Stop dreaming, China: Google is staying in Sydney

Google and New Zealand managing director Jason Pellegrino. Photo: Anthony JohnsonA few weeks ago, Google’s proposal to redevelop an unused inner Sydney railyard into a technology hubwas knocked backby the NSW state government.
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And then all hell broke loose.

The NSW Opposition, doing what oppositions do, seized on the news to criticise the government, and said it was worried Google would leave Sydney.

Tech luminaries piled on, criticising, with justification, another failure by Sydney to develop a technology hub.

And then just about every major city in the country (except for Darwin) stepped forward to say they’d be happy to welcome the search advertising giant if it wanted to relocate within their borders.

To recap:Victoria’s innovation minister, who has lured a number of US tech brands to Melbourne, flew to Sydney to meet with Google management, anddeclared in a metropolitan newspaper that “if NSW doesn’t want them, we certainly do”Adelaide’s Lord Mayor, the South n premier, the city’s top university and its main newspaperlaunched a campaignto get Google to move to the city of churchesQueensland premierAnnastacia Palaszczuk signalledshe’d be keen to convince Google to move north of the NSW borderSky News said that Googlewas in talks to moveits heaquarters to Perth (!)Wollongong and theSunshine Coastboth threw their hats into the ringand afederal Tasmanian senator saidthe company should give up its “search” and move to Hobart.Fun story, but there is just one problem with it. Google isn’t leaving Sydney any time soon, and while is is increasing its presence in Melbourne (its in the process of opening an office there), it certainly isn’t considering moving its n headquarters to another city.

“We’ve been overwhelmed by the interest from people all over for us to relocate to their towns and cities,” Google’s n managing director Jason Pellegrino said in an email. “I personally loved the idea of moving us all to my own hometown, Wollongong. But at this stage we are focused on Sydney and our long-term growth ambitions are here.”

Difficult to leaveIt’s true the search giant has had trouble finding a bigger home in the Harbour City – a town that seems to find it remarkably easy to approve developments involving casinos or major banks.

But, evidently, it is also difficult to leave. The company has nearly 1,400 well paid staff in Sydney, including expats, who were sold on the idea of working in Sydney for a while, hard-to-recruit engineers and sales people who service media agencies and big brands based in…Sydney.

The company is going to lease additional floors of a building in Pyrmont currently occupied by Fairfax Media (publisher of this column), which will give it some room for growth; and will probably be linked with every significant development proposal in the city for a while.

It’s certainly weird that Sydney doesn’t seem to be able to get behind property developments involving major technology companies.

A plan for Google to be theanchor tenant of a tech hub in the White Bay precinctfell apart on the company’s concerns about transport links; software company Atlassian was beaten by the Commonwealth Bank for a “tech hub” situated on the old n Technology Park in inner-city Eveleigh.

But it’s also easy to understand why the idea of a major technology company moving to a smaller n city captured the media’s imagination.

Economic growth in western economies, which broadly speaking, have moved away from manufacturing and into services in recent decades, is increasingly powered by a handful ofglobal cities. Most lists of those cities include Sydney and Melbourne.

These cities have the best and highest paying jobs. But they also become expensive and, if housing and infrastructure isn’t managed properly, can be difficult places to live. Sound familiar?

In the US, the San Francisco Bay Area – home to most big tech companies but beset by homelessless and obscene housing costs – has beenlosing its appeal.

Rust-belt looking to techMany second-tier cities that used to be based around manufacturing are increasingly looking towards the tech sector as a potential source of jobs.

Amazon, for example, is currently auditioning 20 US cities to be the location for its second headquarters in North America. Those shortlisted include “rust-belt” cities such as Pittsburgh, Indianapolis and Columbus, Ohio (although two decidedly ‘global’ cities, New York and Washington DC, are the firm favourites to prevail).

The reaction from n cities to whispers that Google could leave Sydney suggests the search giant could have conducted a similar bake-off in if it wanted to.

But that’s not on the table for the foreseeable future.

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