Melbourne and Brisbane have continued their rise through the ranks of the best global startup ecosystems, but Sydney remains the most favourable location for burgeoning companies in Oceania, according to a new report.
Innovation development organisation Startup Genome’s annual Global Startup Ecosystem Report uses research and analysis of data from 4.5 million startups to paint a picture of the best locations for emerging tech companies.
The 2024 report, released on Monday at London Tech Week, ranks Sydney as number 21 in the world, down one spot from 2023 and 2022.
Katie Knight, deputy secretary of Investment NSW, said Sydney’s vibrancy made it “a first choice for creative talent, technology startups and investment”.
“The wealth of what's on offer is what secured Sydney as the only other home outside of Austin, Texas, to host SXSW,” she said.
Melbourne has continued its gains and moved up one spot to number 32 in the world after climbing three spots in the previous year’s rankings.
The report found the city had more than 3,400 startups.
The latest Victorian state budget provided another $40 million for LaunchVic’s support of local startups.
Professor Kate Cornick, CEO of LaunchVic, said the Victorian startup ecosystem had shown consistent growth since 2016.
“It’s important we continue to drive this growth via programs that support startup creation and through measures that address the early-stage funding gap for startups in Victoria,” she said.
While Brisbane did not make the top 40 of the ecosystems ranking, it placed in the top 40 emerging ecosystems for the first time.
Queensland’s minister for innovation and science, Leanne Linard, said the achievement was “great news” for Brisbane.
“It recognises the efforts of many stakeholders who have worked to position Brisbane as a city where innovative sparks ignite and take hold,” she said.
“Our rise in the rankings is also recognition of our cutting-edge research infrastructure, the city’s tech talent, and a strong entrepreneurial culture.”
Adelaide also made the list of the top 100 emerging ecosystems for the first time.
The report authors wrote, “home to global tech giants and internationally-recognised startups, Adelaide is thriving in multiple sectors, including renewable energy, health, agriculture, defense, and space."
Source: Startup Genome Global Startup Ecosystem Report 2024
Global tech hubs and the rise of AI
The top three startup ecosystems in the world have maintained their same positions since 2020.
The Silicon Valley region of Northern California has remained at number 1, followed by New York City and London tied at number 2.
Tel Aviv in Israel this year rose to tie with Los Angeles at number 4, while Tokyo in Japan entered the top 10 for the first time, moving up from number 15 to 10 — the largest jump among the top 10 ecosystems.
“The top two Chinese ecosystems have dropped in the overall rankings,” the report authors said.
“Beijing by one place and Shanghai by two, now standing at 8 and 11, respectively. However, Shenzhen has shown impressive growth, moving up seven spots to rank 28.”
Source: Startup Genome Global Startup Ecosystem Report 2024
The report’s authors found that while the tech industry’s “dizzying funding heights of 2021 are unlikely to return in the near future”, conditions were now stabilising post-COVID and beginning to show signs of improvement.
The authors said large public companies acquiring generative artificial intelligence startups was a sign of this, as well as improving investor sentiment.
“However, the story of GenAI is also one of increasing concentration, at least over the last two years,” they wrote.
“In 2023, US-based GenAI startups increased their share of all VC deals to 65 per cent, an increase from 57 per cent in 2022.
“How much this concentration continues will be one of the biggest startup questions in coming years.”
