Startups in ‘political wilderness’

Sydney's ranking as a startup ecosystem has dropped, according to a new report

The chief executive of StartupAUS has said Sydney’s slide in a ranking of international startup ecosystems is disappointing but not a surprise.

The Startup Genome Global Startup Ecosystem Report, released today, ranked the NSW capital as the 23rd best startup ecosystem in the world

“In 2015, Australia’s leading ecosystem was 16th in the world,” StartupAUS CEO Alex McCauley said in a statement. “That slipped to 17th in 2017. Now, after some years in the political wilderness, the rest of the world is overtaking us.”

The only other Australian city analysed for the report, Melbourne, did not make the top 30 list. However the city was listed as a “challenger” ecosystem — those cities considered to have the potential to make the top 30 within five years.

“Reports like this remind us that local growth is great, but this is a global race with very real prize money and lots of competitors. We need consistent, long-term support to ensure we’re a genuine contender,” McCauley.

StartupAUS lamented what it said was a decline in the political focus on innovation since the 2015 launch of the federal government’s National Innovation and Science Agenda.

The Genome report said that although Sydney’s rank had dropped, it was still growing as a startup ecosystem. However it also noted that Sydney was one of a group of cities that stood out “for their relatively low levels of Funding Quality, driven by lack of local, experienced VCs compared to other ecosystems,” the report said.

The report says that notable Sydney startup success stories include Canva and Deputy.

The report assessed ecosystems across a range of criteria, including market reach, talent, experience, knowledge, growth, funding, and connectedness.

“Despite the falling rankings, having any city’s ecosystem inside the top 30 is an achievement,” McCauley said. “Only 16 nations in the world can claim that. And Melbourne was specifically listed as a high growth ‘challenger’ to the top 30.”

LaunchVic lauded Melbourne’s listing as a ‘challenger’ ecosystem in the report.

LaunchVic CEO Dr Kate Cornick said that the report last year estimated the Melbourne startup ecosystem had the potential to grow to more than US$4 billion over the next few years.

The ecosystem has grown from US$1.6 billion to US$2.24 billion since then, “showing we’re on track to exceed this target,” said Cornick.

“The substantial growth we’re seeing affirms that startups will play an important part in our future economic mix, representing a major opportunity for Victoria and Australia to make global gains in innovation.”