Sydney | Paul Wallbank - Communications Professional

Sydney’s digital humiliation

Google’s decision to pull out of Sydney’s White Bay startup hub project throws the NSW government’s tech industry plans into disarray.

It’s hard not to see Google’s decision not to move the mooted digital hub at Sydney’s White Bay as nothing short of a humiliation for the New South Wales state government.

The White Bay project is the centrepiece of the NSW government’s startup tech startup strategy and Google were hoped to be the anchor tenant for the refurbished power station that’s been abandoned for over thirty years.

With Google’s Sydney office currently overflowing and its staff numbers expected to increase from around 1500 today to 10,000 over the next few years, the White Bay precinct with its cathedral like power station made some sense.

For the startup community, having something similar to the London Google Campus would have been a valuable part of the city’s ecosystem.

However the location is in a traffic blackspot served by a woefully inadequate and unreliable bus service with a series of major road projects planned to start in the neighbourhood over the next five years which forced Google to rethink their plans.

Now it looks like the White Bay project getting underway this year is doomed and meanwhile the Victorian state government is spending big to attract tech companies to Melbourne.

This is far from the first time the NSW government has had ambitions for a digital hub and again a project stumbles in the face of poor planning by the NSW government.

We don’t know if the Victorian government has made an offer to Google yet, but it wouldn’t be surprising if they have. It could be New South Wales is about to pay the price for its lack of vision and forethought.

The limits of how governments can help startup businesses

The City of Sydney elections illustrate how limited governments are in promoting a region’s startup sector.

Over this week I’ve been posting a series of interviews with the candidates for this week’s Sydney Lord Mayoral election. All of the teams have interesting schemes and ideas on how they can improve the city’s profile as a global tech centre.

While each team’s plans are worthy, it’s worth asking exactly what governments can do to make their communities more attractive to businesses and whether short term subsidies and incentives can help.

There is some evidence they can, prior to San Francisco changing its tax rules the city took second place to Silicon Valley in the southern Bay Area. In the last ten years, the city has become the focal point for the tech industry.

However there is a counter argument that San Francisco benefited on a generational shift of lifestyle preferences away from the leafy suburban lifestyles of Palo Alto and San Jose to the grungy but walkable communities of the Mission and SOMA.

The Bay Area though is a special case, Silicon Valley’s success as a tech hub is based upon massive Cold War tech spending that drove the region’s industry and its that high level support that probably tells us more about government support.

In the case of London and Singapore, the successes have been due to the national governments putting in broader economic reforms and incentives. Also their proximity to Europe and East Asia respectively has made both cities attractive.

On balance it’s those broader economic factors that make regions attractive as industries clusters – local incentives count little compared to access to factors like markets, capital and skilled labour. Taxation is, at best, a secondary issue.

The biggest challenge for Sydney, and most Australian cities, is the the crippling cost of property. In 2013, staff.com released a survey showing Sydney to be second only to Zurich in the cost of establishing a startup.

In many respects, the cost of property doesn’t really matter to prosperous industry hubs – San Francisco, London, Singapore and New York are all eye wateringly expensive and yet they still thrive – however all of those cities have better access to capital and markets, if not labour, than Sydney.

Addressing Sydney’s chronic shortage of affordable accomodation is firmly in the state and Federal governments’ remit and beyond giving property developers a green light to build high rise apartments neither level of government has shown any interest in addressing it.

Similarly, the tax structures which penalise Australian employees of high growth businesses and dissuade investment in early stage ventures are totally the responsibility of the Federal government and it’s hard to see that changing in the term of the current dysfunctional administration.

The relative powerlessness of local governments leaves initiatives by the City of Sydney limited in scope and schemes to promote the city or offer incubator space are peripheral to the factors that encourage the development of a global industrial centre.

Ultimately though, the question has to be how much any government can do to create a Silicon Valley, factors such as labour availability and access to capital come down as much to the community’s attitudes and business’ risk tolerances.

So perhaps we focus on what governments can do for business. Maybe just providing a level playing field can be the best we can hope for.

Sydney’s Mayoral Tech Race – Lord Mayor Clover Moore

Sydney Lord Mayor Clover Moore’s team sees a liveable city as being a key part of building a tech and startup sector.

Leading the City of Sydney’s Lord Mayoral race is incumbent Clover Moore. Long a thorn in side of the state’s political and media establishments, the independent Moore has safely held the city’s Lord Mayorship since beating the seemingly unbeatable Labor candidate in 2004.

Since being elected, Moore has been focused on Sydney being a ‘living and sustainable city’ with the Sydney 2030 plan being the focus of her administration. This election’s platform builds on that scheme.

