Tag: Australia

Startups become a Sydney mayoral issue

Encouraging tech startups becomes an issue in the Sydney mayoral election

There’s a mayoral election pending in Sydney and the talk of the city becoming a startup hub is becoming one of the issues.

Over the next few days I’m hoping to interview each of the four major candidates on their policies regarding how they see Sydney competing against the likes of Singapore and Shanghai, let alone San Francisco or London.

In 2009, I was working with the New South Wales state government on their Digital Sydney project which looked at how the state capital could become a global centre, one of the things we found was that the city had many of the attributes successful creative centres had – diversity, tolerance and access to talent.

That project died in the face of bureaucratic ineptitude but the idea still kicks around with last week’s launch of the NSW Government’s Jobs For The Future report which, despite its opening thirty pages of buzzwords and waffle, contains some serious analysis of the state’s reliance on inward facing service industry jobs.

Refreshingly, the NSW Government strategy looks beyond the current mania around tech startups based on the Silicon Valley venture capital model – something the Federal government’s Innovation Statement failed to do – and discusses how to encourage growth and investment in other emergent sectors both inside and outside the inner city startup communities.

While Sydney can be an attractive place to live for the digital elite, it falls down in a number of areas with property being among the most expensive in the world, telecommunications being costly and unreliable coupled with a complacent corporate sector and a stingy investment community.

Making the city more attractive is going to take a number of initiatives that including easing the cost of doing business, improving links between academia and industry along with tapping into Sydney’s diverse immigrant populations.

Some of these factors are within the City of Sydney’s purview but most of them are state or Federal matters. By definition this limits what local politicians can do.

Which doesn’t mean they shouldn’t try to do them and it’s good to see these topics have become issues in the local elections. For Sydney though, one suspects it’s going to business as usual until The Lucky Country’s luck runs out.

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The moment Australia’s innovation dreams died

The day Malcolm Turnbull embraced negative gearing was the moment his innovation agenda died

It started so well but has ended in a whimper. I’ve just filed a story for Diginomica on how Australian’s Innovation Agenda died, strangled by the nation’s complacency.

While writing it, I found the moment Prime Minister Malcolm Turnbull’s credibility evaporated. At a media stunt in suburban Sydney, Turnbull and his treasurer Scott Morrison visited the Mignacca family who own two speculative properties and had just bought another for their one year old daughter.

That stunt illustrated everything that is wrong about modern Australia’s investment and taxation policies. The Mignacca’s could be improving their skills and education, they could be setting up a business to provide the jobs and growth that was the cornerstone of Turnbull’s re-election campaign or they could be developing innovative new products for their industries.

Instead they are speculating on property – and borrowing heavily to do it.

The Mignacca’s are doing nothing wrong and are responding rationally to the incentives in Australia’s tax system as well as doing exactly what their peer and parents did, speculating on property to secure their retirement.

Not that this strategy is without risk, like 85% of the Australian workforce both of the Mignacca’s jobs are in domestically facing service industries and in the face of an economic downturn the young couple could find their properties falling in price at the very time they can’t afford to keep them.

In ditching the Innovation Statement and adopting the comfortable rhetoric of his predecessors, Turnbull betrayed the Mignaccas, Australia’s economy and his own stated view about the nation’s property addiction.

Moreover, he killed any credibility he had in being able to recast Australia’s economic future.

One suspects history won’t be kind on Malcolm Turnbull and the day he travelled to the Mignacca’s home will go down as the moment he lost the future.

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A tale of managerial hubris

The failure of Australia’s 2016 Census is due to arrogant management, not bad technology

Twenty-four hours after the 2016 Census website collapsed, the Australian Bureau of Statistics’ reputation is in tatters as the organisation blames hackers, denial of service attacks and failed routers for the debacle.

While there’s many lessons to be learned from this tale, not least the importance of getting your social media team on board, the key takeaway from this embarrassing saga is to show some public humility and not dismiss informed critics.

Technology was not the problem at the ABS, an arrogant management is what caused the Census collapse.

Given the poor accountability of Australian management it’s unlikely anyone’s career is going to suffer as a consequence of this debacle but it’s a further dent to the reputations of both IBM and the ABS. Quite frankly they deserve it, if only for their failure to listen to the community.

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How Australia might miss the smartcities movement

A disempowered public service, fragmented government and an insular business culture threaten to stymie Australia’s adoption of smart city technologies

On Monday I attended the Australian Israel Chamber of Commerce KPMG Internet of Things (IoT) & Smart Cities Briefing in Sydney’s Darling Harbour. It was an event that left me worrying about how the nation’s governments are dealing with the connected society.

The event was held under the Chatham House Rule so I’m unable to attribute quotes or identify the views of individual speakers however the conversation was mainly around the difficulties of getting Australia’s three levels of governments working together and their reluctance to share data.

Probably the most worrying comment was how Australian public servants aren’t empowered to make decision that would take advantage of smart cities technologies.

