America’s Most Innovative Cities

Forbes.com has named America’s top 20 most innovative cities. Of course, San Jose, CA – epicenter of Silicon Valley – ranks first, but the others are up-and-coming hotbeds of innovation, particularly the number 2 city on the list – Austin, TX. Australian entrepreneurs looking to expand into the US to be close to their customers should take a look at these alternatives to Silicon Valley. Click here for the snapshot (in pictures). Click here to read the story in full.

In a related story about being close to your customers, Brad Howarth reports on Australian companies that have opened offices in New York City in a piece for the Age.com, “Aussies in NY Empire Building Quest”.

Australia’s Key Role in US / China Relations

Peter Beattie, former premier of Queensland and former state commissioner for the Americas, proposes how Australia can play a key role with the world’s two largest economies – the US and China, in the 12 June edition of The Australian.

In “Here’s Our Chance to Share the Spoils with the Emerging Gang of Two,” Beattie explains:

…The dominant players in the global economy, the US and China, form a Group of Two, giving the world a leadership team of Hu Jintao and Obama. The days of world economic dominance by the US are coming to an end; it will now have to share the power.

The US is by far the world’s biggest economy. Next year China will be No 2 instead of Japan…. Both countries are critical players in global security and nuclear non-proliferation issues. For all the wisdom of the creation of the G20 group of countries to replace the G8, the reality is that there will be in effect a G2…. [and] fortunately for Australia we are strategically located in the Asia-Pacific region, with unsurpassed historical links to both the US and China…. we are a clever country supported by a culture of innovation…we are well placed to be a key partner of the Sino-American generation of the immediate future.

…It’s in everybody’s interest that [the US and China] co-operate and bring new technologies on line, at industrial scale, as quickly as possible. With the prospect of world domination in clean energy, it’s also in their economic interests.

For America’s part, it wants clever international partners who can bring innovative technologies and processes to the US economy, then sell them to the world.

This is Australia’s opportunity…. The formula is simple: partner with the US to help it co-operate with China and Australia cements a meaningful place in the US-China-dominated economy of 2030 and beyond. (Read more)

Looking Back at the Dotcom Bust

Hard to believe it’s been 10 years since the dotcom bust. On March 10, 2000 the Nasdaq peaked at 5,048.62. Then it promptly nose-dived, never to see that level again. What happened next was the great dotcom bust that sent the US economy into a tailspin, salvaged in the last decade — only temporarily — by Web 2.0. As we await Web 3.0, and still-to-come better days in Silicon Valley and beyond, here’s Wired’s look back at the products, the players and the promises of the dotcom era, and where they are now.

Click here to read Wired’s “10 Years After: The Dotcom Boom and Bust.”

Another Look at the Australia-US Free Trade Agreement (FTA)

In January we posted some info on the Australian’s position on the Australia-US Free Trade Agreement (FTA) on its 5th anniversary (click here for that story). Now we have another take on the FTA published in the Sydney Morning Herald (“Mind the Gap: Benefits from Free Trade Haven’t Really Gone the Distance”). While the earlier story focused more on what the US has done investment-wise into Australia as a result of the FTA, and the E-3 visa that allows Australians easier access to working in America than workers from most other countries, what has been the real upshot for Australian exports as a result of the FTA?

Rodney Tiffen, a professor of government and international relations at the University of Sydney goes so far as to call the agreement a “dud”. But while Australian exports to the US are meager, Aussie exports to Asian countries continues to grow.

Australia’s exports to the US in the five years to last year grew by only 2.5 per cent, compared with double-digit growth for exports to all the major Asian trading partners. Since the signing, America has slipped from third to fifth among Australian export destinations, overtaken by Korea and most recently India.

In general, it seems these FTA deals “favour…the biggest countries, such as the US and China. Their power affords them superior bargaining leverage to win concessions favouring their domestic constituencies. Australia and most other countries have an interest in more global agreements.”

Overall, however, the FTA has been a good thing for Australian entrepreneurs looking to set up business in the US. The E-3 visa allows for relatively easy relocation for those who are establishing a US entity while keeping parts of their business back home (typically R&D). In this scenario, both countries win. If anyone has any details on studies done that show where these US-based, Aussie-led companies exports go let us at ANZA TechNet know. The IT that is produced here by Australians that is sold to US customers is not considered “export” — or is it?

Five Years On, Australia-US Free Trade Agreement Results

Australia and the US signed a free trade agreement (FTA) in January 2005. While many Australians have been critical of the agreement, and many Americans unaware that such an agreement even exists, according to The Australian, the agreement is working — for both sides; specifically the Australian workforce and the US investment community.

A key provision of the agreement was the relaxation of the threshold requirements for US investors to seek Foreign Investment Review Board approval before investing in Australia.

The results are clear.

According to the latest Australian Bureau of Statistics data, total US investment in 2005 was just shy of $334bn and has increased by an average of $20bn a year, reaching $418bn by the end of 2008.

US investment into Australia has “helped foster industries of the future” — and create jobs for Australians as well as help Australia ride out the global financial crisis. (Americans may find this last point interesting, to say the least.)

Meanwhile, the FTA has brought tens of thousands of Australians into the US on the two-year, indefinitely renewable E-3 work visa, one of the most preferential work visas on the block.

America continues to rely on foreign workers to fill gaps in its workforce, particularly in the high-tech sector. The H1-B visa cap is often cited as problematic by the tech industry in how it limits the number of skilled workers that can enter the US each year. The E-3 gives Australians a leg up on this competition.

And, again, while some Australians complain that the E-3 will lead to a “brain drain”, the idea is that the experience Australians gain while working in the US will be put to good use when these skilled workers return home and apply their knowledge to existing Australian companies, or start up new businesses. Doubters need to look no further than how the H1-B cap and economic downturn in the US has forced many Chinese and Indian workers from Silicon Valley to return home in the past year and the upturn in those economies and local industries.

To read the rest of the results of the Australia-US FTA, “Free Trade Brings Heaps of Benefits”, click here. To learn more about other US free trade agreements, click here.