While acknowledged in the 2030 strategy paper, the tech sector really didn’t feature in that document – something that reflects how late all levels of Australian government have been in recognising the industry’s role in economic development.

However in recent years the council has been developing its programs, including the Startup Action Plan and on the Clover Moore team for this year’s election Jess Scully, director of the annual Vivid Ideas festival and organiser of TEDxSydney, is the spokesperson for the campaign’s tech and cultural platforms.

“The crucial things are access to talent and space,” Scully told me when I interviewed her a few weeks ago. “There are reasons why people are attracted and drawn into the gravity of precincts in the heart of the city.”

Scully cites the city’s working with property developers to allocate space for startup hubs in new developments, the council’s support for various events and the support for infrastructure projects, not least the contentious bikepaths, to improve the city’s liveability.

Like the rest of the candidates’ teams, Jess provided the following answers to our questions.

What are your policies relating to encouraging tech startups?

“Clover has been very proactive in supporting the start-up sector and encouraging co-location, which we know amplifies the benefits of having a lot of bright minds working together. After consulting with the sector, the City adopted a Tech Start-Up Action Plan in March, which has the aim of building a robust start-up ecosystem by offering access to affordable space, promoting dense agglomeration and increasing access to funding and markets.

“Of course, it’s easy to say these things – but under Clover’s direction, the City of Sydney is already taking action – one major step has already been taken. We know Sydney can be an expensive place for start-ups to access affordable space, but in the future we want the knowledge economy well represented in the heart of our CBD. The City has negotiated a Voluntary Planning Agreement with Lend Lease to secure 3900 square metres on three floors in a prime spot on George Street at Circular Quay for tech start-ups.

“This new development will put tomorrow’s tech and start-up leaders right in the centre of the action, closer to potential clients and partners in the corporate world. This new CBD tech hub will provide affordable space for businesses at different stages of development, co-working spaces and community space.”

What do you see as Sydney’s strengths in this sector?

“Sydney benefits from its own gravity – we’re home to over two thirds of Australia’s start-up community – we’re the natural home for businesses that want to scale up and go global from the outset. We’re a global city that’s attractive for talent, and we’re the base for the creative industries, finance and services sectors, so being located here allows you connect with potential collaborators, clients and investors. Other regions have to offer more incentives to overcome the natural advantages that Sydney offers start-ups.”

What are we not doing well at the moment?

“We’re still young: Sydney has a relatively new tech start-up ecosystem and we’re struggling with two challenges: skill shortages in ICT, and in attracting capital to scale-up.”

What are we doing well?

“I think our start-up ecosystem in Sydney is one of the most supportive and collaborative in the world: I’m so impressed by the generosity and knowledge sharing that goes on in places like Fishburners, Stone & Chalk, Blue Chilli.

“It’s also fantastic to see how engaged our start-up success stories – the founders behind Atlassian, Spreets, Freelancer, and the incredible team at Blackbird – and how committed they are to leading the next generation, being present and offering support, to raising the tide and growing the sector here. I have been fortunate to work with Blackbird Ventures for the last two years on The Sunrise, a conference they fund and drive to get students, aspiring entrepreneurs and emerging founders to connect with new thinking and with each other. Their work and their investment fund are going to be transformative.

“From my observations around the world, this generosity and level of support is just remarkable – they’re leading the way in helping Sydney deliver on our potential to be a global start-up and tech hub.”

How do you see the City’s relations with state and Federal government affecting current efforts?

“The City has differences with other levels of government on some issues but tech start-ups is not one of them – we have a good relationship with other levels of government on tech start-ups. In particular, we are working closely with the NSW Government on innovation and new initiatives.”

Currently Victoria and Queensland are doing better at attracting businesses. Should we do anything to counter that and, if so, what?

“The City of Sydney is the nation’s tech start-up hub with two thirds of Australian start-ups. The City of Sydney’s economy also grew at 4.5 per cent per annum in the last term – outstripping the national growth rate. Other states use incentives to try and attract businesses to counteract the fundamental strengths of Sydney as the nation’s global city. Our ecosystem is 6 times larger than Brisbane and 55% bigger than Melbourne.

“Working on the fundamentals that underpin the strength of a tech start-up ecosystem is the key for a successful ecosystem in Sydney – not picking winners.”

How can Sydney compete globally against cities like Singapore, Shanghai and even Wellington?

“Sydney is consistently ranked as one of the leading global cities – we are one of the Asia-Pacific’s finance hubs and host high-quality ICT, professional and business services, educational institutions and creative sectors. Sydney also has high liveability which is important for attracting and retaining talent.

