Who does not still believe that Australia is the lucky country? Apart from wonderful climate and stable government we have a strong economy. That last factor is all the more favourable considering that much of Asia and most of the western economies appear to be heading into recession. Asia has been particularly hard hit and the USA appears about to go through a year or so of very low growth. And Japan, once the powerhouse of Asia, seems unable or unwilling to sort out the problems in its economy so it won’t contribute much to growth over the next few years either.

Which brings us back to Australia. Remember all those commentators who said that the Australian dollar was undervalued because we are perceived to be part of the "old economy" rather than the exciting "new" economy? And remember those politicians and commentators who said that Australia had to become the "clever country" and invest more in IT manufacturing and all that? We didn’t, did we?

It turns out that most of those high-tech products are now in gross oversupply: computers, mobile phones, DVD players and virtually any other electronic consumer product. And it does not take much thought to realise that this was always going to be the case. It’s a good thing that Australian companies did not take that route otherwise they would be really languishing now. The much-vaunted tech revolution and e-business companies look pretty sick at the moment.

Meanwhile, Australia is doing pretty well thank you and it’s not all due to our low-valued dollar. Although, as I wrote back in the December 2000 issue, the longer that the Australian dollar remains undervalued, the better, because it gives our exporting companies a massive advantage.

Even in the current slow world economy, the people of other countries still need to eat, buy clothes, etc, so they will continue to buy our primary products exports and a lot of our manufactured goods and services as well.

And while Australian companies have not invested at all in the mainstream consumer IT products and telecommunications, many smaller companies are doing very useful research and development in "niche" products. Also very encouraging is the fact that most of the Australian capital cities have encouraged the development of technology parks which act as a hot-house to push R&D. At some stage all this investment will really pay off for Australia.

Yes, we would all like to see some more major Australian technology companies such as CSL, Cochlear, Aristocrat and so on, but lots of smaller technology companies exporting will do just as well thank you. Australia still is the lucky country.

Footnote: all of us at SILICON CHIP express our deepest sympathies to all those affected by the terrorist attacks on the USA, which occurred just as this issue went to press.