Sydney’s uber high cost of doing business relative to market opportunity, alongside its failure to persuade large foreign multinationals to use Sydney as its premiere business hub for the Asia Pacific regions suggests the NSW and Australian governments need to go back to the drawing board to figure out how to transform Sydney’s (and other Australian cities) attractiveness as not only a regional, but a global hub.
To be frank, Singapore and Hong Kong are crushing Sydney’s chances of becoming a real regional player. They too are expensive locales to do business, but talking to senior decision makers of large and complex global businesses, it is clear Sydney does not seem to be a preferred destination versus Singapore or Hong Kong. Citing high costs of doing business, distance from other major hubs and cultural challenges alongside an uncompetitive tax system and limited access to market versus rival hubs, it is clear that its now time for key government decision makers to figure out resourceful solutions to improve Australia’s talent base alongside figuring out a solution to make Australia a more tax friendly place to attract global talent.
At the end of the day it comes down to the availability of high caliber talent, productivity, profitability and tax. Imagine a large multinational trying to persuade their prime human capital to relocate to Sydney and pay +45% income tax? Or imagine a new local tech startup seeking to attract expertise that does not exist in Australia as the RBA pushes for a weaker currency?
If Sydney is truly a global city, it should not have these serious problems period. The sooner there is a dramatic shift in the education system that pumps out talent like no tomorrow the sooner Australia can compete on the basis of human capital. Lets not forget, California and New York are high taxing locales, but they are able to attract the best the world has to offer when it comes to talent. This approach in itself would significantly increase Australia’s competitive landscape versus Sydney’s more successful rivals in Asia
There is no evidence of a nation going bankrupt because it spent too much on education (investing for the future). And the more educated our workforce is to fulfil the future roles the globe will demand, the greater the chance global businesses will choose Sydney or another major Australian city as its regional base. Until then, it could be a very hard grind. Especially for startups who we depend on reinventing our houses and holes economy.