“In addition to improving the capacity of our tech start-ups ecosystem to support local, innovative companies become global companies, we need to address some of the other issues affecting the functioning of our economy and society such as the affordable housing crisis.”

The Clover Moore team comes with the advantage of incumbency despite the hostility of Macquarie Street and the performance of the City of Sydney and the growth of the tech community under Moore’s administration has been remarkable.

How much of this is attributable to Moore’s leadership is another question, however her policies are similar to those of other successful tech cities like San Francisco, London, New York, Wellington and Singapore.

Singapore and Wellington probably illustrate the weakness of Moore’s leadership in that both the island state and New Zealand don’t have a level of provincial government whose parties are hostile to independent administrations as is the case where successive Labor and Liberal governments have interfered in the City of Sydney’s operations.

That however hasn’t stopped Moore from investing in the city’s infrastructure and making it a place attractive to startups and tech businesses. Making the city a better place to live and work may be Moore’s biggest attraction for the startup sector.

Sydney’s Mayoral Tech Race – the Liberal’s Christine Forster

The Liberal tech platform for the City of Sydney elections is ambitious but will it be enough to make Christine Forster the city’s mayor?

Of all the contenders in the City of Sydney elections, the Liberal Party’s Christine Forster seems the candidate with the best chance of beating incumbent Clover Moore. For the city’s tech industry and startup communities, the Liberals have made a strong pitch.

At the last council election in 2012, the Liberal Party’s Edward Mandla – who has since defected to the Sydney Matters group – was the second placed candidate with 16% of the popular vote after incumbent Clover Moore’s 51%. With the voting rules changed this year to allow business owners to vote alongside residents, Forster is expected to pick up a substantially bigger proportion of the poll

Like Sydney Matters’ Angela Vithoulkas, Christine Forster sees Brisbane as being the example Sydney should be following in encouraging startups. In her detailed tech policy Forster laid out what is probably the most ambitious agenda of the major candidates.

The Liberal policy paper points out Sydney is home to nearly two thirds of the Australian startup community but doesn’t rate well internationally. She proposes addressing that through establishing a Sydney Emerging Entrerpeneurs Program to provide support and small grants.

Forster promises an incubator offering affordable office space based on ‘The Capital’ in Brisbane setting up a working hub to address the crippling commercial rental costs and establishing global ‘launching pads’ for local entrepreneurs in key overseas centres.

“To help promote Sydney to US companies wanting to establish an outpost to expand into Asia, we will establish an office in San Francisco, and investigate further offices in Guangzhou and Singapore,” Councillor Forster is quoted in the policy’s media release as saying.

Of the standard questions we asked the four major candidates, Cr Forster’s team answered them in bullet points;

What are your policies relating to encouraging tech startups?

I will commit to Council providing affordable office space for start-ups
I plan to establish an Incubator, similar to ‘The Capital’ in Brisbane
I will establish a ‘Sydney Emerging Entrepreneurs Program’ providing practical support and small grants to the city’s best emerging start-ups. (One of these already exists in Brisbane.)
Appoint a Digital Director for the City of Sydney
Set up a ‘City of Sydney Digi-Challenge’ to help solve local council issues though digital leadership
Have clear goals for digital policy achievement benchmarked against globally accepted measures.

What do you see as Sydney’s strengths in this sector?

Sydney is Australia’s most visible global city. People and businesses want to come here to live and work.
Sydney is home to an educated, technically literate population and three world class universities.
Sydney already has a strongly entrepreneurial culture and outstanding local success stories – think of Atlassian and Freelancer.com.

What are we not doing well at the moment?

Lord Mayor Clover Moore doesn’t intuitively see business as part of the community – she treats business as the enemy
Council has not embraced new technologies, it is not business-friendly and dealing with it is notoriously bureaucratic, expensive and time-consuming
Clover has mishandled opportunities for the community because she doesn’t understand what businesses need. One notable example is Council’s failure to secure an anchor tenant for its Oxford St properties
Business contributes around 80% of rates to the City of Sydney but the Council has not been living up to its own KPIs.

What are we doing well?

Not a lot. We’re trading on our name and on the fact that Sydney is physically beautiful and well located.

How do you see the City’s relations with state and Federal government affecting current efforts?

Any relationship needs to be more collegial than it has been. There are situations where I disagree with tech and innovation policies at the State and Federal levels but where these arise, I prefer to negotiate to achieve a solution. Clover has made much of “taking the fight up” to other levels of government – I don’t believe it’s a fight, it has to be a negotiation.

