Dr Khalid Koser is Head of the New Issues in Security Program at the Geneva Centre for Security Policy, and a non-resident Fellow at the Lowy Institute.

The 'business model of migrant smuggling' was developed by me and a few colleagues at the Migration Research Unit at University College London during the mid 1990s. So in some senses it has been gratifying to hear Prime Minister Gillard speak about 'smashing the people smugglers' business model' including in her recent interview with CNN — academic research doesn't often make it into prime ministerial speaking points.

What is less gratifying is that the prime minister doesn't appear fully to understand the model, and thus her government's efforts to 'smash' it are unlikely to be effective.

Three 'business' principles appear to form the basis for Australian asylum policy over the last year. First, if you can demonstrate to clients that they are not getting what they paid for, then they'll stop paying. Thus if asylum seekers who have paid to reach Australia end up in offshore processing on a Pacific Island or in Malaysia, then others won't waste their money.

Second, if you can drive up the costs of smuggling, then fewer people will be able to afford to pay. One way to drive up costs is to increase the risks for smugglers — for example, by penalizing them more heavily — in which case the prices smugglers charge will rise to compensate for their increasing exposure to risk.

Third, if you can provide asylum seekers with a reasonable alternative that is cheaper or even free, as well as less risky, then they are likely to take that option. This is part of the logic that lies behind the development of proposals for regional processing of asylum seekers in Southeast Asia.

If these 'business' principles are right, then the Australian government deserves credit for developing a comprehensive set of policies that are in some cases quite innovative and seek systematically to undermine each principle in turn.

The problem is that these policies aren't working. And one reason is that migrant smuggling is not a normal business.

Our publications have pointed out, for example, that the smuggling business is not always driven by financial motives. While most smugglers operate for profit, this may combine with religious or charitable or altruistic motives (Oskar Schindler was a migrant smuggler). For people fleeing for their lives, value for money or financial profit is less important than getting to safety. Here it is worth remembering that, over the last few years, the majority of unauthorised boat arrivals in Australia have been recognised as refugees.

Second, it is a mistake to generalise the business of smuggling. Sometimes it is run by family-based outfits, as is often the case across the Mexico-US border, for example. At the other end of the spectrum it is organised by transnational networks and forms just one part of a wide range of business interests (both legitimate and illegitimate), as is the case for 'snakeheads' operating in China. In the case of the former, putting a single operative out of circulation (say by burning his boat) is likely to be fatal to the business. In the latter case it is likely to be virtually irrelevant.

Third, the business model of migrant smuggling intersects with powerful social processes and pressures. Asylum seekers head for Australia not just because it is a wealthy country where they can probably find work (as well as safety), but also because many have family, friends, and co-ethnics there. It is often families at home who pay for members to be smuggled, and there can be pressure on asylum seekers to repay the investment. In particular in some of the countries from which unauthorised boat arrivals have arrived in Australia in recent years, family loyalties, social commitments, and personal pride can trump economic rationality.

In any case, asylum seekers often do not have enough information to make a 'rational' decision about whether to trust a smuggler or which destination to head for. Ironically, one of the main services smugglers are paid for is to provide information, and they are of course incentivised to provide information that boosts business. We shouldn't be surprised that asylum seekers trust information from smugglers more than they do that from the Australian government, especially when the former is usually positive and the latter usually negative.

What are the policy implications of this more nuanced approach to the migrant smuggling business model? The only lasting way to reduce demand for smuggling is to help people remain in their origin countries in dignity and safety, or provide legal alternatives to migrate. Smuggling cannot be stopped on a unilateral basis. It may be possible to reduce smuggling to Australia, but flows will simply be diverted elsewhere.

To stop rather than divert smuggling requires cooperation with and capacity-building in the countries that asylum seekers leave and transit — this is where the business is based. A comprehensive policy would also need to consider the role played by diaspora members in supporting smuggling, and reduce the ability for smuggled migrants to work and remit money.

Of course none of this will help Prime Minister Gillard. There is no evidence that these policy proposals would work (or are even attainable); their potential impact would be in the  long-term and this government needs quick results; and in some cases they are politically sensitive and risk trespassing on fundamental rights.

It wasn't just because we were academics that we deliberately avoided writing about how to respond to the business model of migrant smuggling, it was because we realised that it couldn't be done. The point about businesses — and the reason we chose that term — is that they tend to adapt and endure. Government policy can close down individual companies; it can drive business underground; but it has rarely succeeded in smashing an entire business sector.

Photo courtesy of the Defence Department.