Western Australia might be the nation’s western frontier, but there is nothing uncivilised about its world-class innovation and commercialisation pedigree. WA is a state on the cutting edge, driven by the very sectors underpinning Australia’s economic future. In ICT, biotech, wine and R&D, the west is pushing the boundaries of commercial creativity in a market unfettered by common business conventions. By James C. Tuckerman.
It was not so long ago that Western Australia was perceived by the eastern seaboard as a remote outpost, good for mining, maybe a holiday, but little else. That might have been the case a generation ago. However, WA is experiencing an economic renaissance, thanks to an ever-strengthening culture of commercial creativity. The west has reinvented itself on its own terms and, in the process, reinvigorated the idea that innovation in an emerging economy can overcome even geographical constraints.
According to Mal, a Liverpool-born taxi-driver who made Western Australia his home in the 1970s, “Perth has more millionaires per head that any other capital city in the world.” And he can understand why, too. “It is also the sunniest capital city, with great beaches, great views and plenty of opportunities for anyone not afraid to do a bit of hard work.”
Unlike many colourful facts offered by Australia’s (mostly) friendly taxi-drivers, the wisdom of Mal passes independent verification. Perth does have the highest population per capita of ‘self-made’ millionaires in the world. And yes, it is also the sunniest, with an annual average of eight hours sunshine per day.
It certainly does offer an enviable lifestyle, with its Mediterranean climate and modest cost of living. But the most remarkable thing about West Australia is the sanguine outlook of its people and the determination of its industries to stay innovative.
Lindsay Lyon, President and CEO of Opdicom, a global storage software company with roots in Perth, believes that Western Australian has the most entrepreneurial culture in Australia, and there are two “very simple” reasons why.
“Firstly, the State has so many entrepreneurial celebrities – Kerry Stokes, Lang Hancock, Michael Edgley and, of course, Alan Bond. You can list off about ten nationally recognised, highly successful West Australian entrepreneurs without too much trouble. Secondly, everyone in Perth wants to own a boat and park at the Quokka Arms Hotel at Rottenest,” laughs Lyon. “Everyone wants to work for himself or herself, make some money and buy a great big boat. Or, at least, that’s one of my inspirations.”
While the majority of Australia’s investment finance is held in funds on the Eastern Seaboard (or ‘slumbers’, as one West Australian entrepreneur was keen to suggest during the preparation of this article), West Australian companies and private investors seem more inclined to keep their money busy.
“Everyone in WA is an investor,” says Marvin Avilez, a San Francisco-based technology development advisor for Gramercy Venture Advisors. “We’re currently advising several Perth based companies about re-sale and investment opportunities in the US. I’m just amazed at the level of private investment taking place here. Perhaps it’s the mining background, but WA investors seem to have an innate understanding of the inconsistent world of private equity and they want to diversify – invest in the newest technologies and industries.”
Avilez previously visited Perth in 1992, as an employee of Macromedia, and notes the significant change over the last twelve years.
“The creative attitude is still here. But it’s no longer just a surf town. Perth is like a mix between Santa Cruz and San Francisco. The calmness can give a person the opportunity to ‘think’, but the infrastructure and intellectual property is there also,” says Avilez. “Exploiting Australian IP globally is an issue for all of Australia. In WA, they seem to be doing particularly well on that front.”
At the same time, the West Australian Government also regards innovation as important to the future of WA, acknowledging that the State’s current natural advantages won’t last forever.
In a speech to celebrate the opening of WA’s new Innovation Centre in November 2004, WA’s Minister for State Development, Clive Brown, explained to a crowd of nearly 600 entrepreneurs and innovation enthusiasts that the State needs to look beyond its primary industries. According to the Minister, “Technologies that add value to the world over the coming century are what will make Western Australia prosper.”
This is not merely rhetoric. A quick tour of the city and its surrounds suggests that the West Australian Government and its economic development agency, the Department of Industry and Resources, are taking such remarks very seriously.
Located just six kilometres south of Perth’s Central Business District is one of the world’s largest monuments to innovation, Bentley Technology Park.