Currently Victoria and Queensland are doing better at attracting businesses. Should we do anything to counter that and, if so, what?

I don’t believe we should think in adversarial terms – I want Australia to attract more business.
But that doesn’t mean Sydney has nothing to learn from Brisbane or Melbourne.
I want to set up a ‘Revive Oxford St’ taskforce bringing together residents, business, local and state government representatives to build a strategy – at the moment I’m thinking a QVB-style development in which we offer organisations with experience reviving retail precincts an opportunity to tender on how they could sensitively revive this important cultural precinct
I want to establish a dedicated office in our sister-city of San Francisco to promote Sydney’s potential as a stepping-stone for tech companies interested in expanding into Asia. The office will provide advice on establishing an office in Sydney.
I will also improve Council’s online services. I’ve got costings to show that with 10% of services moving to digital we could cut costs by $5-$10m p.a. That money could then be reallocated to community projects in each of the eight villages.

How can Sydney compete globally against cities like Singapore, Shanghai and even Wellington?

By making it easier to do business for a start, but also improving the city’s amenity. One of my policies is a simple but important one – increase the number of bins and make recycling easier in public areas to get rubbish off the streets.
Facilitate the establishment of a ‘SydneyOne’ ticket that covers all local arts, culture and tourism destinations. If Singapore and London can do this – and make it available online – so can Sydney.
We are also investigating ways of delivering free Wi-Fi in public areas.

How does your tech industry policy fit in with other key Sydney employment sectors like the creative industries, financial services and education?

I want it to cease to be a ‘poor relation’. Sydney has a global reputation in finance, the arts and education. Walk through Martin Place and look up; walk through Sydney University or UTS and look around you; go to the Opera House. These activities are so obvious as to be stereotypical. I want people to think of our tech sector in the same way. I want there to be 10 Freelancer.coms, not one.

Christine Forster and the Liberal Party have an ambitious program to place Sydney as global centre and, given the Liberals also hold government at state and Federal level, their platform does hold the promise of improved relations between the city council and other layers of government.

However the state government has been very slow in identifying the tech sector as being important to the regional economy and its focus on property development makes one wonder what the priorities would be if every level of government was dominated by the Liberals – the decision to sell the Australian Technology Park over the protests of the tech community speaks volumes on Macquarie Street’s attitude towards the sector.

At the Federal level, the innovation agenda seems stalled and confused with little likelihood of any reforms to address the causes of Sydney’s high property prices being addressed or further changes to the tax system to encourage investment in new technologies and businesses.

If anything, the declining fortunes of the Liberal Party at a state and Federal level may well damage Forster’s local campaign and detract from her message. The message though does flag an understanding at the local government level of the importance of the tech community to the city.

Sydney’s Mayoral Tech Race – Sydney Matters’ Angela Vithoulkas

Sydney Matters has a strong business and tech focused platform for the city’s mayoral election.

In the second of our series on the tech policies of the Lord Mayoral candidates for the upcoming City of Sydney elections, we look at the policies of the Sydney Matters team, the independent business focused group.

Sydney Matters is led by Angela Vithoulkas, who’s operated a central Sydney coffee shop with her brother for 25 years. Angela, who is a friend of this writer, ran as a Lord Mayoral candidate in 2012 and won election as a councillor.

Angela’s team includes the founder and editor of Startup Daily, Mat Beeche, as well as Edward Mandla who was elected to council as a Liberal candidate but defected from the party earlier this year.

The Sydney Matters platform is the only one that has a specific tech policy which reflects both Angela’s and Mat’s backgrounds and interests in technology and how it affects the business sector.

What are your policies relating to encouraging tech startups?

As Lord Mayor I will work with Tech Sydney, Startup Aus, FinTech Australia and other key players. I would like to explore concepts like having a Chief Entrepreneur in Residence program at Town Hall – similar to what Advance Queensland recently announced.

What do you see as Sydney’s strengths in this sector?

“The People, in 2011 the startup scene we have in Sydney didn’t exist in the same way it does today – and it exists today because passionate people said I am going to change things.”

What are we not doing well at the moment?

“We are fragmented, we need closer connections – physical hubs where tech startups can collaborate, meet serendipitously, make it easier for them to do business with each other – proximity can be helped by the city looking at smarter real estate opportunities for the tech sector.”

What is Sydney doing well?

“The City of Sydney’s Tech StartUps action plan is a step in the right direction but we need to build on this and work in collaboration with other levels of Government to drive our tech startup industry forward.”

