mention their MBA.

The Australian institute of Mangement now even offer a "Mini MBA" that you can get in a weekend or so:

http://portal.aimnsw.com.au/Portal%2...ule%202009.pdf

Not all MBAs are equal.

chris955

There are major problems with putting all your eggs in one basket.

commonwealth

better to put all your eggs in mining than all in financial services though.

sr71

Yes, having worked in Singapore/Thailand it seems to be the done thing for many Asian students - first degree in International Business or Marketing, then straight to an MBA without a single bit of working experience.

But it still does carry some weight in some areas.

slapphead_otool

Most of the banks and insurance companies are looking at offshoring.

A few years ago they tried outsourcing. I would spend hours every night on the phone to India. My personal experience was that they followed the bureaucracy but not the work. I would demand project documentation and it would arrive as a boilerplate with just the front page filled in. In my experience it just didn't work.

Now the latest idea is to offshore the work, using staff located in cheap countries. Unlike outsourcing these staff actually work for the bank.

It's going to fail. I have spent the last 25 years working across Asia, using local staff. I even spent time managing the offshore development of BI from jakarta.

There are too many problems with doing work in Asia that Australian based people forget.

Take Thailand. A seemingly sensible place to offshore your IT to. When I was there in 2009 huge parts of Bangkok were shut due to riots. Soldiers controlled the streets. People were shot dead in the city centre. Last year the whole city was under water.

When it rains in Jakarta it can take SEVEN hours to get from the city to the airport. And if it concurs with a high tide, the city floods.

On top of that the skill levels can vary dramatically, and forget about qualifications, the educational system in Asia is very patchy and corrupt.

The offshoring will be ashore lived experiment.

palmer59

Not sure how my original question has become a debate on MBAs ?

ozzieeagle

But it doesn't have all it's eggs in one basket.

Australia also has a strong farming industry.. It's one of the largest grain and livestock exporters in the world, that can only increase as well.

commonwealth

and it's not just mining iron and coal. there's energy as well (uranium and LNG will become more important in the future energy mix, despite the fukushima disaster). after yesterday's Inpex/Total announcement of LNG investment in NT, Australia will overtake Qatar as the world's top LNG producer. According to Inpex the gas is expected to add almost 18 per cent to the NT’s gross state product each year of the 40-year project. It will pump $3.5 billion into the Australian economy each year.

slapphead_otool

Exactly, and of course financial services can be offshored at the push of a button. Pretty hard to move a bauxite deposit to a cheaper country.

The UK financial services sector is in the gun sight of the EU, who want to tax it's transactions - the Tobin Tax. According to the IMF such a FTT would decrease liquidity and reduce trading volumes.

Of course the UK can (and is) declining to get involved in the FTT. This plays into the hands of Germany who would love to be the centre of European financial services.

I predict a bumpy ride for the UK financial sector.

Mr Grumpy

Exactly. Australia provides real substantial goods while the UK provides imaginary made up non-tangible goods that have no real value other than what people choose to give it.

Australia provides stuff that you can actually touch and use for power and construction, or lots of food to eat.

I think the age of imaginary stuff is coming to an end.

sr71

It is failing, but it's a business model that makes huge short term profits for many companies. My current account current deals with India and that is a total disaster that has caused irreparable reputational damage IMO. Yet in a 5 year contract we are talking hundreds of millions in additional profit by basing services from there. When companies run their business quarter by quarter I'm afraid that's all that matters.

Thailand actually isn't that great a place to offshore, the English language skills are not that great. (even though they have pretty good tech skills). The Phillipines, Malaysia, Eastern Europe etc are all better for that.

slapphead_otool

Agreed - short term interests are driving a lot of foolhardy decisions.

I also agree about Thailand, and to be honest the rates there at climbing, as are standards of living. I know BKK secretaries who own cars now.

I was working in Manila last year, before I did the Island thing. I was impressed with the technical skills (I was restructuring a data warehouse and writing a BI strategic vision). However the second week I was there a bomb went off on a bus near where my wife was shopping. Five dead and Sixteen wounded.

http://www.reuters.com/article/2011/...70O1MV20110125


Off shoring relies upon Australian management to make things happen. They won't be happy when bombs go off or cities flood.

slapphead_otool

Sory mate. Probably my fault, so I will try to give you some perspectives.

If you look at the exchange rate it has been steadily falling for over 18 months. There are two effects in play - a strong AUD and a weak UKP. Both are partly deliberate, and partly factors of confidence in the respective currencies.

the market thinks the AUD is strong because it has a lot of what everyone needs. Minerals. The demand may fluctuate due to economic conditions, but the demand always comes back. So it's a good safe investment.

The market thinks the UK is weak because a lot of its economy relies upon the financial services sector, and given its troubles in the recent past no one thinks it's a good bet. exposure to the European troubles isn't helping either.

Both of those are perceptions. Australia does have some weaknesses, and The UK some strengths. But that's how the market sees things.

The UK government all tries to keep the pound weak, because it makes goods and services in and from the UK cheap.

Australia could lower its rates, but doesn't need too, and it's ability to do so remains another magic bullet. At the moment it is keeping that in reserve. People are still investing in Australia, and australian minerals are still bring exported.

If I were to run a straight line over the exchange rates, it would hit parity in early 2013. That isnt going to happen, although it is not impossible. But I do think the rate will fall even further. The European mess is hanging around, the Germans want the financial services sector, and the UK is now even talking about falling apart. I cnt see nothing on the horizon that is going to provide a confidence boost in the UKP in the near future. It's going to be a long uphill battle.

There are some clouds on the Australian horizon. China might fail for instance. If that happens there will be a loss of confidence in the AUD. I don't think it will happen in the next two years.

I don't think the exchange rates will get significantly better better until 2014.

Does that help?

chris955

You do realise that UKs manufacturing sector is bigger than Australia's don't you ? Also that the biggest sector by far in both countries is services ?