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Tasmania: a silicon valley? « Previous | |Next »
September 29, 2010

David Bartlett, the Premier of Tasmania, says that Tasmania is set to become the next Silicon Valley-style technology hub as the national broadband network is implemented over the next three years. It is envisioned that Tasmania will lead Australia in connecting to the global digital economy.

Tasmania, as a technology hub, is part of the Bartlett government building a dynamic and modernised economy structured around five priority sectors for innovation in the state’s economy:

• high-value agriculture, aquaculture and food
• renewable energy
• the digital economy
• a vibrant, creative and innovative Tasmania built on its lifestyle advantages, and
• further growing its tourism advantage.

This Innovation Strategy was first outlined in the New Economic Direction Statement (2008) which re-focussed the state’s economic direction on three key strategies: innovation, skills and infrastructure.

Most attempts at building the next Silicon Valley in other countries have failed. They thought in terms of "innovation in a box" that you can simply build overnight, unconnected to its surroundings, to the culture, to a moment in history.

Margaret O'Mara in Foreign Policy argues that Silicon Valley was based on substantive government contracts, a top-tier university (Stanford) as a research center and networking hub, a venture-capital model, a risk tolerance and meritocratic ethos of Silicon Valley financiers, and competitive amenities that provide a palce where creative, talented entrepreneurial people want to live.

O'Mara, the author of Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley, says:

The secret of Silicon Valley is that it wasn't a consciously planned silicon city. The Valley exists because of other big forces -- Cold War spending patterns, sustained GDP growth, and large-scale migration and immigration. It prospered because of unique local characteristics like risk-tolerant capital, entrepreneurial leadership, and good weather. It grew organically. It had room for happy accidents and lucky breaks. The not-so-good news for places like Shenzhen's University Town or Russia's Innograd, the high-tech corridor Medvedev wants to create in a woodsy area outside Moscow, is that this kind of ecosystem can't be built quickly from scratch. It takes time to grow, and success will depend on things its builders cannot control.

Even though globalization has changed the playing field, and the technologies that the Valley helped create have brought far-flung places and people together like never before, place still matters, and the right ingredients still make a difference.

It is not clear that Tasmania has the right ingredients to build a high tech hub or a city of knowledge. For instance, it is not clear that the University of Tasmania is like the American research universities that were at the heart of this formation of Silicon Valley: a university as an economic development engine, urban planner, and political actor.

In Silicon Valley universities and their administrators were central to the design and implementation of cities of knowledge, and successful scientific communities often depended upon the presence of an educational institution that not only had extensive research capacity, but was also an active participant in state and local political power structures.

| Posted by Gary Sauer-Thompson at 2:50 PM | | Comments (7)


And since California is now an economic basket case, one wonders why it's such a great idea in the first place.

Enterprises should leverage on their sources of competitive advantage, not try to be a pale imitation of something else. Unless you are South Korea maybe.

Also, provincial politicians should aspire to a firmer grasp on reality.

One advantage Tasmania has is that Hydro Tasmania is still Govt.-owned. So far as I am aware, the new irrigation schemes proposed to improve agriculture in Tas. will also be undertaken, and I presume owned, by Govt. This should give them advantages in the energy sector, but so far as I can gather from the document Gary linked, they seem more interested in giving grants to private energy firms than in using their own resources in Hydro Tasmania. That kind of strategy usually means that the public gets very little value from their assets.

As far as the “digital economy” is concerned, Tas. seems not to be breaking much new ground, beyond trying to capitalise on the introduction of the National Broadband Network. If all they do digitally is to offer grants, subsidies and tax breaks for private investment, they will achieve nothing remarkable. If the Tasmaniacs want to break new (ie. old) ground, they should use Govt. enterprise to develop software, generate internet content, design new hardware – they’re limited only by their imaginations and clues about world-wide demand. They could put together something like a hybrid of CSIRO and the old Telecom research labs.

But of course to do that would imply abandoning the privatise/deregulate religion of contemporary economics and politics.

In this interview Bartlett says:

In the past 50 or 60 years, the island's been really fuelled in economic direction by hydro-industrialisation; that is renewable energy and what that brought to Tasmania. And [with] the [national broadband network], or the rollout of optic fibre, by 2013 Tasmania will be the most connected place on the planet when it comes to penetration of fibre-to-the-premises. The NBN is the new wave of hydro-industrialisation, or as important to Tasmania's next three decades as hydro-industrialisation was for the previous three decades.

He spells this link out as follows. The Apple isle, once fully connected to the network, will become attractive to IT giants such as Google, which are always looking for places to put more computer servers.
We know for example that Google and other companies look for renewable energy sources when they're placing their server farms because they want to be seen as clean, green companies.And of course Tasmania produces some 75 per cent of Australia's renewable energy right now and we have renewable energy that, again, fuelled the island for the past 50 years and will continue to do so because it'll attract other industries that are related to information industries.

I'm in no position to judge that account of Google locating its server farm in Tassie. Does it make sense. Or is it fantasy land? Does it require lots of subsidies? Are there any spinoffs?

Or is Tasmania going to become another Ireland?

here is an upbeat interpretation of Bartlett's high-value agriculture, aquaculture and food on the 7.30 Report. Tasmania is the new foodbowl of Australia with the decline of the Murray-Darling Basin from ecological devastation.

It's another version of the Murray-Darling Basin:

A series of pipelines pump abundant fresh water from the saturated western part of Tasmania down from the Central Highlands and into drier areas. Some of the water will be stored in dams and reservoirs and some will be pumped straight onto crops and pasture.

By providing a reliable pool of water during the summer and drier months, it gives farmers the opportunity to grow their businesses with confidence and to enter into long term contracts with companies knowing they can supply. Gary.

But with all due respect to Bartlett, so what? Is that his idea of Silicon Valley ... a place where there are lots of servers?


You know after more years than I care to count of enduring stunningly incompetent and/or corrupt NSW state governments, I really have no more tolerance for futuristic dreaming. I just wish the useless bastards would learn how to deliver essential public services with a modicum of efficiency and effectiveness. Leave the transformative visions to the private sector IMHO.

Silicon Valley was the result of a serendipitous series of accidents. Right place, right time, right set of people, investment environment etc. By the time it was gaining significance the best of geeky types had moved to Austin. Bodies like state govts and local councils have been consulting with Richard Florida ever since, trying to reproduce it.

You can't manage creativity. You can kill it in several ways - make it punch the clock, make it apply for funding, ask it for business plans and cost benefit analyses, tell it to get a haircut and so on. Or you can go the other road and fail to recognise its value so it goes overseas.

Australians are quite good at being inventive, but we're even better at exporting it.