When politics eats everything

If anything this view illustrates a deeper problem in Australia where public policy and decision making is subsumed by politics. Exacerbating this is the insistence of opportunistic ministers and their chronically unqualified party advisers to micromanage decisions that should be made by qualified professionals.

A fear of delegating decision making quickly morphs into tendency to avoid accountability with decisions being made behind closed doors and contracts hidden from public view by the ‘Commercial In Confidence’ fiction that put contractors’ privileges over the public good.

That reluctance to share information also feeds into implementing smartcity technologies. With data being jealously guarded by government agencies, city councils and often corrupt ministerial offices, the currency of the smartcity – data – is locked away rather than used for the public good.

Accidental releases of data

One of the participants pointed out how in Australia government data is often released by accident and the siloing of data between government agencies and private contractors makes access difficult.

The real concern though was at during the question and answer session, in a response to a question from the writer asking if Australia’s business and government leaders are oblivious to the global changes, one of the panellists stated “boards are now convinced digital has a seat at the table.” That is hardly assuring.

Probably the biggest concern though for this writer was after the lunch. One of the other attendees, the CEO of  a major supplier to Australian councils, mentioned how the equipment he supplies was ‘pretty dumb’ and he was closing down the overseas operations of his business as they were losing money.

Inward business cultures

That inward looking attitude of catering to a domestic market that’s oblivious to global shifts seems to be almost a parody of the management books that talk about Kodak’s demise earlier this century or the fate of buggy whip manufacturers a hundred years before. Yet that is the mindset of many Australian businesses.

Exacerbating industry’s insular mindset, Australia’s planners seem to have a fantasy that the nation’s cities are like Barcelona rather than Chicago. The truth is Australia’s car dependent cities have more in common with their North American counterparts than European centres, something planners are reluctant to admit.

Being car dependent doesn’t preclude effectively applying smartcity technologies, in fact there might be more benefits to sprawling communities as vehicles becomes connected and driverless automobiles start appearing. However applying what works in Amsterdam to Sydney, a city that is more like Los Angeles, is probably doomed to failure.

“A smart city needs smart people to succeed” is a mantra I’ve heard a number of times. The question right now is whether Australia has enough smart people in positions of power to execute on the opportunities in the 21st Century. The roll out of smartcities may prove to be an early test.

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Can innovation save Australia?

Keeping the lucky country lucky

This is the prepared version of my speech at the Cloud Crowd “Can Innovation Save Australia” debate. I was on the affirmative team, even though in truth I’m probably close to the negative side.

Australia truly is the lucky country. We entered the Twentieth Century as one of the richest countries on earth and at the turn of millennium we remained so.

The first fifteen years of this century have been equally kind, however that prosperity has been built on a mining boom and an ever growing property bubble.

Now those foundations are slipping – the mining boom is over and Australians have became the most indebted people on the planet as housing loans put an increasing burden on Australian families, a situation that is not sustainable.

The three Bs of Australian Business

Making matters worse, the good years of the last three decades have seen Australia’s business community become inward looking and complacent, as one of my colleagues recently wrote Australian managers are obsessed with their “Three Bs” – Bonuses, BMWs and their Balmoral Beach Club memberships.

Australia though has a fine history of invention and innovation, we’ve seen ideas ranging from the stump jump plough and Hills hoist through to the flight data recorder and Cochlear ear implants change the world.

Cochlear itself forms the centre of an Australian hearing technology hub at Macquarie University which brings together university researchers, private sector R&D and some of the world’s best medical specialists to form a globally competitive centre of excellence. We can do great things.

Starting from behind

However we are starting a long way behind the rest of the world. Not only is Silicon Valley speeding ahead but so too are countries as diverse as the UK, Israel and Singapore. One of the understated stories in Australian media is just how heavily China is investing in its pivot into a knowledge and innovation based economy. Others in our region like Japan, South Korea, Taiwan and Malaysia are already well down the path of moving to economies based on 21st Century technologies.

All of these countries – their governments, their business leaders and the communities – have recognised success in the Twenty-First Century will depend upon investment in education, research, development and businesses that harness the great powers being unleashed by today’s technologies.

This is where Australia’s opportunity also lies. In the 19th and 20th Centuries the country was the beneficiary of technologies like the steam ship, the telegraph, refrigeration, electrification and, at the end of the Twentieth century, the great global financial deregulations. We truly were the lucky country.

Staying lucky

Remaining lucky in the 21st Century is going to take more than riding on the back of sheep, the end of coal train or surfing the wave of easy credit that crashed over our economy in the 25 years after 1990. We are going to have to be smart, canny and adventurous.

Australians though have shown they can grasp opportunities and with government policies that favour innovation over speculation, investment over ticket clipping, a business community that pulls its weight in research and a community that values education at all levels we can do it.

So yes, Innovation can save Australia but we as a nation have to be prepared to work at it and change many of our current ways of thinking.

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Hubris and the cloud

Hubris seems to have caught Amazon Web Services as their Sydney data centers are knocked out of action

A few months back I spoke to Amazon Web Services’ Chief Information Security Officer Stephen Schmidt about how his company was expanding in Australia and East Asia.

