Sydney and Melbourne’s places in the startup ecosystem ranks has dropped, according to a new report. In response StartUpAUS is calling for renewed focus on supporting Australian technology.

The harbour city fell 6 places since the 2017 rankings to 23rd and Melbourne was placed out of the top 30.

The Startup Genome Global Startup Ecosystem Report only named Sydney and Melbourne in its findings. Silicon Valley is still ranked as the number one startup ecosystem, followed by New York with London and Beijing tied for third and fourth places. Boston rounds out the top five.

The report is based on input from over 10,000 founders globally and data on more than one million companies in 150 cities worldwide.

StartUpAus said the results come after a steady decline in political focus on innovation since the 2015 National Innovation and Science Agenda, which saw $1.1billion allocated to startups and innovation.

Alex McCauley, CEO at StartupAUS called the result disappointing but isn’t surprised.

“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.”

“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.”

Silver lining

The Genome report showed there was positive growth in Sydney and Melbourne with investments in startup infrastructure and system-wide improvements.

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

“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.

“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.”

Professor Glenn Wightwick, deputy vice chancellor of innovation and enterprise at the University of Technology Sydney said there needs to be both a consistent, long term approach to supporting startup ecosystems and a strong collaboration between the startup ecosystem, business, research and education in Australia.

He said, “We know the jobs of the future in Australia will be shaped and created through the ideas, the innovation and ingenuity of our graduates. And as the country’s largest tech and startup ecosystem, Sydney needs a pipeline of the best talent, ideas and research from across the entire education system.”

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