Sydney slides on ecosystem ranks
Sydney ecosystem: There has never been a more exciting time to be a Sydney startup
You wouldn’t want to bet your house on the veracity of global startup ecosystem rankings. But if you take them with a grain of salt, they are a yardstick nonetheless and Startup Genome’ ecosystem report carries more weight than most.
And according to its 'Global Startup Ecosystem Rankings', Australia’s startup capital of Sydney has fallen to 17th place, the only Australian city in the top 20.
Sydney had been ranked 16th in the 2015 report, which was down from 12th in the previous report in 2012.
Unsurprisingly, Silicon Valley and New York topped the rankings, followed by London, Beijing and Boston. Tel Aviv fell one place to 6th.
There are some positive takes-outs from the report. Sydney ranked 12th in the world for talent (which will make some people go hmmm, although not nearly as much as Singapore’s number one ranking for talent.)
Sydney ranked 10th in the world for funding. This is a reflection of the positive impact of the Turnbull government’s incentives for angel and early stage VC investors contained its National Innovation and Science Agenda.
And the city ranked 13th for global market reach, which will be heartening to those pressing for our local startups to look to world markets from Day One.
But Sydney ranks at the bottom of the top 20 for financial performance of the ecosystems, a measure of both startup valuations and exits.
TechSydney chief executive Dean McEvoy said Sydney’s startup scene is booming, with more venture capital and more entrepreneur energy than any time in its history.
But he says lack of ‘density’ remained an issues, with the ecosystem players too spread out across the city.
“It’s a critical time for our industry,” Mr McEvoy said. “This report proves Sydney has what it takes to be in the Top 10 ecosystems in the world. We just need to accelerate our growth and the size of the industry with a central hub for startups.”
It had been Sydney’s slide from 12th to 16th highlighted in the 2015 that had galvanised the industry in the city.
In part at least, the alarm bells were used to drive the creation of the TechSydney advocacy group as a well-funded and organised political lobby.
Sydney’s ranking slide would almost certainly have been much worse had TechSydney not got involved other sponsors StartupAus, the University of Technology, Sydney, and the Committee for Sydney.
At the very least, these groups made sure the report’s authors (and CrunchBase) had better and more complete data from the Sydney ecosystem. It’s not gaming the system, but things would certainly have been grim had this work not been done.
If anything, the Startup Genome report demonstrates just how fast you have to run just to stand still.
StartupAus chief executive Alex McCauley said Australia had moved quickly over the past 18 months and the Startup Genome reflected those achievements.
“Sydney still ranks as one of the best startup ecosystems in the world, and there are only nine countries ahead of Australia on this list. Yet despite the clear progress we've made, the rankings remain largely static.
“There's a very clear message here: this is a hugely competitive, global race - we need to run fast to even maintain our position. That's why it's so critical that we don't lose focus,” Mr McCauley said.
It should be noted that the Startup Genome report included cities from the innovation powerhouses of Japan, South Korean and China for the first time, so Sydney’s performance was pretty strong relative to the 2015 ranking.
Beijing entered the ranking as the 4th most effective startup ecosystem in the world, and Shanghai was ranked 8th – where neither was ranked anywhere two years ago.
Here’s another thing. Without wanting to suggest Americans don’t know their arse from their elbow when it comes to geography, it is worth noting that the report’s map of global sponsors places LaunchVic on top of Sydney, and puts TechSydney in Melbourne.
There’s your pinch of salt right there.
In the meantime, the Top 20 startup ecosystems according to the ranked are:
- Silicon Valley
- New York
- Tel Aviv
- Los Angeles