One of the questions I asked was about the Australian footprint where all of AWS’s services are based in Sydney. Many of the company’s customers have questioned the suitability of that setup.

Schmidt was dismissive of the need for data centres outside of Sydney to serve the Australian market saying, “the Australian footprint is largely based on what the customers tell us. Right now they are happy with the way things work in Sydney, we have POP locations in other areas for edge access.”

“What we hear from customers is the network connectivity between Melbourne and Sydney is very good,” he added, “it’s really irrelevant whether you’re based in either city.”

During the storms that hit Sydney last week those words came back to haunt AWS as their data centers were knocked out of action.

Not a good look and now one suspects a Melbourne based data center, or at least some redundancy down under, is now higher on AWS’s to-do list.

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Invite only collaboration

Can a council of wise men build a new Silicon Valley? TechSydney believes it can.

The success of Silicon Valley is partly based on the sharing of information. Can a closed group of business leaders replicate that success?

Currently I’m in the United States interviewing Australian startup founders who’ve moved to the Bay Area on why they’ve chosen to move their businesses in Silicon Valley.

Naturally there’s a whole range of reasons for relocating across the Pacific – for some most of their market was in the US, for others it was the accessibility of investors while for many the move was always part of their plan to go global.

A place you fall in love with

The almost unanimous comment though from the founders was one of the attractions of the Bay Area are the support networks, “It’s a place you fall in love with straight away – it’s the people and the attitude,” says Holly Cardew.  “People ask what can I help you with.”

Cardew, the founder of image management service PixC, sums up the consensus on the Bay Area business culture of ‘paying it forward’. Almost every entrepreneur who’d moved to San Francisco mentioned how the question “how can I help you?” was key to building a network and finding customers, staff and investors.

That openness to helping the ecosystem was greatly appreciated by Carl Hartmann, co-founder of logistics startup Temando. “I’m here today because people were kind enough to pay it forward,” he states.

Since then Harmann has become one of the ‘go-to guys’ for Australian entrepreneurs arriving in San Francisco and almost everyone we spoke to mentioned Carl as being a great help for them in obtaining initial introductions.

Building a community

Those introductions and helpful acts are essential in a community where the most valuable asset is the people, not just investors but the entire complex ecosystem of coders, lawyers, publicists, designers and various other disciplines essential for an industrial hub to thrive.

Which raises the question about yesterday’s announcement of the TechSydney initiative, a project claiming “to address the Sydney innovation ecosystem’s greatest challenge: collaboration.”

This is a good idea, and one this writer was involved in seven years ago with the failed Digital Sydney program in 2010 which aimed to bring together the disparate groups that make up Australia’s disparate tech and digital media sectors.

Government failures

Digital Sydney failed because the state government is poor executing at such initiatives so the fact TechSydney is being led by experienced startup founders, investors and advisors should give hope this attempt would be more successful.

However, TechSydney’s press release quickly dispels that hope with the opening line.

Australia’s most successful startups and global tech giants, including Atlassian, Airbnb and Airtree Ventures are backing a new not-for-profit aimed at turning Sydney into Australia’s Silicon Valley.

The “Australian Silicon Valley” line shows a focus on the current Bay Area tech startup model funded by venture capital and seed investors who are happy to forgoe profits in the hope of big capital gain when the business is acquired or goes public – the Silicon Valley Greater Fool model.

Silicon Valley itself is pivoting away from this model with businesses across the Bay Area now frantic to at least have the illusion of being profitable or on the path to making money. In narrowly promoting the tech startup model TechSydney seems to be trying to catch a wave that has already broken.

Slamming the door

The main worry from the TechSydney announcement though is that it seems to go against the open door policy that makes Silicon Valley so successful. Rather than encouraging questions and new entrants, TechSydney is slamming the door shut with only the successful and well connected invited.

The group will launch at an exclusive invitation-only Dinner on May 30 at the Powerhouse. Sydney’s top 200 technology companies will be in attendance. The first 100 have already been invited, and the group is now taking applications for the next 100 attendees at TechSydney.com.au, and is urging companies to register their interest today.

In some respects this is to be expected of the Sydney business community – the city’s industry is based upon the Rum Corps model of the colony’s early days where success is based upon connections and influence rather than being open and collaborative. This attitude underpins the ‘mates culture’ that is critical to acquiring power and wealth in New South Wales and across Australia.

With an attitude of having an ‘invite only’ group leading the push the hopes of creating an ‘Australian Silicon Valley’ are doomed. By locking out new entrants or dissenting thinkers, it’s impossible to create a vibrant hub.

Creating an open mindset

For Sydney, or any other Australian city, to succeed as a global hub in any industry that legacy of the Rum Corps, the mates network, needs to be suppressed and a more open, collaborative mindset put in place.

TechSydney can do that if its leaders choose to do so. Hopefully at their invite only meeting at the end of the month the wise men of Sydney’s tech elite will decide that an open initiative that welcomes newcomers and tolerates new ideas is the best opportunity to make the city a global leader.

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