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For the past few months there have been calls for Australia to become a ‘Silicon Beach’, where technology entrepreneurs can build new global businesses, experiment with start-ups and rival foreign innovators.

Australia’s location, time zone and existing creative community makes the country an ideal incubator for this and, when the National Broadband Network is rolled out in the next few years, the country will have a vastly improved global reach.

It is because of these factors that digital economists believe Australia has the critical ingredients needed to succesfully compete in the near future with the world's leading digital economies, such as the United States. 

Google Australia’s MD, Nick Leeder, is one of the strongest speakers for this dream. He believes that Sydney has the potential to become a world capital of digital innovation, although he does acknowledge there are changes that need to be made before Australia can truly take on international rivals. 

In a blog post earlier this year, Leeder said:

Sydney is full of creativity and technology but we need to connect the two better. We already have the key ingredients: top talent, world-class educational institutions, ambitious people and potent investors. We’re investing in the high speed broadband infrastructure that powers global reach. We’re big enough to accomplish big things on the world stage, but we’re also small enough that even a couple of people with a great idea can have a big impact.

We should set out to build the Silicon Beach and use the capabilities and thinking it creates to accelerate the absorption of digital throughout the economy.

If we get this right, digital will be a critical source of economic growth for many years to come. Every prospering business will have made the decision to face into the change the Internet brings and start the transition today.

There’s an opportunity on the table. Let’s seize it.

How can Australia become a Silicon Beach?

If Australia wants to be at the forefront of digital innovation and a serious rival to California’s Silicon Valley, then there are a few cultural changes which need to be made. So what are they?

It needs to get comfortable with failure. 

According to Leeder, Australians have a deep-seated fear of failing and this is preventing people from taking the risk of starting up their own technology company.

He suggests that this, along with a ‘tall poppy syndrome’ which criticises high achievers, needs to change in order to allow Australians to feel comfortable with experimentation: 

If you take a big risk in this place you can face-plant very quickly and get punished for it... here failure is seen as a terminal black spot.

No-one should be embarrassed to have global ambitions any more... Those who are succeeding now are those who are prepared to fail but smart enough to learn. It is fundamental that Australian society as a whole learns that failing is fine as long as you learn from it and adjust quickly. 

It needs to entice back foreign successes.

For years Australia’s brightest and most technologically advanced entrepreneurs have been jumping on planes to Europe or the United States in the hopes of making it big. However, if Australia intends to become a Silicon Beach, it needs to not only retain the next generation of entrepreneurs, but it needs to bring back those who left.

Over 17,000 Australians are said to be spread across the San Francisco Bay area and at least 65 start-ups in and around Silicon Valley were apparently created in Australia, or have an Australian founder. This shows that creativity and ability exists Down Under, but potentially struggles to flourish in the local environment.  

It needs to fund more start-ups.

Setting up a small tech business can be fairly cheap - initially - but if a businesses wants to expand past their house and move into an office then it normally requires funding.

It seems that Australian tech start-ups are struggling to find investors that will help them however, and this lack of venture and support is said to be a prime reason why so much of our talent heads overseas. It would seem that an easy solution to this problem would be to fund more start-ups, and it looks like some companies are already jumping on the bandwagon.

Optus and Singapore Tele launched a funding program earlier this year to back up to eight start-ups with a potential investment of A$250,000 each. Similarly, the City of Sydney is trying to support start-ups through their creative and cultural hub in Oxford St which is already proving successful. Leeder says the key is to keep the movement going: 

Over the last two years, Sydney's seen its tech start-up scene booming in parallel with Silicon Valley, and that's encouraging. We need to keep this going. We need to create the right infrastructure for start-ups to thrive and develop. We need more local venture capitalists and business angels who are willing to take a risk and better mentorship for young innovators.

It needs to encourage more school leavers to undertake STEM courses.

If Australia is to become a country of innovation, then it needs to have more students enter the science, technology, engineering and mathematics (STEM), fields as these are the areas core to producing talented people critical to any technological developments.

Currently, Australia produces only 6,000 engineering graduates a year, which is significantly lower than the likes of China and India, which pump out 300,000 and 450,000 grads respectively. If Australia is to take on foreign counterparts in digital innovation, then it arguably needs to put greater efforts into funneling school leavers into the correct fields, as the next generation will likely be the ones who can further the Silicon Beach premise. 

It needs to change copyright laws.

Australia’s copyright laws are said to be outdated and ‘stifling’. Where the United States has a ‘fair use’ clause that allows for the fair use of copyrighted material, Australia does not, making it harder to share and spread ideas. To truly begin heading towards succeess, Australia needs to ensure that laws and regulations support innovation, investment and adoption of digital technology.

Dr Rebecca Giblin, copyright law expert at Monash University, agrees with this sentiment and blames the existing laws for why so many of our innovators are taking off overseas: 

If Google had been started in Australia, it could well have been sued out of existence. This hostile regulatory regime is one of the reasons why so many Australian startups head straight for Silicon Valley.

Can Australia do it?

Australians are already known for being fast adopters of technology and the country does have world-class talent, people and ideas - so it would seem that the answer to this question should be a resounding yes.

But given various existing barriers, such as low levels of STEM graduates, lack of funding and outdated copyright laws, is the country aiming for something out of reach? 

[Image credit: lednichenkoolga]

Claire Brinkley

Published 31 October, 2012 by Claire Brinkley

Claire Brinkley is Econsultancy Australia's news and insight reporter. Follow her on Twitter, Google+ or connect with her on LinkedIn

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Comments (4)

Jon Bovard

Jon Bovard, Director of eCommerce at A well known Telco

It needs a weaker exchange rate

almost 4 years ago

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Lee Marriott, Ecommerce Manager at 5th Floor The Tower

I'd definitely agree with you on this one John. I also love the term "Silicon Beach".

almost 4 years ago

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Daniel Tannenbaum

Nope. Time change is too much of a killer.

Also, a lot of global companies become big in their own country first before becoming global and Australia's market isn't big enough.

Sorry mate!

almost 4 years ago

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Ryan D'Souza

Australian's do have a bigger than usual fear of failure. Failure and its consequent impact needs to be embraced, as without failure we don't get learnings to push the boundaries further.

Also, whilst we dont have the physical population we have an amazingly strong digital economy that can support start-ups.

almost 4 years ago

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