Paul Wallbank – Brilliant Communications

Category: government

  • Building a digital hub – and why governments shouldn’t try.

    Building a digital hub – and why governments shouldn’t try.

    “I’m not sure what to do with this,” frowned the public service executive to a group of blank faced departmental staffers. “I’ll take it,” I said to break the silence.

    With that, I was on a journey into exactly what Sydney’s startup and digital media communities looked like and learning why governments struggle to build technology hubs.

    I’d been working for the state government for two months after a specularly unsuccessful exit from a business and in the shadow of the 2008 financial crisis getting a public service job seemed like a good idea.

    Vague ideas

    The project being discussed by Bob, my then director, was a single line in the recommendations from the then Premier’s Jobs Summit which was convened in the panicky dark days of the 2008 global financial crisis – “A digital hub will be setup around the Australian Technology Park.”

    Bob, and the management of the New South Wales Department of Trade and Investment had little idea of what a ‘digital hub’ was and my position of ‘Manager, Creative Industries” – with a staff of precisely zero – was vague given the state’s support to the creative industries was, and remains, based on throwing big buckets of money at the Hollywood movie studios.

    So the Sydney Digital Hub was born and the quest to find out exactly was was needed, or at least would keep the Premier’s office happy, was on.

    It immediately became apparent the Australian Technology Park wasn’t going to be the centre of anything as far as Sydney’s startup community was concerned. The complex was too far away from the city and too expensive for most of the businesses.

    Replacing what’s existing

    “We already have a digital hub,” was the other response. “It’s Surry Hills.” Which was a far call as a large part of the Sydney startup and digital media communities were based in the suburb on the edge of the city’s centre.

    This actually worked well as the exact wording of the committee’s recommendation was “create a digital hub around the Australian Technology Park.” In this case, Surry Hills was ‘around’ the ATP.

    Eventually the project became Digital Sydney and by the time it was launched, the state had gone through two Premiers, elected another party into government and I was long gone from the department, having lasted just 19 months.

    Before leaving, I had managed to steer through a million dollars in funding for the project from the then Labor minister – since caught up on corruption charges surrounding coal mine leases – which, to their credit, was honoured by the incoming Liberal government that took power shortly after.

    Dying a slow, unfunded death

    That funding was renewed and the project died a slow death, which didn’t really matter as Sydney’s startup and digital media communities had developed despite of, not because of, any government policies. Indeed, the New South Wales’ government’s economic development policies were, and remain, focused on property development and coal mining.

    Which brings us to the present day, where the Sydney startup community is upset at the Sydstart conference being poached by the Victorian government and moving to Melbourne on the promise of a million dollars in support as part of the state’s startup program.

    The promoters of the now relocated and renamed conference are adamant it matters, but the truth is it doesn’t. In fact the biggest ticket item of NSW government support to the IT sector is the annual CeBIT conference that in truth has added little to the state’s technology industry and many similar initiatives in Victoria have had a similar lack success.

    A lack of long term vision

    Part of the reason for that lack of success is a lack of consistency and long term strategies, in fact the Australian Technology Park itself is under threat as the state government looks at selling the site to apartment developers despite the protests of the tech community.

    Another aspect is state sponsored conferences, hubs and initiatives are not enough to create an industrial centre. There has to be an organic, or business, reason for a hub to develop.

    For industry hubs, be they tech startups or anything else, the core need is a critical mass of investors and skilled workers with easy access to markets. For internet based businesses, the latter isn’t an issue which is why Wellington in New Zealand has done better than either Sydney or Melbourne in recent years.

    Providing stable frameworks

    The role of governments in this is to provide a stable framework for businesses to work within, something that hasn’t been a feature of state or Federal Australian politics in recent years with leadership instability and the increasing prevalence of policy by thought bubble, a good example being the latest scheme to create a new technology hub even further out of downtown Sydney on the site of disused power station.

    While the talk of government sponsored initiatives is nice and keeps my former colleagues at the state government occupied writing ministerial briefings on pink paper, building the tech hubs of the future needs motivated entrepreneurs, investors and skilled workers. The best thing governments can do is make sure they encourage all three groups and leave the community building to the community.

