GreenTech is Australia’s fastest growing sector for startups: survey

Brandon How

A national survey of Australia’s startup ecosystem found GreenTech to be the fastest growing industry for startups followed by advanced manufacturing, according to Startup Muster which returns after a five-year hiatus.

The survey, led by the University of Technology Sydney’s (UTS) inaugural director of entrepreneurship Murray Hurps, received 1,106 responses across 283 data points.

The survey was available to people running startups or offering support to startups in Australia. Supporters include accelerators, incubators, investors, mentors, educators, service providers, membership-based organisations, professional service providers and government.

Of the respondents, 14 per cent said that GreenTech was an industry that strongly applied to the startup or service, up from just five per cent in the 2018 edition.

This was followed by advanced manufacturing, which saw its share of responses increase from four per cent to 12 per cent, and MedTech/HealthTech/Biotech, which grew from 11 per cent to 16 per cent.

However, software development and artificial intelligence industries remained the largest startup industry, at 24 per cent each. This is an increase of two and three per cent, respectively.

Startup Muster managing director Murray Hurps. Image: Danielle Hurps

Of all government programs, the R&D tax incentive represented the largest proportion of actual grants awarded to startups. When asked for their top policy recommendation for government, 47 per cent of respondents called for more funding, while 25 per cent wanted to improve and simplify employee share options.

The most common primary challenge faced by startup founders was fundraising, which was flagged by 30 per cent of respondents. This was followed by customer acquisition at nine per cent and talent at eight per cent.

Calls for government to buy from startups came from nine per cent of the respondents. The survey also found that 56 per cent of startups are using AI “for key team functions”.

The report also reveals a decline in the proportion of startups receiving support from coworking spaces, down from 50 per cent in 2018 to 39 per cent in 2023. However, there was an increase in the proportion receiving support from accelerators or incubators, up from 25 per cent in 2018 to 32 per cent in 2023.

A New South Wales Innovation and Productivity Council report published at the end of August found that the state government has limited data on the effectiveness of coworking spaces, accelerators, incubators, and startup hubs in developing markets in novel industries or technologies because “there is a dearth of system-level data”.

The Startup Muster survey was supported by Investment NSW, with chief executive Katie Knight stating in a foreword that “support for the sector needs to be grounded in a strong evidence base” and said the report’s insights provided the “hard data we need to recognise our strengths and challenges so NSW can maintain its position as the best place in Australia to start a tech business”.

When asked if there were members of Parliament that were “particularly supportive if the Australian startup ecosystem”, federal Industry and Science minister Ed Husic was named by 16 per cent of respondents. This was followed by former NSW Digital and Customer Service minister Victor Dominello and WA Innovation and Digital Economy minister Stephen Dawson.

Do you know more? Contact James Riley via Email.

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