Both Sydney and Melbourne are Australian hubs for startups and tech companies. But interestingly enough, they are focal points for different reasons.
Sydney is home to the bulk of startups and investors, while Melbourne is home to extraordinary IT graduates and talent.
“Melbourne produces 2,500 IT graduates per year from its universities and employs 91,300 people into technology companies, making up 31 percent of Australia’s total tech workforce.” (1)
Of the two, Sydney is better situated for international markets, but is still struggling to keep its ranks afloat as a global giant in the digital industry.
Is it possible that lack of integration of talent and investment is what led to Sydney’s ranking in the Global Ecosystem Ranking Report (2) to fall from 12th to 16th last year?
According to this article, integration is the problem: “The long and short of it is that Sydney has a fragmented startup ecosystem and it needs fixing from within.” There are currently efforts being made to bridge gaps and return Sydney to high ranks in the same report that includes Sydney in the list of ‘the startup ecosystems which made the biggest falls’ since 2012. The report cites funding and market research as Sydney’s two most prominent limitations (2, pg. 26).
The GER report comments on the volume of available funding and how it negatively affects Sydney’s startup ecosystem: “The availability of later-stage venture capital is a key bottleneck, a dynamic that can be attributed to the traditionally risk-averse Australian investment culture.”(2, pg. 107)
In the recent years, NSW government has been more actively involved in supporting Sydney’s economic ecosystem. Government officials are working with new tech superpower TechSydney, an industry organisation with the mission to foster the growth of Sydney-wide tech and startup companies by offering them membership (which includes physical workspaces, incubation, a comprehensive talent base, events and educational seminars to attend). TechSydney is a not for profit organisation and membership packages range from $100-$10,000 depending on the size, level of involvement, and growth goals of the members. In August, they reached (and surpassed) their goal of raising half a million dollars through their crowdfunding campaign.
Sydney officials are focusing on holding events to get the public, potential investors, companies, and tech employees excited about raising Sydney rank into top-ten economic ecosystems in the world. It is important to state that raising the city’s ranking is for more than just for the sake of bragging rights, it poses real economic growth potential for NSW as well. Take Melbourne, although Melbourne isn’t even ranked on the twenty-city report, its digital industry brings $34B to Victoria’s economy per year (4). Imagine what Sydney’s potential could be with increased integration of talent, companies, investors, and government support.
Events like Spark Festival (22-31 October, 2016) and StartCon (26-27th November, 2016) are being sponsored by tech giants, including Microsoft and Freelancer, as well as by organisations like Jobs For NSW and City of Sydney.
“We want to make sure Sydney is a place where entrepreneurs can quickly scale innovative businesses and create the jobs of our city’s future. Events like Spark Festival Sydney help build the skilled and connected community we need to make that happen,”(1)
City Of Sydney’s Lord Mayor Clover Moore on the topic of the Spark Festival (formerly known as Startup Week Sydney) as a part of the Tech Startups Action Plan 2016.
Additionally, resources like Meetup groups, Academy Xi, and co-working spaces are providing small companies in Sydney with places to net/work, industry knowledge, and growth insights.
Events, government and public organisations, and private resources are all trying to connect investors and tech companies and the both of them with resources, services, talent to encourage their growth. Massive efforts–and from a variety of sources–in fostering digital industry growth is evidence that Sydney has real potential to reach goals of joining Silicon Valley, Los Angeles, Tel Aviv, and Berlin as part of the GER report’s top ten by its target year 2023. However, there is still more support needed: that which is from Sydneyside industry leaders and the community.
David McEvoy, CEO at TechSydney, states that although “Government is an instrumental part of the equation,” he continues: “they’re not going to be the driver.”
“It’s incumbent upon all of us to spark this fire.” McEvoy says of seasoned entrepreneurs about their role in mentoring startups. (3)
So here’s the call to action: Sydneysiders in the industry must step-up and support fellow local startups. In a supportive community, startups will be able to gain insight that will lead to growth of the overall tech ecosystem and, in-turn, Sydney’s economy.
ToolMates Hire is a startup actively engaged in the share economy. We are first-hand experiencing the limitations and challenges associated with starting-up in Sydney. Often times, we see fellow small companies strapped or unable to find active support for their missions. This is a call to all Sydneysiders to get on board; to join the tech giants, the government, and industry, and community organisations to give local startups the spark they need to get started.
The spark is an infinitely huge resource for small businesses and tech companies because, once given a shot, they unlock valuable market insight and information which is the key to gaining potential to go global. Lack of support subjects good ideas and great people to a trudging journey unfortunately filled with challenges and limitations…which can be the reason a company fails.
(2) Startup Compass, Inc. (Compass.co),. The Global Startup Ecosystem Ranking 2015 *Excluding China, South Korea And Japan. 2015. Web. 21 Oct. 2016. The Startup Ecosystem Report Series.
Image: 123rf Stock Photos