It is the leading technology park in Australia and rated in the top ten in the world by international experts. Bentley Technology Park is home to more than 90 innovative organisations, including private companies, research and development organisations and educational institutions.
According to Mark Jones, Property Manager and employee of Zernike, which is engaged to manage the Park, “Technology developers need a reason to cluster. Bentley has all the creature comforts – childcare, a tennis court, a function centre, a bistro, it offers catering and will soon have on-site accommodation. It is attracting significant capital investment from Australian and international organisations. The West Australian Government has dedicated $20 million to the Park over twenty years. Private organisations have contributed another $100 million.”
The next stage of development for the Bentley Technology Park is to create a wider Technology Precinct covering an area 10 times the size of the existing park. It will incorporate organisations in the surrounding area, including Curtin University of Technology, Western Australia’s Department of Conservation and Land Management and the Western Australian Department of Agriculture.
WEALTH FROM BELOW
Across the road from the Bentley Technology Park is the $37 million Australian Resources Research Centre (ARRC). The Centre’s altar-like entrance is nearly as intimidating as the wealth of world-class scientific research being undertaken within its labyrinth of corridors. Even its modern artwork highlights the significance (perhaps reverence) WA accords its natural resources sector.
Daedalus’ Wing, a mosaic of rock and aluminium in the ARRC’s central hallway, is a tribute to the role of innovation in scientific discovery. The rocks in the artwork span four billion years and include minerals that crystallised shortly after the formation of the moon. In Greek mythology, Daedalus was an Athenian inventor who built the Labyrinth of Minos. To escape the Labyrinth he constructed wings from feathers, thread and wax for himself and his son, Icarus. Unfortunately, Icarus flew to close to the sun with dire consequences, as the tale goes.
Developed by the Western Australian Government, CSIRO and Curtin University of Technology, the ARRC is seeking to develop and commercialise more lasting innovative ventures. As a result, over 60 percent of overseas mining companies use Australian information technology in one form or another.
According to the ARRC’s Science Co-ordinator, Dr Charles Butt, the centre’s main goal is to facilitate large collaborative research projects.
“Mining is an expensive business. Even the collection of a core sample can cost millions of dollars. The research we do here is highly valued all over the world, and a cause for pride. That pride gives us the confidence to continue pushing boundaries on a global scale,” says Butt.
In 2004, Australia’s biggest publicly-listed oil and gas company, Woodside Energy, joined with the Western Australian Energy Research Alliance (one of the world’s most prestigious oil and gas research centres) to create R2D3. The new alliance will undertake ‘Research to Discover, Develop and Deploy energy solutions for a sustainable future’ (R2D3).
It is also not hard to appreciate some of the ground-breaking biotechnical/biomedical research coming out of WA’s R&D mines – from agricultural and environmental biotechnology to bioinformatics, bio-leaching and hydrometallurgical processing.
Importantly, Western Australia is home to biomedical companies that are actually earning revenue. Early last year, Australian Anthill profiled two West Australian biotech bull-ants in its ‘Bio-dacious’ Feb/Mar biotech special – Clinical Cell Culture Pty Ltd (C3) and Ozgene Pty Ltd.
Since then, C3 has expanded from selling spray-on skin cells for the treatment of serious burns and scars to marketing ReCell, a device that enables the collection of healthy skin cells for immediate application on damaged skin. Ozgene continues to prove that big outcomes come from small beginnings, providing genetically modified mice (worth $100,000 each) for testing human genetic disorders.
It is difficult to say what first triggered Western Australia’s interest in the biosciences. However, it is clear that its biotech pedigree did not emerge overnight. Pfizer claims a history dating back to 1849. Pfizer Australia began operations in 1886 and today commits more than $35 million to local R&D each year.
“At present, WA is home to 140 businesses and organizations working in biotechnology. And some of these technologies are truly amazing. CollTech, for example, is extracting collagen from sheep skin,” says Roy Chapman, General Manager of Strategic Industry Development, Department of Industry and Resources. “Traditionally the majority of collagen has been sourced from cows and pigs, constrained by disease, specifically ‘Mad Cow’. Collagen is a billion dollar industry and CollTech is making production safer and more profitable.”
