Australia’s leading state is back to business after the Olympics, attracting major international investment.

	Area:	800,000 sq km
	Population:	6,532,500
	as % of total:	33.6%
	Capital:	Sydney (population 4.1m)
	Gross State Product:	A$231.28bn (2000/2001)
	as % of total:	36%
	State Final Demand:	A$224.51bn
	SFD growth:	1.7% (2001)
	Credit rating (S&P):	AAA
	Average weekly earnings:	A$720.30 (08/2001)
	Unemployment rate:	5.6%

The state of New South Wales is still riding the cash wave associated with the Sydney Olympics. The ‘best Games ever’ could also be described as one of New South Wales’ best ever money-spinners. A study by PricewaterhouseCoopers, commissioned by the New South Wales Department of State and Regional Development in early 2002, showed the Olympics have generated as much as A$3bn in economic benefits, including A$600m in new investment.

New South Wales Premier, Bob Carr, has said he believes the benefits from the Games will continue to be felt for a generation. The PwC study also credited the exposure generated by the Olympics for either directly or indirectly instigating A$288m in new business under the Australian Technology Showcase, the injection of more than A$6bn in infrastructure development, more than A$1.2bn worth of convention business for New South Wales between 1993 and 2007, almost A$2bn in post-Games infrastructure development, and media exposure valued at A$6.1bn.

Australia’s leading state
New South Wales contributes the largest portion of national output for any state in a number of leading service industries. It is the base for 45.8% of the country’s finance and insurance industry, 40.7% of its property and business services (including IT) and 35.0% of its communications industry. New South Wales also accounts for 38.6% of national output in the ‘lifestyle’ industries – accommodation, cafés and restaurants, and 36.3% of cultural and recreational services.

New South Wales is one of the most attractive locations to invest and do business in the Asia-Pacific region. It has been ranked Australia’s best performing state in the four years up to 2000 by the Evatt Foundation’s annual state government league table.

A strong and growing economy, one of the Asia Pacific’s leading financial and commercial centres with sophisticated infrastructure and an enviable lifestyle. Its Gross State Product (GSP) grew by 2.7% in real terms in 2000/2001 to A$231bn, making it larger than the economy of Malaysia, Singapore, or the Philippines. The state’s GSP represents 35.6% of the Australian economy. Fifty per cent of Australia’s top 500 companies are located in New South Wales
Its continuing economic strength recently earned Australia’s leading state another AAA rating from both Standard and Poor’s, and Moody’s Investor Services, the world’s leading credit reference agencies. Moody’s endorsement of Sydney underscores its emergence as one of the financial powerhouses in the Asia-Pacific region. Sydney is home to the Reserve Bank of Australia, the Australian Stock Exchange and the Sydney Futures Exchange. It also houses the head offices of 40 of Australia’s 51 banks, which include 34 of 38 foreign banks in Australia.

With the combined advantages of flexible yet accountable financial practices, stable and constructive regulation and a favourable time zone (offering a bridge between the United States and European trading hours), Sydney continues to attract global financial services companies. Of the 444 RHQs in Australia in July 1999, nearly 64% were located in New South Wales, compared to 24% in Victoria and 4% in Queensland.

Sydney also has the largest concentration of finance skills in Australia, being the base for 45% of the more than 350,000 employees in finance and insurance.

Investment
New private investment in New South Wales in 2000/2001 accounted for more than one third of the national total, reaching A$14.0bn. The introduction of Australia’s globally competitive tax regime in July 2000 proceeded remarkably smoothly, and is expected to encourage investment growth in established industries and increase the development of know-ledge-intensive industries including IT and biotechnology. In addition it is expected to facilitate the commercialisation of new products developed by these emerging industries.

The state’s leading position enables it to further benefit from Australia’s position as one of the most politically stable countries in the world, with transparency in government, a sound judicial system, and a commercial environment strengthened by a reliable system of contract and corporate law. A recent AT Kearney survey showed that international investors rated Australia as their favourite investment destination in the Asia-Pacific region. International managers are also keen on Sydney’s office rent costs – 23% less than comparable average rentals in Singapore and 66% less than office space in Hong Kong.

Trade
New South Wales provided more than one-third of Australia’s exports of textile fibres, coal, miscellaneous manufactures and medicinal/pharmaceutical products in 2000/2001. Growth exports include Elaborated Transformed Manufactures, increasing at an annual average growth rate of 11.0% over the past decade. The state is responsible for more than a quarter of all Australian merchandise exports to New Zealand, Indonesia, Thailand and Italy.

The recovery of most major Asian markets has supported the super-competitive Australian dollar and higher commodity prices. Australian merchandise exports grew by 23% in 2000/2001 and were followed by services exports increasing by 16%. New South Wales’ exports followed suit, with merchandise exports increasing by 20% in 2000/2001.

The state has a broad range of trading partners based on geographic links with Asia, heritage links with the United Kingdom and other European nations, and historic and cultural links with the United States. As is the case for Australia as a whole, this has led to a limited dependence on any one market for the export of domestically-produced goods and services.

This diversity contributed to the state’s economy’s strength throughout the economic downturn in Asia in the late 1990s when Europe and North America absorbed significantly larger shares of Australian and New South Wales merchandise exports, balanced by a fall in the share of exports to Asia. In 2000/2001, the European Union and North American markets accounted for 21% of New South Wales merchandise exports, compared to 15% in 1996/97.