How do you see the City’s relations with state and Federal government affecting current efforts?

“To make inroads we all need to be on the same page and collaborating for the interest of the sector.”

Currently Victoria and Queensland are doing better at attracting businesses. Should we do anything to counter that and, if so, what?

“When I sat down with Mat Beeche who is on my ticket and asked that very same question, I was surprised by his answer – The stats show that NSW is actually performing a lot better than the media would have you believe.

“Sydney has attracted some huge tech companies to Sydney including data and analytics startup Qualtrics, valued at $1 billion that chose Sydney for its APAC operations.

“Fintech startup Acorns is in Sydney, HealthTech startup ClassPass is in Sydney, Dropbox chose Sydney, Market Research startup SurveyMonkey chose Sydney and most recently Social Media Snapchat chose Sydney to set up their sales operations office for the region.

“Our problem is that we perhaps are not being as vocal about the achievements of the NSW government who put in a lot of hard work behind the scenes to have these organisations choose our city as their destination of choice for expansion.

“What the City of Sydney needs to do is work closer with Macquarie street from a PR and Media perspective to change this perception.”

How can Sydney compete globally against cities like Singapore, Shanghai and even Wellington?

“By being more proactive and being an exemplar – Wellington does a great job of that.”

How does your tech industry policy fit in with other key Sydney employment sectors like the creative industries, financial services and education?

“Tech Startups sit across all industries including creative industries, financial services and education – so our policy is about them as well.”

Of the four candidates we interviewed, the Sydney Matters team probably has the most comprehensive tech strategy. It’s notable how they’ve paid attention to what other Australian cities – particularly Brisbane – have been cultivating their startup and tech communities.

Councillor Vithoulkas’ point about Sydney not marketing itself well is a fair point and that probably reflects more on the cultural differences between the harbour city and its interstate counterparts where Sydneysiders are far less likely to be cheerleaders for their cities than their Melbourne or Brisbane counterparts.

In many ways their strategy is not greatly different from existing council policy which in some ways is probably good for continuity for the business community.

Sydney’s Mayoral Tech Race – the ALP’s Linda Scott

The ALP candidate for the City of Sydney mayoral election has a raft of policies to promote the city’s tech sector.

A few weeks back I wrote about how the tech sector had become an issue in the Sydney Lord Mayoral election to be held on September 10.

Following that post, I approached the four major candidates to get their policies on how Sydney can do better in attracting tech startups to the city. The idea was to get an overview published in one the major newspapers but sadly my pitches were ignored.

However the issues raised are important to Sydney so over of the next few days I’ll publish each of the candidates’ responses to my questions along with any other conversations I’ve had with their teams.

The first candidate we look at is Linda Scott, the Australian Labor Party candidate. Councillor Scott was elected to the City of Sydney Council in 2012 and is a researcher at The University of Sydney and lives in the inner city suburb of Newtown with her husband and two young children.

“As a Labor Councillor, I moved that the City conduct a feasibility study into the possibilities for implementation of smart technologies for City infrastructure and services. The current Lord Mayor and her team voted against it, defeating the measure.

I’ve also held a start up Roundtable for City of Sydney start ups with Labor Ministers Chris Bowen and Ed Husic to hear ideas for how every level of government can improve our support for the start up communities.”

What are your policies relating to encouraging tech startups?

“As a Labor candidate for Lord Mayor, my Labor team and I are committed to delivering smart technology to the City’s infrastructure and services for the future.

“From more efficient watering of our parks to parking to better planned traffic flows, the Internet of Things has the potential to revolutionise our City – and it’s an opportunity we can’t afford to miss.

“We are committed to working with our start ups and universities to support the continuation and creation of Tech Startup precincts, and will ensure planning policies foster these precincts.

“Labor will also deliver a dedicated, City-owned work space to form part of a Tech Startup precinct and open up City spaces for tech startup networking events and will host an annual festival to promote Sydney as an international tech startup hub.

“If elected, we will explore establishing dedicated innovation and commercialisation ‘landing pads’ with our sister cities, and neighbouring and regional councils here in New South Wales.

“Labor will also work to support the continuation and expansion of existing university-based hubs and accelerators in the City of Sydney along with hosting an annual festival to promote coding among young people. “

What do you see as Sydney’s strengths in this sector?

“Our people. Sydney is a great global city, and rightly is the first port of call for international trade and investment. Many of our nation’s and the world’s major firms have their Australian headquarters based in Sydney.

“We have the critical mass of creativity, capital and access to services to provide fertile ground for tech startups.”

What is Sydney not doing well at the moment?

