A report into the state of play for Western Australia’s startup sector has warned the state risks slipping behind its East Cost rivals unless there’s a great focus on reforms and funding for the sector.
The report, ‘Dare to Venture: Startups and the innovation ecosystem in Western Australia’, by the Bankwest Curtin Economics Centre argues that the state’s reliance mining, energy and resources limits growth in emerging fields such as artificial intelligence, biotechnology and data analytics.
Centre senior research fellow and co-author Dr Daniel Kiely said WA was at risk of falling behind other states, in emerging technologies that could contribute significantly to the state’s economic growth, employment and prosperity, while the startup sector is too heavily focused on solving problems for WA’s existing economic drivers.
“Startups drive innovation, productivity, job creation and social wellbeing and while WA’s startup ecosystem has grown significantly over the last decade, it is still small compared to other regions, with a startup labour force of just 9,650 workers in 2024,” he said.
“WA’s startups are heavily concentrated in industries like mining, oil and gas, and energy, while emerging sectors such as artificial intelligence, FinTech, biotechnology and health are underdeveloped.
“But startups do not emerge in a vacuum. Investing in leadership, talent and skills, as well as in knowledge, through R&D investment, will help bridge the gap with other states and build resilience in the WA economy.”
His call came ahead of an announcement this week by the WA government at West Tech Fest of $45 million in Seed funding for seven VCs who’s pledged to invest $150m in local startups.
The report calls for improvements in talent development, gender diversity and access to capital and infrastructure to develop a more diversified economy. That could result in 350 new businesses, generating 3,500 highly skilled jobs and broader economic benefits, the report found,
Co-author Dr Abebe Hailemariam said the key recommendations include initiatives to increase tertiary and vocational education in high-growth fields, provide additional supports to incubator and accelerator programs, and attract investment into new industries to close the gap with eastern states.
“Key drivers of startup success include access to funding, entrepreneurial experience and talent,” he said.
“Gender disparities do exist, with male founders having a higher exit success rate via acquisition or IPO. But much of this gap can be closed by addressing factors like access to funding and enhancing the founders’ experience.”
The key findings and recommendations of the Dare to Venture report are:
- Leadership and skills development: Policies aimed at fostering leadership, talent and financial support, especially in underperforming regions, are crucial.
- Educational initiatives: Targeted programs to increase tertiary and vocational education in technology and business management will help meet talent demands.
- Incubator and accelerator support: Greater support for programs that develop entrepreneurial skills is essential.
- Attracting new investment: Encouraging investment in new industries will ensure WA diversifies its economy and catches up with other states.
- ‘Brand WA’ promotion: Efforts to build WA’s reputation as a prime location to live, work and invest must continue.
- Boost R&D spending: Australian public and private R&D investment per capita must align with OECD averages to compete globally.
- Grant certainty: Providing ongoing and impactful grants for startups and the ecosystem is essential to signal a strong commitment to economic diversification.
- Continuous monitoring: Tracking ecosystem performance and evaluating programs over time is vital for identifying trends and enhancing support strategies.
WA tech plan
Meanwhile, the Western Australian government has released a 10-year Science and Technology Plan as the strategic vision for the state’s scientific and technological capabilities.
The strategy identifies six strategic areas for growth, jobs and opportunities and aims to build on state’s strengths in areas such as space operations, remote technologies, marine science, health care and renewables.
This Plan supports other WA government strategies and policies, including DiversifyWA and WA’s Innovation Strategy.
The Department of Jobs, Tourism, Science and Innovation (JTSI) led the development of the plan and will deliver it in partnership with a new WA Science and Technology Council.
Expressions of interest to be a representative on the Science and Technology Council are open until Friday, 14 February, 2025.
Trending
Daily startup news and insights, delivered to your inbox.