Former treasury secretary Ken Henry believes Australian businesses must be prepared to become more integrated with Asia, even if that means moving parts of their operations offshore.
Dr Henry, who is now a senior adviser to Prime Minister Julia Gillard, has been given the task of putting together the paper on Australia's role in the Asian century.
"If there is one message from the Asian century it is we can't be complacent," he told the Australian Industry Group national forum in Canberra on Monday.
"It would be a mistake to think that geography and/or geology alone will get us where we want to go and allow Australia somehow to ride the wave of the Asian century around us."
Dr Henry said the test of the paper's ideas would be when Australia looked back to see what opportunities had been seized.
"The white paper will not provide a shopping list of spending promises and policies to be implemented immediately to achieve instant success," he said.
Integration with Asia was at the heart of the white paper, and for business this would mean collaboration, co-operation, partnership and engagement.
He said local businesses must start acting like regional entities, by becoming part of regional supply chains, partnering with complimentary foreign firms or moving operations to Asia.
Dr Henry conceded offshoring to Asia was not easy because such plans attracted criticism from unions and local communities because of the potential for job losses.
But he pointed to the example of Australian bootmaker Blundstone, which had prospered from moving part of its business offshore.
"It is clear today that if Blundstone had not shifted elements of its manufacturing to Asia five years ago, it would have gone out of business completely," he said.
He recognised many trade-exposed business were suffering from the strong Australian dollar as a result of the mining boom but there was "no silver bullet" to bring down the currency rapidly.
However, Dr Henry said Australia's economic policy framework - which features a floating exchange rate, the independent setting of monetary policy and competition policy - had served the nation well.
"These things have helped to protect Australia from the impact of several economic shocks emanating from overseas," he said.
"It is important that we build on them and resist the temptation to dismantle parts of the framework, even though we may perceive from that dismantling a short-term advantage."
His comments came as a new survey showed small business remained in the doldrums.
The Australian Chamber of Commerce and Industry small business survey for the June quarter showed general business conditions continued to deteriorate with indices for sales, profitability, investment and employment falling to contractionary levels.
ACCI director of economic and industry policy Greg Evans said it was a "disturbing pattern".
"Small business isn't borrowing, small business isn't investing and small business isn't employing," he told reporters in Canberra.
"It's really in a hibernation or even survival mode at the moment."