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  • Malcolm Turnbull and the task of turning around Australia

    Malcolm Turnbull and the task of turning around Australia

    Watching from afar, the reaction to Malcolm Turnbull becoming Australia’s 29th Prime Minister has been remarkable as suddenly the nation seems to have collectively woken up to the fact they are fifteen years into a new century.

    In a few short weeks Australian public servants have started engaging in hackathons and business leaders whose idea of an investment was a property plan disguised as a casino have started raising VC funds.

    The question though for Australia is this too little and too late after three decades of concentrating on property speculation and betting on a never ending Chinese economic miracle?

    New leadership

    In Malcolm Turnbull – who only rejoined the Liberal Party in the early 2000s after careers as a journalist, barrister and banker – Australia for the first time in forty years doesn’t have a party apparatchik as Prime Minister.

    While this wasn’t a problem during the 1970s and 80s under Fraser and Hawke, by the 1990s the shrinking membership base of Australian political parties meant increasingly the ‘talent’ coming up the ranks was lacking perspective outside the narrow factional groupings most of them were beholden to.

    This became brutally apparent with the last three Prime Ministers who were fully hostage to their party factions. In Gillard and Abbott Australia had two party operatives who were no doubt talented in internal party manouvering but hopelessly out of their depths as government leaders – Abbott often seemed to be more interested in settling the battles of 1980s Sydney University student politics than governing the country.

    Describing Prime Minister Rudd would take a thesis in political psychology which is way beyond the scope, or interest, of this writer.

    The consequences of this were an Australian political leadership that was disinterested in the real economy beyond guaranteeing the social compact that property prices would double every decade and ensure their support in the key swing electorates of suburban Australia.

    An insular business community

    For the business community the insular focus of Australian society and its politicians worked well too. As the economy turned inwards in the 1990s under the Keating and Howard governments, so too did Australia’s conglomerates who realised clipping the ticket of a consumer economy was far easier than competing on global markets.

    The best example of this were Australia’s banks which essentially gave up on lending to business unless it was guaranteed by property. This graph from Macrobusiness illustrates just how the nation’s banks focused on property speculation.

    Australian bank lending, courtesy of Macrobusiness.
    Australian bank lending, courtesy of Macrobusiness.

    That focus on housing and consumer spending underpinned on rising property prices distorted the entire business sector and ingrained in the Australian psyche that the key to riches and prosperity was to get a relatively low skilled ‘safe job’ and borrow as much money as possible.

    A good example of this are the regular stories of sweet twenty something wunderkinds who have built multi million dollar property portfolios while working in pizza shops or as administrative assistants.

    Possibly the greatest damage Australia’s property obsession has been on the nation’s youth where the message has been ‘don’t gain a globally competitive skill set or education, just get an entry level job at the real estate agents and buy as much property as the bank will allow you.’

    Turnbull’s challenge

    Like Gough Whitlam, the last Prime Minister not a creature of their party factions, the reform challenge facing Turnbull is immense as 25 years of complacency have left Australia with an uncompetitive economy – as it had for the incoming Labor government of 1972 – with added complexity of having to maintain property prices to keep its economic miracle and social compact ticking over.

    The similarities to Whitlam are also striking in the support Turnbull has from the population. One of the striking things on returning to Australia after spending most of the last three months in the United States has been the sense of relief that the inept horror movie of the Abbott government (Attack of the Clueless Zombies) is over and a realisation that Australia has actually entered the 21st Century and not regressing back into the 19th.

    Agendas for reform

    Entering the 21st Century won’t be easy though for Australia. Completing the reforms of the education sector, started half heartedly by Gillard and then trashed by Abbott in settling the scores of his student politics days, is one major challenge along with reforming tax and social security systems that focuses on asset hoarding and speculation over productive investment.

    Possibly a greater challenge is to wean the Australia business sector off its ticket clipping mentality and rediscover its desire to compete globally. It may well be that encouraging the startup sector makes more sense in rebuilding the economy’s competitiveness as many of the nation’s insular conglomerates and their well fed executives are too used to milking the domestic consumer rather than taking on the world.

    The end of kitchen renovations

    The biggest challenge of all though will be to wean Australians off their property addiction, particularly those under 50 who have neglected their global skills as they focused on renovating their kitchens.

