View Full Version : The importance of the business 'cluster'


christarrant
August 4th, 2004, 10:05 AM
Came accross a cool article about our IT "clusters" in Wednesdays Syd Herald (cant find it on the web though so have to free hand type this shit ! ). I am very interested in IT. Heres the key points.......tell me what you think ?

The story was all about the strength of ‘clusters’ i.e a large number of similar companies / people working in a location which creates economies of scale and synergies which make them strong.
Silicon valley in California is the worlds biggest IT cluster with the office space of a medium sized US city all built in a very short period of time !
30-40 years ago the economy of the area was based on apricot orchards. The introduction of Stanford University led to Hewlett packard setting up its HQ there and start ups including Sun, Intel, Cisco, Yahoo, Google and much of Microsoft’s operations ( seattle HQ).
This spawned similar but much smaller IT clusters around the world including Cambridge in Britain, Japans Sapporo valley , Galway in Ireland and Denmarks greater Copenhagen.

IT in Australia-

Perth
The suburb of Bentley ( adj Curtin Uni ) was the first consciously designed IT precinct in Australia !!!! Theres 92 companies based there on 42 hectares of land turning over half a billion $ per year. The WA Government has big plans to further expand and promote it.

Melbourne
Melbourne has 18,000 dedicated professionals employed in the fields of applications, programming, software design and systems management.
The South East is the key IT cluster centered in Mulgrave / Clayton around Monash Uni. It embraced technology as a point of difference to The University of Melbourne. The land is also cheap there. The precinct alone employs 90,000 people.
Ballarat is another emerging IT area.

Brisbane
Fortutude Valley is emerging as a small but specialised IT cluster with several new companies starting up / moving there recently.

Sydney
Sydney embraced IT and managed itself as a location to become the hub of IT for Aust and a major player in asia pacific. 70% of the top 100 Aust IT companies are HQ’d there plus two thirds of the largest computer software producers.
With 53,000 professionals Sydney has 3 times the number of IT professionals as Melbourne, which is the number 2 city.
30,000 of these 53,000 professionals live in the arc stretching from Ryde, Chatswood to Zetland.
North Ryde is the biggest cluster.
1,500 companies based in western Sydney alone, generating $4.5b in turnover annually ! Fark !!!!!

Other international ‘Clusters’ in other industries of note-
Movies- Hollywood
Cut flowers- Netherlands
Defence equipment, education, food processing and pottery- France
Bio tech- Scotland
Defence - Israel.
Sports cars ( Ferrari, Lamborghini, Maserati) - Modena , Italy
Software engineering- Banagalore, India ( has 200,000 software engineers)
Low tech industry - Southern China ( 40% of the worlds low tech labour intensive industries)

In Australia-
Horses- Scone Hunter Valley (produces 70% of Austs thoroughbred foals)
Surf gear- Torquay, Vic
Wine- Barossa Valley, SA
Mining - WA
Finance, Accounting, Law, Marketing, Media, IT, Medical – NSW, centered in Sydney
Transport, Manufacturing, Biotech, Car industry – VIC, centered in Melbourne
Fruit ( finished production) - Sheparton, VIC
Golf industry- Melbourne

mic
August 4th, 2004, 04:21 PM
It is important for many reasons this power clustering as such, look at Sydney for example all finiacial instituations around the upper area of the CBD and same for Australias IT industry on the north shore

The other cities suffer at the hands of Sydney....well maybe not Melbourne but the other seem to-especially Adelaide

Amaruu
August 4th, 2004, 05:08 PM
I have said and explained it before on another thread, but accounting and law are not the sole domains of anyone city, in the instance above, Sydney.

christarrant
August 5th, 2004, 01:07 AM
Amaru, as the article explained a 'cluster' is not a 'sole domain' as you put it. A cluster is a major centralised location where the majority of stuff is.

OzAsian
August 5th, 2004, 03:33 AM
It is important for many reasons this power clustering as such, look at Sydney for example all finiacial instituations around the upper area of the CBD and same for Australias IT industry on the north shore

The other cities suffer at the hands of Sydney....well maybe not Melbourne but the other seem to-especially Adelaide
I would think that there are many more than 18,000 IT professionals in Melbourne but then again the article is from the self promoting SMH.

christarrant
August 5th, 2004, 08:53 AM
dont get bogged down in the statistics ! I just thought the articel in itself was interesting i.e Perth was the first IT cluster in the mid 80's and Silicon Valley was farmland in the 1970's.

perthguy78
August 5th, 2004, 05:40 PM
the theory is from Michael Porter's Competitive adv of nations.. talks alot about the industry Diamond....... read it ......... its very good a classic piece of work in this area