“The Lord Mayor has rejected Labor’s moves to embrace smart technology. It’s time for change at the City of Sydney.

“We also need more affordable space for start ups, and Labor is committed to delivering this.

What are we doing well?

“Sydney has great hubs and accelerators that Labor will continue and expand where possible.”

How do you see the City’s relations with state and Federal government affecting current efforts?

“As a Labor Councillor, I already work closely with my state and federal colleagues and governments to ensure I secure what’s best for the City of Sydney. The state and federal governments have the financial strength and capabilities to assist the City in delivering its tech startup strategies.

“For example, a federal Labor Government committed to create a 500 million dollar Smart Investment Fund and a nine million National Coding in Schools program – both measures I will continue to secure for the future.”

Currently Victoria and Queensland are doing better at attracting businesses. Should we do anything to counter that and, if so, what?

“Sydney’s strength and appeal as a tech startup hub should be the size and diversity of creativity, capital and access services it can achieve.

“With all the measures listed above, and working with stakeholders, Labor is committed to doing better for the future of our start ups.”

How can Sydney compete globally against cities like Singapore, Shanghai and even Wellington?

“Our City needs to continuously increase its exposure to new challenges and new ideas from around the world as well as at home.

“Exploring opportunities for establishing innovation and commercialisation landing pads with sister cities around the world as well as neighbouring and regional councils will be an important first step in that effort.

“Most importantly, increasing the availability of affordable work space in the City of Sydney will also be critical, and attracting angel investors to Labor’s annual showcase event in the City.

How does your tech industry policy fit in with other key Sydney employment sectors like the creative industries, financial services and education?

“Labor is committed to the creation of a fun, fair, affordable and sustainable City for the future for all businesses and residents. “

It’s hard to see the Labor Party getting a great deal of traction in the council elections, Scott herself only received ten percent of the mayoral vote when she ran for the 2012 election and was the only ALP councillor elected.

The benefit though of the Labor ticket is that Scott’s positions fit nicely with her party’s state and Federal. However, given the party will remain in opposition at both levels for at least two and a half years – although nothing is certain in the farce that Australian Federal Politics has become, that co-ordination means little for the City of Sydney.

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.

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.

Creating a retail community – A tour of Microsoft’s Sydney flagship store

Microsoft hopes to be able to build a community around its Sydney flagship retail store

Microsoft today opens the doors to its first flagship store outside of North America in Sydney, Australia. A look inside the project gives some insight into the company’s retail strategy.

Situated in Westfield’s Pitt Street Mall, the store promises “cutting-edge retail and experiential spaces that allow consumers to get hands on with products in an immersive way.” What’s immediately notable is the lack of obvious security with all the devices on display being available for customers to pick up and walk around the shop with.

Most of those devices showcase Microsoft’s various projects and alliances. Everything from XBoxes running Minecraft to Lumia phones are on display along with a range of laptops from partners such as Dell, Toshiba and Lenovo.

Notable among the devices is are the Surface Book and Surface Pro 4 along with the Microsoft Band 2 taking place of pride in the displays. As with everything else, customers can slip the wriststaps on and walk around with them. Microsoft’s representatives were coy on how they will prevent the less honest walking out the store with them.

Acting as a store greeter, the Answer Desk is the hub of store where representatives direct traffic whether it’s technical support – which like the Apple Genius Bar is provided free – sales, or directions to events in the upstairs community theatre.

Welcome to the Microsoft Store Answers Desk

Community is a big theme in the store and the company announced $4.8 million in software and technology grants to 11 not-for-profit Australian organisations to coincide with the shop’s opening.

That emphasis on ‘community’ is reflected in this quote from the company’s press release;

“Our new flagship store is here to showcase the very best of Microsoft to the local community and we are delighted Sydney has been chosen as its home,” said Pip Marlow, managing director, Microsoft Australia. “This is a key part of our commitment to delivering a truly interactive retail experience that gives customers, partners and community organisations the opportunity to see, experience and do great things, all made possible by Microsoft technology.”

Pip Marlow sees the upstairs community room as being an opportunity to engage with various school, business and technology groups. The space itself is a little cramped, however it can be isolated from the store’s general hubbub, unlike the Apple Store’s equivalent space.

Overall the store is modernistic but somewhat cramped and should the store be successful congestion is going to be a real problem, particularly around the Answer Desk and the narrow stairwell which, like its Apple competitor two blocks away, features a translucent stairwell.

In comparison to both the nearby Apple and Telstra stores, the Microsoft Showcase is surprisingly low tech with its retail experience. While the assistants will have mobile Point Of Sale terminals there’s little in the way of location technologies and contactless payments.