    Given the scope of these reforms, such an agenda will require a clear mandate from an electorate that has been complacently accepting guaranteed good times as long as refugees are turned back, the terrorists among us imprisoned and gay couples prevented from marrying for the last 25 years. Making the argument for change is probably going to be Malcolm Turnbull’s greatest task.

    For Australia the stakes are high. It’s not likely the 21st Century will be as kind to The Lucky Country as the Twentieth was.

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  • Attracting the world’s startups

    Attracting the world’s startups

    While San Francisco and Silicon Valley remain the biggest magnet for tech startups, many other countries are trying to attract entrepreneurs with preferential visa arrangements and subsidies. Successfully doing this will define the rich nations of the 21st Century.

    Israel is the latest country to join the competition with the Israeli Ministry of Economy, the Ministry of Interior and the office of Chief Scientist will launch the program in the next few months which will allow entrepreneurs from around the world to come to the startup city of Tel Aviv for 24 months in order to develop innovative projects.

    Entrepreneurs who wish to stay in Israel and open a startup company will be granted a specialist visa. Aryeh Deri, the nation’s Economic Minister said, “tThe Startup Visa will enable foreign entrepreneurs from around the world to develop new ideas in Israel, that will aid the development of the Israeli market”.

    Israel’s Startup Visa programs joins Tel Aviv’s city-to-city-collaborations with Paris and Berlin, which allows entrepreneurs from the cities to receive a soft landing package including desks at co-working spaces, advice on visas, regulations and legal issues around starting up companies, as well as one-on-one mentoring assistance and access to the ecosystem in each town.

    Just as Israel, France and Germany are opening up, it appears the UK government is tightening up its visa requirements much to the anger of their startup community.

    The tech startup community is only a small part of the bigger economy, the challenges facing all these countries is the fight to win the global race for talent and young workers.

    For almost all the developed world facing stagnant growth rates and ageing workforces, winning that race will define their prosperity for the rest of the 21st Century.

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  • Risking a digital recession

    Risking a digital recession

    Europe risks heading into a ‘digital recession’ warn Bhaskar Chakravorti and Ravi Shankar Chaturvedi in the Harvard Business Review.

    Chaturvedi and Chakravorti base their concerns on the Digital Innovation Index they created that looks at the sophistication and speed of digital change across fifty developed countries.

    Most Northern European countries, along with Japan and Australia, were advanced but their rate of adoption was falling risking their economies dropping behind the researchers found.

    W150210_CHAKRAVORTI_COUNTRIESBUILDINGDIGITAL1

    The solution offered by the authors was for the countries to encourage investment, immigration and exports.

    The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on innovation and continue to seek markets beyond domestic borders. Stall Out countries are also aging. Attracting talented, young immigrants can help revive innovation quickly.

    A striking problem in Europe is the state of e-commerce across the continent where consumers prefer to buy from US based sites than from those of fellow EU countries.

    In many of the nations government Austerity policies have also hurt investment while risk averse cultures have discouraged innovation and new business formation.

    For Europe, the risks of being left behind are real and with an aging population a fall in living standards is a likely possibility. It would be a shame if the European Union experiment ends up failing due to a digital recession.

     

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  • Using city muscle to drive private investment

    Using city muscle to drive private investment

    Chattanooga in the US mid West introduced city broadband in 2008 in the face of legal challenges from the existing cable operators.

    The operators lost in the courts and were forced to compete with the local, city owned power company’s network.

    Now Wired reports Chattanooga is upping the ante by increasing the available throughput of their network to 10Gb.

    While that’s good news for those businesses and households in Chattanooga that need those speeds, there’s a much more important effect that Wired points out.

    Municipal broadband providers are raising expectations nationwide for what good Internet service means, forcing commercial providers to improve their infrastructure. And by increasing the amount of bandwidth available, they could be setting the stage for the creation of new, more bandwidth-hungry applications. This is how better service goes from a “nice-to-have” to a “you’d-better-have” for the country’s recalcitrant cable companies.

    A few municipal projects could be the trigger to getting better services across the country. This is a model that could work in many other fields as well.

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