by Dan Rosen
For well over a decade we have been bombarded with ideas and policy prescriptions to become "the next Silicon Valley". This has spawned an industry in Silicon-appellations, birthing Silicon Alley, Silicon Forest, Silicon Roundabout, Silicon Wadi, and in the Aussie context Silicon Beach.
But what if there is a different Californian city that could capture our imagination? About 600 kilometres down Highway No. 1 from San Francisco lies Los Angeles, the City of Angels.
Long defined by Hollywood and Disneyland, it is this city's emergence as the epicentre for where old-school creativity meets new-school tech that offers a glimpse of an alternative model for Australia's innovative future.
As we enter the next phase of the digital revolution, Los Angeles is leading the charge to convert information into experience. And the key ingredient that is driving this shift is LA's largest resource – its community of creative talent.
It is the bringing together of coders with the talents of filmmakers, storytellers, designers, and musicians that is manifesting the next generation of companies and jobs.
Snap Inc, may be the company that best embodies this alchemy. Based in LA's Venice Beach, Snapchat has in a few years captured the imagination of the world's youth by combining moving images, stylishness and ephemeral cool straight to the smartphone.
Last week, its successful IPO valued the company at almost $30 billion.
Tapping into this rich creative vein is the reason the Silicon Valley giants Facebook, Google and Yahoo are driving down the highway to set up massive LA offices.
And it is not just entertainment. Elon Musk's Tesla and Space X call Los Angeles home.
The city has discovered that it is not a choice between old economy creative industries and new economy tech, but rather a synthesis of the two that will drive the industries and jobs of the next generation.
The music industry is a useful case study. Once considered a dinosaur of the old economy, the record business now generates more than 70 per cent of its revenues from digital avenues.
The largest source of revenue is paid subscription services – a category that did not exist five years ago. Over a decade of decline, the US record business is set to return to 10 per cent growth in 2016.
Sensing the prevailing winds, it is not surprising that Universal Music Group, the largest record company in the world, moved its global headquarters from New York to LA, and Apple after its $US3 billion purchase of LA-based Beats has kept its Apple Music business based in the City of Angels.
We are fortunate that Australia is abundant with creative abilities. Our filmmakers, musicians, designers and writers are world-class.
In recent weeks Sydney artist Flume won the Grammy for the Best Dance album in the world, and two Aussie films were nominated for the Best Picture at the Academy Awards.
However, Australian creators and creative businesses live in a more fragile ecosystem than their US counterparts, given our significantly smaller domestic market.
In this context, the conclusions reached by the Productivity Commission (PC) Report in its recent report into intellectual property are so troubling.
In recommending reforms such as broad safe harbours and fair use that favour big tech platforms over local creators, it advocates for a future that undermines Australia's creative capacity.
The PC sees a world in which Australia is always a net importer of intellectual property (IP) and therefore supports an IP regime that would pull the rug out from our ability to produce the content that will entertain the next generation of Australians.
This underestimates both the existing level of our copyright industries – which according to PwC employ more than 1 million Australians and make up more than 7 per cent of GDP – and the ability of Australia to transform itself to a net IP exporter with targeted policies.
Facebook chief executive Mark Zuckerberg recently said that the world's largest social network was moving to become a video destination on the understanding that the majority of that video content will be "professionally created".
Translation, the content that will entertain us will not be cat videos created by bedroom users. Let's make sure Australian creative talent and companies can be producing the compelling content that will fill our smartphones and connected TVs.
So while we absolutely need to teach our children to code, we also need to prioritise creative writing and music education.
And as we invest in an NBN to provide the infrastructure of the connected world, we need to equally invest in our ability to fill those pipes with quality Australian voices and stories.
Our childhood heroes may have changed from Page and Plant of Led Zeppelin in the '70s to Page and Brin of Google in the Noughties. But perhaps the children of the coming decade can idolise a hybrid of the two … Web Zeppelin anybody?
Dan Rosen is chief executive of the Australian Recording Industry Association
Article published originally in The Australian Financial Review