Australia could become the next California

http://www.economist.com/node/18744197

by resdirector • 15 years ago

4 2 15 years ago

nikcub• 15 years ago

Australia does have an SWF, the Future Fund - it is one of the top dozen in the world by size:

http://en.wikipedia.org/wiki/Australian_Government_Future_Fu...

Although the current government would like to impose a new resources tax (and a carbon tax) and spend it all as part of budget rather than banking it in the fund (which was mostly financed by the privatization of national telecom)

adamtait• 15 years ago

I appreciate that The Economist takes a hard line on the reality of Australia's position, as clearly a comparison to California is wild. Last I checked California's population was roughly double the entire country of Australia, not to mention the vast differences in GDP and economy.

Australia has a lot going for it, but many problems that will hold it back. Firstly, the Australian economy will live and die by mining. The Australian dollar has been so low for so many years, that China (and others) have become dependant on their neighbour to the south for a big chunk of their mineral resources. This clearly swings the labor market in favor of low-education physical labor. I regularly hear stories of miners in the backcountry of Queensland or Western Australia earning insane salaries. If you grew up outside the core of Australia's 5 major cities, there a good chance you have a miner in the family and have been panhandling in the local rivers. In the cities, you have been raised to work in mining supporting industries such as finance, banking or insurance.

Australia does have a deeper connection with the major developing nations of the world. Whether the conservatives like it or not, there are many chinese, japanese, indian, brazilian, south african, thai, sri lankan, and many other nationalities here. Many companies have done business in the countries of South East Asia and Africa. Many even border on being philanthropic. Furthermore, Australians are some of the most internationally travelled people I have met. Nearly all of whom have taken extended multi-month trips several times in their lives, and aspire to continue doing so.

Education has been a problem and will continue to be for some time. If the mining boom ever tapers off, Australia will have a hard time recovering. In a country of 23 million, the top schools of Australia don't have the same talent pool to draw from as the US, UK or Canada. Thus, the resulting education level is not the same. I know countless tech leaders that would list the ability to recruit talent as the biggest problem they face. Many of the top tech companies in Australia hire significant numbers of non-Australian passport holders.

Furthermore, much of the top tech talent in Australia is moving to California. I know countless friends who have chosen SF, simply after visiting once. I don't blame them. If you want to be in the technology space, go to ground zero for the technology world. If you want to be in mining, Australia might just be best place in the world.

Australia could become the next California

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