Overall the Microsoft Store comes across as a touch crowded and, dare one say, a little old school retail. As a showcase for the company’s products, it’s probably no more impressive than those of the better retailers.

However if Pip Marlow’s aim of building a community around Microsoft’s products is successful, that could prove to be the long term winning strategy for the company.

Riding the slowkansen

Taking the long route between Newcastle and Sydney via the Broken Bay ferry

Newcastle, a 160km north of Sydney is a drive easily done in less than two hours but for masochists and commuters there’s the three hour train trip affectionately known as the shitkansen by the locals.

The train trip itself has parts that are genuinely spectacular as it winds through the hills and rivers of the New South Wales’ Central Coast, albeit at speeds that are slower than in the 1933 timetables.

One of the reasons for the slow and spectacular trip is the Hawkesbury River and Broken Bay and that presents a natural barrier between Sydney, the Central Coast and Newcastle.

That natural barrier also presents an opportunity for a third, prettier route between the two cities using the private ferry service that runs between Central and Sydney’s northernmost suburb of Palm Beach.

Catching the slow train

Starting from the original Newcastle Railway Station, the trains run twice an hour during the day with one ‘fast’ service taking two-and-a-half hours and slow trips taking three.

Inside the trains things are relatively comfortable although quite grubby. The purple colour scheme are the refurbished older carriages, the original 1970s ones being in a fairly awful green. The news trains feature a modern vandal proof colour scheme although the seats are more uncomfortable for a three hour journey.

Another weakness with the train service is the spartan facilities, apart from graffiti covered toilets there are absolutely no passenger amenities so bringing your own food and drink is essential along with fully charged electronics as there are no power outlets available.

Amazingly, rather than improving the railway service to the state’s second biggest city the government plans to abandon the last five kilometers and replace the trains with buses. If there was one example of the 1960s thinking that dominates Australian politics, this venal and ill-thought out proposal is a wonderful example.

The Central Coast

While the parts of the ride between Sydney and Newcastle are spectacular, the stretch south to the Central Coast are the boring parts featuring little more than housing estates and low grade scrub until arriving at Gosford where the train runs alongside Brisbane Water until Woy Woy.

On alighting the train at Woy Woy, the immediate impression is a town that won’t win any heritage awards with its neglected main street and an anonymous shopping mall. All of which is a pity as its location between the hills and waterways is sensational.

Sadly there’s little reason to hang around so getting a bus to Ettalong is the best thing to do.

From Woy’s Woy’s dismal transport interchange – a fate that waits Newcastle’s truncated railway service – buses leave every few minutes for the 15 minute journey to Ettalong. If you have a Sydney transport travelpass then your ticket is valid on the private bus service.

Ettalong

If you’re stopping for lunch or a break during the journey, Ettalong isn’t a bad choice with a lot more coffee bars, restaurants and bakeries than the rather depressing choices at Woy Woy.

Since this writer’s last visit to the town three years ago when its centre was struggling with many empty shops; its fortunes have improved dramatically and it’s gone back to being a good destination for a day trip in itself.

Catching the ferry

The ferry itself is a twenty minute trip including a brief stop at the village of Wagstaffe. Its route winds through the sandbanks of Brisbane Water before getting to the open water of Broken Bay.

Midway across the bay, the ferry passes Lion Island and the mouth of the Hawkesbury River before entering Pittwater and the Northern Suburbs of Sydney.

Palm Beach

The wharf at Palm Beach is a classic wooden structure in a lovely location. Across the carpark and road is a general store, the Barranjoey House restaurant and a fish and chip shop.

For a takeaway meal, the fish and chip shop is nicer than the general store but you can enjoy either at the park alongside the ferry wharf.

For a sit down meal, Barrenjoey House has an expensive restaurant along with a bar with an outdoor seating area if you’re looking for a cold drink while waiting for a bus to Sydney.

The bus to Sydney

The bus back to Sydney takes about 90 minutes. It isn’t the most comfortable journey however the views of the city’s gorgeous Northern Beaches are worthwhile if you’re sittiing on the left side when heading south.

Once past Long Reef, the journey is mainly suburbia except when crossing the Spit and Harbour Bridges. A more interesting option that will add another hour to the journey is to switch buses at Warringah Mall and travel to the city via the Manly Ferry.

Taking the Slowkansen from Newcastle to Sydney isn’t the trip for anyone in a hurry with it adding up to two hours to an already slow three train hour journey but it’s a lot more interesting than the regular way to travel between the two cities.

