Sydney is too expensive for young people to take a risk on a good idea
The world is full of bright young people building spiffy websites and nifty apps. They’re skipping the stability of traditional employment to code in cafes and co-working spaces. But they’re probably not doing it in Sydney.
World Economic Forum research found that young Australians were poorly prepared for the digital economy, and faced intense labour market uncertainty. Fewer young people want to work for a start-up than in any other country surveyed — a mere 3.8 per cent.
Who can blame them for choosing a nice, safe bank job in expensive, uncertain Sydney? Starting a business can mean years of earning almost nothing, and just surviving in this city is fiendishly expensive, let alone funding a house big enough for kids.
I don’t know many successful Australian tech entrepreneurs — presumably there are a few who haven’t moved overseas yet? But when we left uni 20 years ago, lots of my cohort had a go at becoming artists, musicians, writers and comedians — equally risky propositions. Many of them are still thriving today.
My friends and I started a satirical newspaper called The Chaser when I was 22, in what would now be called an ultra-niche content play. Even in 1999, we knew it was foolish — our first edition contained a history of failed independent newspapers.
Our paper joined them after six years, 90 editions and roughly a dozen legal threats that were abandoned after the lawyers estimated our assets. But we’ve worked in the media ever since, somehow surviving on the gag-writing skills honed over 90 all-nighters. (Topical comedians are nothing if not agile.)
My generation was lucky that back then, Sydney seemed as cheap as our jokes. These days, Demographia says it’s the world’s least affordable city after Hong Kong.
In Sydney, the NSW government’s identified a Diagon Alley for the magic of innovation. Premier Mike Baird wants the disused White Bay power station to become “Australia’s own quantum harbour”. Personally the word “quantum” reminds me of Scott Bakula, but Opposition Leader Luke Foley supports the idea.
Our leaders envision a harbourside hub buzzing with minty-fresh ideas, rattling as disruptive coders bash their keyboards to grow the digital economy. All we need is entrepreneurs to start up the start-ups.
Politicians aren’t the only ones advocating entrepreneurship. A recent report by the Australian Council of Learned Academies identified an “urgent need” for more businesses to commercialise our publicly-funded research.
Apparently we have superior technology but can’t sell it. We’re the 2016 equivalent of Betamax.
But unleashing world-beating innovation isn’t as easy as tossing around buzzwords and generating 3D renders of groovy co-working spaces full of hip young techpreneurs. (Apparently that’s a word.)
If we build these exciting hubs and incubators, will anybody come? Surely the lack of a groovy converted power station isn’t the only thing stopping smart people launching startups to commercialise breakthroughs made by researchers with safer university jobs. Not when starting businesses has the risk profile of a Game of Thrones character.
Sydney’s full of cheerful yellow posters advertising the government’s “ideas boom”, like so many pre-election daffodils. When announcing his innovation package in January, Malcolm Turnbull praised countries where “entrepreneurship is valued and taking calculated risks or ‘having a go’… is considered to be the norm”.
It’s not surprising that this PM believes in taking chances — it worked out for him last September. But Labor’s spruiking innovation too. Bill Shorten promises “regional innovation hubs” and a “Landing Pad for Australian innovators”, which sounds as though he’ll install mattresses under the windows of every co-working hub.
Both leaders want to sound future-focused in the hope that voters will give them one. We might not be seeing the contest of ideas that was hoped for after Malcolm Turnbull’s ascension, but there’s certainly a contest to talk the most about them.
They’ll struggle to encourage young people into entrepreneurship, though, if they don’t address the boom that isn’t spruiked on posters — the housing one.
Rents on four-bedroom inner-city terraces have tripled since I shared one with friends 20 years ago, according to Housing NSW. Rents have risen almost as much in the outer suburbs, too. Whereas wage growth has stagnated recently.
This means that it’s more expensive to roll those dice than ever. An average room in an two-bedroom inner-ring apartment now costs $330 a week. Food, bills and the rest can easily double that, which is an awful lot when you’re putting in sweat equity and have to cover your business’ costs, too.
Making Sydney affordable enough for entrepreneurship will require an ideas boom from our policymakers. Otherwise not only will Australia never establish the startup culture we’re told we need, but nobody will start dubious new satirical publications. It would be tragic indeed if those few agile innovators who do claw their way to the top had nobody to lampoon them.
First published in The Sydney Morning Herald