Competitive workforce
While Australia’s unemployment rate is low and reflected in the country’s strong economic performance, New South Wales unemployment rate is even lower – the lowest of the Australian states. Seasonally adjusted unemployment rates for Australia and New South Wales (2000/1 average) were 6.4% and 5.6% respectively. By way of comparison, the unemployment rates of France and Germany were 9.7% and 9.6% respectively.

New South Wales’ high literacy levels are the result of its high quality and accessible public education system. International surveys have rated the state’s private education facilities highly for both cost and quality.

New South Wales is home to a large multicultural, computer-literate society and a high number of well-educated multilingual people. The 1996 census revealed about one-quarter of all people living in New South Wales were born overseas. Of all NSW residents, 11.3% were born in Europe, 6.3% in Asian countries and 9.4% elsewhere overseas, including New Zealand, the Middle East and North Africa. It remains the state of choice for settlers in Australia, with the highest number of settlers in the last eight years from the United Kingdom, China, Hong Kong, Vietnam, the Philippines and India.

Low business costs
New South Wales has a well-developed infrastructure to meet the needs of business and communications. New South Wales and Sydney are the major entry points to Australia, with Sydney Airport providing the major air freight and business air passenger facility. New South Wales is also well served with efficient, cost-effective port facilities as well as with other land transport networks. The cost of telecommunications services, real estate, transport and energy are very competitive by global and Asia-Pacific standards. The 2000 Asia-Pacific Telecommunications Index from the National University of Singapore shows Australia to be the most competitive telecoms country in the Asia Pacific.

Despite being one of the world’s most livable cities, executive salary costs in Sydney are considerably lower than Japan, the United States, the United Kingdom, France and Germany. Salaries for a head of finance in Australia, for example, are 48% of those in New York or France, 59% of that in Singapore, and 68% of the salary package paid in London. Salaries in New South Wales compare favourably with those offered in other states of Australia given the strength of its economy and the resulting greater call on skilled labour.

Finance and insurance
Sydney is already the financial capital of Australia, laying claim to the largest share of output from finance and insurance. It is home to 65% of Australia’s finance industry and 70% of its financial service head offices.

A major strength of both these sectors is the well-established and stable world-class prudential supervisory framework. The key areas of growth in finance are in funds management, particularly superannuation, as well as in the providers of the services to these activities. To capitalise on this growth, numerous leading international investment houses and banks have established successful corporate commercial and investment operations in Sydney. This financial ‘Who’s Who’ includes Citibank Limited, Western Union Financial Services, Dow Jones Indexes, Goldman Sachs Australia Limited, ING Direct, HSBC, Royal Bank of Scotland, Rabobank, Alliance Capital Management, the World Bank, BNP, Merril Lynch and ABN Amro – to name a few.

Biotechnology
Home to 40% of the country’s biotechnology and pharmaceutical companies, New South Wales is also home to 30% of Australia’s ‘core biotechnology’ (excluding medical devices and pharmaceutical) companies. Biotechnology generates more than A$2.5bn in sales each year and exports of more than A$900m in medicinal and pharmaceutical products and services. It is also a significant employer with about 7000 people working in the industry.

Under the same umbrella, New South Wales is the investment focus for Australia’s multinational pharmaceutical industry, with 80% of these companies based in Sydney and an estimated turnover of A$2.3bn during the 1999-2000 period.

The IT&T sector
The New South Wales IT&T industry generates more than A$26bn per year. Sydney is Australia’s largest market for high technology products in Australia, and the city is base for almost half of Australia’s information technology and telecommunications (IT&T) industry. New South Wales contributed a massive 76% of the nation’s total exports of computer and information services.

The state’s highly sophisticated infrastructure is supported by two domestic and four international fibre optic cable networks that link Australia to the US, Europe and Asia, Singapore, Hong Kong and Japan. There are good growth prospects in industry sub-sectors such as mobile telephone services, ISDN and cable television delivery and enhanced services in telecommunications.

Much of this growth is booming along Sydney’s ‘dot.com corridor’, a 10km high-tech corridor anchored by Microsoft at one end and Cable & Wireless Optus at the other. The corridor is made up of more than 400 IT&T companies, ranging from the regional headquarters of multinational companies to small start-up companies with new products and services. It contains numerous telecommunications, computer, high technology and research and development companies, as well as related service firms.

The high levels of intellectual property protection offered by New South Wales and Australia are critical to fostering the world’s leading IT&T corporations, and are a major asset for investors wishing to secure their creative capital.

Examples of IT-related investments from the second half of 2001 include: Marconi’s establishment of an Asia-Pacific Shared Services Centre in Sydney; Swiss company Sunbay Software’s new Asia-Pacific regional office for customised software in banking, aircraft, manufacturing and medical industries; major European media player Vivendi Universal establishing a Sydney office; and Indian software firm Satyam opening a Sydney Software Development Centre.

While Sydney dominates the Australian IT&T market, regional areas of the state are developing special areas of IT&T expertise. In the Illawarra region south of Sydney, for example, the IT&T sector is expanding through strategic alliances between the University of Wollongong and international companies such as Nortel Networks.

The NSW advantage
A March 2002 survey by HR consultants William M Mercer placed Sydney as the fourth most desirable city to live in the world, compared with Melbourne in 12th place, Perth in 18th, Brisbane in 25th and Adelaide in 35th. Added to this are financial stability, a first-rate IT infrastructure and variety of industry growth clusters, a strong economy, an enviable lifestyle – all these elements combine to make New South Wales one of the best investment locations in the world.

Websites:
Department of State & Regional Development www.business.nsw.gov.au
Competitiveness report www.competitiveness.nsw.gov.au
New South Wales Government www.nsw.gov.au