Finding the smart money

Can events like Sydney’s AngelEd and London’s City Meets Tech help those cities become global startup centres?

Around the world startup communities are working to connect with local investors, in Sydney and London two groups are showing how it is done.

“We’re looking at turning idle money into start money,” is the aim of Sydney AngelEd says one of its founders, Ian Gardner.

Fitting startup companies’ capital needs into the established criteria of investment managers is an ongoing problem that AngelEd’s founders want to resolve. “We see startups becoming an asset class,” says Gardiner.

AngelEd, to be held on November 7, aims to educate high wealth investors and asset managers on understand the risk, benefits and hype around angel investment, particularly in tech companies.

The global search for funds

Startups around the world are struggling to engage with investors – in London, the local tech community has set up City Meets Tech to introduce British investors to high growth companies.

London should have an advantage in this field given its leading role in the global finance industry, however the challenge for the tech community is to find financiers who are prepared to accept higher levels of risk than mainstream investments.

“The City is generally risk adverse and doesn’t understand tech and tech start-ups,” says the City Meets Tech website, “though really it’s about understanding the business and managing risk though unfortunately innovation requires at least some risk.”

Australia’s trillion dollar superannuation system should similarly give Sydney an opportunity that to become a global centre however it suffers from a similar, if not worse, conservative investment culture to London’s.

Turning Sydney into a global finance centre has been an objective successive state and Federal governments for twenty years but the sleepy, comfortable and risk averse culture of Australian fund managers offers little to attract foreign investors or companies.

Much of Australia’s is problem is the insular nature of local fund managers with all but a tiny part of the nation’s retirement savings being put into the top local stocks, listed property funds or domestic infrastructure projects that are notable for their lousy returns and extortionate management fees.

Breaking that mentality is going to be the key to both AngelEd and the Sydney’s success as a financial centre.’

Competing with the world

While London and Sydney are struggling with the challenges of encouraging investors into the high growth sectors, cities like Singapore and New York are developing investor communities that are attracting entrepreneurs to their cities.

Many governments dream of being the next Silicon Valley and while it isn’t likely anyone can recreate the circumstances that led to Northern California becoming the computer industry’s world centre , a vibrant and accessible capital market will be necessary for any place hoping to be a global cnetre.

For Sydney and London, the success of initiatives like AngelEd and City Meets Tech may be critical for both centres’ future in the global digital economy.

New York celebrates its entrepreneurs with Made in NY

New York City shows how cities and nations have to promote their economic strengths

Part of a thriving industrial hub is having the business and skills that support the sector. If you’ve got them, you need to tell the world you’re open for business.

Somebody who is doing this well is New York City’s Office of Media and Entertainment which runs the Made In NY program.

While much of the focus of the program is on attracting film production, Made in NY recently branched out into promoting the city’s tech community boasting successful businesses like video sharing site Vimeo, tutor matching service Tutorspree and stock photography supplier Shutterstock.

Towards the end of the Shutterstock clip one of the staff mentions ‘drop bears’ – a little bit of Sydney argot creeps into the story.

It’s the Sydney connection that makes the Made In NY campaign so bittersweet, I was involved in setting up the Digital Sydney project for the New South Wales government.

While Sydney doesn’t have the size of New York’s or London’s tech industries it does share the advantage of being one of the most diverse cities in the world. The work of organisations like ICE in Parramatta is important in realising some of that potential.

That potential is huge – having sizeable communities of East and South Asian language speakers gives Sydney a real opportunity in the Asian Century.

Unfortunately most of those communities live in Sydney’s West and while lip service is given to the needs of that region most economic development work focuses on corporate welfare for established interests and supporting inner city stuff that white folks like.

When I started at what was then the Department of State and Regional Development in 2009 I was told that many in the agency believed NSW stood for “North Sydney to Wooloomoolloo”, something that largely turned out to be true. The west of Sydney, like most of the state, took second place behind the wants of big business.

This is what’s encouraging about the Made In New York campaign, it promotes smaller business – although they all seem based in lower Manhattan staffed largely by a middle class monoculture, which seems to be a problem when you buy into hipster chic.

Hipster chic is one of New York’s strengths and that’s what every city and country needs to be doing in a global connected economy.

If you can’t define and articulate what it is you add to the economy, then you’re locked into the low value, small margin commodity end of the marketplace and that is a tough place to be.

The question for all of us, on a personal and a national basis, is do we want to be price taking commodity producers or do we want to develop the high value, growth business of the 21st Century.

New York City has made its choice, we have to make ours.