The West Australian Department of Industry and Resources is implementing a number of initiatives to further promote the State’s biotechnology excellence. One of the most significant of these is its decision to host Australia’s premier biotech event, AusBiotech, later this year.
IT PAYS TO SHARE
Another interesting fact offered by Mal, my host taxi-driver, is Perth’s status as the most isolated capital city in the world. The State covers almost a third of Australia’s land mass, yet it has a population of only 1.8 million people, with 90 percent bunched together within a 200km radius. So, how has this shaped culture and business in the West?
Stephen Rice is Chief Executive of PlanExit, a boutique advisory company that specialises in project incubation, venture funding and commercialisation strategies, “When you live and work in the most isolated capital city in the world you have to have the greatest technology in the world to be a success,” he says. “This has fuelled some astounding technology innovations – not just in the mining industry.”
Paul Kristensen, a well-known West Australian businessman and owner of Perth-based VC firm Capital Technologies, believes that this isolation and distance has created another West Australian advantage.
“Collaboration is key to R&D in WA. A smaller population creates greater possibilities for knowledge sharing,” says Kristensen.
Kristensen is Chairman of the London AIM-listed DDD Group Plc (Dynamic Digital Depth), a 3D technology company with its R&D section based in the Bentley Technology Park. DDD has created a suite of software enabling images to be shown in stereoscopic 3D without the need for 3D glasses and for any 2D content to be converted to 3D.
Not more than three kilometres away, in Kewdale, Jumbo Vision International is creating information display systems able to exploit Western Australia’s leadership as a provider of virtual special technologies.
In the ARRC, a CSIRO, Central TAFE, Curtin University of Technology and University of Western Australia joint venture called IVEC (Western Australian Interactive Virtual Environments Centre) is mixing 3D technologies with touch and sound to create truly life-like training environments – for surgeons, mining companies and other industry groups.
It is easy to spot the advantage WA companies have when identifying opportunities for collaboration and information sharing.
WHAT TYRANNY OF DISTANCE?
Plan Exit’s Stephen Rice also acknowledges that Australia has a tradition of ingenuity, born out of necessity, but he believes that distance is no longer a tyranny for the people of WA.
“Between Perth and the majority of Australia’s finance lies a vast and arid continent, but technology and the nature of the new economy render that fact immaterial,” says Rice. “West Australian businesses liaise as freely with Sydney as they do with Asia, the US and Europe. Commercial success has never been more dependent on merit, and West Australian companies are competing with the best in the world and winning.”
Rokeby Biomedical is a West Australian biotechnology company that was born global. Its R&D takes place in Australia, it is financed from Singapore and its products are produced in Taiwan. It does more business with companies in South East Asia than it does with companies on Australia’s Eastern Seaboard. This is a common model for Western Australia.
“Perth is a very popular investment location for Singapore companies and individuals. They invest in our businesses and our property markets, and send their children to our schools,” says Nolan Stephenson, Innovation Manager for the WA Department of Industry and Resources.
The rationale is simple. Singapore and other South East Asian nations operate in similar time zones to Perth. Singapore and Kuala Lumpur – like WA – are three hours behind Australia’s Eastern States. Indonesia is four hours behind most of Australia but only one hour behind WA. Sydney-based businesses cannot liaise with Jakarta until early afternoon, while Western Australian companies are already engaging in South-East Asian commerce from 10am at the latest.
When Australian Anthill was launched in September 2003, the people of WA were the first to catch on.
Why did Anthill attract a disproportionate number of Perth subscribers and why were the people of WA so receptive to a magazine about innovation, start-up companies and private equity? The answer is in their history and attitude.
Like Australia, WA began as a remote outpost with a modest population and a heavy reliance on natural resources and primary industry. But to thrive in a world where distance and borders mean less with each passing year, you have to be smart, creative and original to get ahead.
Today, Perth and its satellite industry clusters form a vibrant commercial hub; a gateway to Asia, with new strengths in technology and R&D that compliment and buttress the competitiveness of its traditionally lucrative mining, energy, marine, wine and tourism sectors.
It shouldn’t come as a surprise that the most isolated capital city in the world is one of Australia’s most outward looking.
Just ask Mal, the cabby.