In 2015, 'innovation' was the word on the tips of everyone's tongues in Canberra. Now, it barely registers as a passing thought.
The turn away from Australia's once world-renowned startup ecosystem is most evident in Startup Genome's Global Startup Ecosystem Report 2019.
The report tanks Sydney as the 23rd best startup ecosystem in the world, down six places from 2017's rankings.
Melbourne, the only other Australian city analysed by Genome, placed outside of the top 30.
StartupAUS CEO Alex McCauley says Australia is fast slipping out of the global rankings, but he is not shocked.
"This result is disappointing, but it's not a surprise," says McCauley.
"In 2015, Australia's leading ecosystem was 16th in the world. That slipped to 17th in 2017. Now, after some years in the political wilderness, the rest of the world is overtaking us. 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 says that focusing on the success of startups is an important part of ensuring Australia is a competitive player in the global economy.
"At the end of the day, this is not a niche issue about hipsters in cafes playing with their laptops. This is about ensuring that Australia is a country where good ideas can flourish into global companies. If we don't have that right, we will not prosper in the 21st century. It's as simple as that," says McCauley.
The Genome report identified positive growth in both Sydney and Melbourne and while this did not arrest a slide down the international rankings, both ecosystems gained ground in absolute terms.
Investments in startup infrastructure and system-wide improvements including a huge influx of capital into venture capital firms were not taken into account in these numbers but are likely to have an impact further down the track.
McCauley is optimistic about Australian innovation improving in the short term.
"We have had some large capital raises by venture funds in Australia that are yet to be deployed into the ecosystem, so there's a lot of dry powder ready to go," says McCauley.
"Across the country, startup precincts like the Sydney Startup Hub or The Precinct in Brisbane have been built and populated over the last couple of years, and they'll be producing results for their local ecosystems and the country for years to come. Alongside strong organic growth, we would expect these positive fundamentals to start to deliver performance boosts in the medium term."
"It's entirely within our power to turn this thing around. There's no reason why Australian ecosystems shouldn't be rapidly climbing these rankings. We just need to be consistent in our approach."
Startup Genome's 2019 Global Startup Ecosystem Ranking:#1 Silicon Valley
#2 New York City
#6-7 Tel Aviv
#6-7 Los Angeles
#19 Washington D.C.
#20 San Diego
#25 Hong Kong
Business News Australia
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